Coronavirus Costs Illinois Behavioral Health Providers $7 Million

(Springfield, IL) – The coronavirus pandemic is expected to drain more than $7 million from the coffers of Illinois’s leading community-based mental health, substance use disorder and intellectual and developmental disability providers by the end of March – a nearly 50% loss of monthly revenue, potentially leaving as many as 175,000 patients in a lurch if state government finds itself unable to provide a financial lifeline.

A new survey of the state’s leading 147 community-based organizations found that their estimated Medicaid billing to the state will plummet by $6,315,146 by the end of March and that their non-Medicaid billing will swoon by $800,983.

“These type of financial losses are unsustainable even in the short-term,” said Illinois Association for Behavioral Health CEO Sara Howe . “Approximately one-third of organizations have 30-days or less of cash-on-hand and another one-third have no line of credit to access emergency cash. This is dire.”

On March 16, Illinois Department of Human Services Secretary Grace Hou, whose department oversees behavioral health providers, issued a “budget principles” memo to providers saying they would be “kept whole” and that their staff “should continue to be paid.”

“Community-based human service providers will be held harmless and kept whole as operations are diminished or temporarily suspended during this national and state emergency,” Hou wrote in her memo. “Critically: staff who work for your organizations should continue to be paid.”

The problem is that Hou’s agency funds only a fraction of most providers’ budgets – 15% to 20% – with non-Medicaid, state dollars while the lion’s share – 80% to 85% comes from the Illinois Department of Healthcare and Family Services (HFS) through federally-funded Medicaid payments, and HFS has made no similar “kept whole” pledge to providers.

“We deeply appreciate Secretary Hou’s commitment to community-based providers and her pledge that we would be ‘kept whole" to try and preserve the service array during this public health crisis’,’’ said Ben Stortz, CEO of Cornerstone Services. “We need the Department of Healthcare and Family Services to make that same commitment. And it needs to be done today."

Despite Hou’s plea to providers to keep staff on the payroll, the survey, conducted between March 24-25, reveals that organizations have already laid-off 58 individuals.

“Without a concrete financing plan within the next week, the 58 workers already laid off will mushroom to 580 within the next couple weeks and individuals seeking mental health care will find shuttered doors,” said Community Behavioral Healthcare Association of Illinois CEO, Marvin Lindsey. “The Illinois human service sector, which was shredded during the 2015-2018 budget impasse, and the behavioral health sector, more specifically, are staring into the abyss of at least a partial collapse without a substantial, near immediate, state financial lifeline.”

The organizations that oversaw the survey are: Illinois Association of Rehabilitation Facilities, Institute on Public Policy for People with Disabilities, Community Behavioral Healthcare Association, The Arc of Illinois, and Illinois Association for Behavioral Health.

davidormsby@davidormsby.com