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On April 12, 2011, the Joint Committee on Administrative Rules (JCAR), a committee of the General Assembly, held its monthly meeting at which time the Department of Healthcare and Family Services presented its proposed rules to implement the Deficit Reduction Act (DRA)and its revisions to Medicaid and asset transfer rules.  Currently, if a senior changes ownership of an asset to protect it from the costs of nursing home care, they face a three year look back and penalty period.  The proposed rules would make this a five year penalty period..  The proposed rules, on its Second Notice of Proposed Rulemaking had to be adopted by JCAR before they could be implemented.

At the April 12, 2011 hearing, Department Director Julie Hamos and Department Assistant General Counsel Dan Leikvold testified.  According to the minutes of the meeting, State Senator Ira Silverstein requested that the provision requiring retroactive application of the rules be removed.  That provision would have mandated that any senior who has made any changes to the way their assets are held in an attempt to shield them from nursing home costs since February 2006 would have these rules retroactively applied to them.  The Department had stepped back from this position after many senior advocacy groups and the Illinois State Bar Association protested.  Director Hamos defended a proposed compromise on the retroactivity provision wherein the current 3 year look back period would be gradually raised to 5 years beginning on November 1, 2011.

Director Hamos threatened that Illinois stands to lose its federal Medicaid funding if the rules were not implemented immediately and retroactively.  She also stated that not implementing the 5 year look back now means Illinois is not in compliance until 2016, which is ten years after federal law was enacted mandating the change from three to five years.  Despite the fact that the DRA was passed by Congress in February 2006, Hamos cautioned the JCAR members against causing Illinois to be untimely in its implementation of federal law.

At the May 10, 2011 JCAR hearing, the committee moved to a final vote and unanimously rejected the Department’s proposed rules, as modified on the Second Notice citing the concern that nursing home residents could “be penalized with loss of eligibility for Medicaid long term care assistance for action that, when they were taken, did not violate the rules”.  The Department, according to an article published in the Aledo Times Record (through GateHouse News Service), threatens that Illinois could lose its federal Medicaid funds as a result of this vote.  According to the article, the Department is currently seeking confirmation from the Center for Medicare and Medicaid Services as to whether this failure to implement the rules will result in a cutoff of federal matching funds as the Department is calling on JCAR to reverse its decision and alternatively appears to be testing support for a full vote of the General Assembly to implement the rules over JCAR’s objection.  Diana Law, an Illinois elder law attorney from Aurora who is actively involved in opposing the proposed legislation, is against the Department’s rules because they go far beyond what is required to simply implement the Deficit Reduction Act.  “The Department has gone far beyond the DRA to create rules that are punitive, draconian and designed to harm Seniors. The Department would be correct to simply implement the DRA not ‘DRA Plus’.” said Law.