Provider Notice issued 07/22/2026

Advance Payment agreements and Recoupment- Restart Collections September 1, 2026

Background

In May 2019, the Department of Healthcare and Family Services (HFS) established a process for Long-Term Care (LTC) nursing facility providers to request an “Advance Payment” if they were experiencing a financial hardship due to Medicaid eligibility determination issues which included a process for repayment that directed the LTC nursing facility provider to begin submitting payments in January 2020. After this, HFS issued several extensions via Provider Notice or other communications with LTC nursing facility providers as follows: 

• January 2020 Provider Notice: Extended the date for repayments to April 2020. 
• April 2020 Provider Notice:  Extended the date for repayments to July 2020.  
• August 2023 Provider Notice: Extended the date for repayments to October 2023.
• January 2024 Direct Provider Communication: Extended the date for repayments to January 2024.   

At this time, LTC nursing facility providers that have not fully repaid outstanding advance payments from the above 2019 advance payment process, as well as any other LTC nursing facility provider that holds an advance payment agreement with HFS, are subject to the below referenced statute and processes.  

Statutory Authority

Public Act 104-0470 requires LTC nursing facility providers enter into a renegotiated advance payment agreement with HFS and gives HFS the authority to recoup for payments under the renegotiated advance payment agreements should a provider violate the agreement. Specifically, the Public Act requires the renegotiated advance payment agreements to include terms for repayment of the total amount owed for all outstanding amounts over a 12-month period, repaid in equal increments, with payments beginning within thirty (30) days of the signed agreement date. Neither the total amount owed nor the monthly increments to be paid under the renegotiated advance payment agreement may be negotiated. 

In addition, beginning September 1, 2026, HFS must immediately recoup unpaid advances if a renegotiated advance payment agreement is not in place.  

Process for Renegotiated Advance Payment Agreements and Repayments  

Under renegotiated payment agreements, providers with outstanding balances due will be required to restart repayments on September 1, 2026. 

As required under Public Act 104-0470, renegotiated advance payment agreements must be entered into no later than 60 days after the effective date of Public Act 104-0470. The effective date of the Public Act was June 16, 2026. Therefore, renegotiated advance payment agreements must be in place by August 15, 2026. 

Public Act 104-0470 also requires the renegotiated advance payment agreements to include terms for repayment of the total amount owed for all outstanding amounts over a 12-month period, repaid in equal increments, with payments beginning within thirty (30) days of the signed agreement date.

The new template for the renegotiated advance payment agreement will be emailed to the contact on file with the HFS Bureau of Long Term Care. Providers should then sign, date, and return the agreement to HFS.LTCAdvances@Illinois.gov for HFS signature before Friday, August 7, 2026, close of business. Signed copies of the agreement will then be returned to the sender via email from HFS.LTCAdvances@Illinois.gov. 

Recoupment Process 

If an LTC nursing facility provider misses a required repayment, HFS will issue a notice to the LTC nursing facility provider that they are in violation of their advance payment agreement. The notice will inform the provider of the breach of contract and of HFS’ intention to exercise its recoupment authority under Public Act 104-0470 should the provider not show proof of repayment of the outstanding amount of the missed payment within thirty (30) days of the breach of contract. 

If the provider does not come into compliance within that 30-day period, HFS will issue another notice to the provider informing them that recoupment will begin immediately. HFS will recoup twenty-five percent (25%) of the total outstanding advance payment owed. HFS will recoup the 25% for four (4) months until the full outstanding advance payment is repaid. 

Public Act 104-0470 also allows for the immediate recoupment of all outstanding amounts as of September 1, 2026, if any LTC nursing facility provider does not enter into a renegotiated agreement.

Should any LTC nursing facility provider either fail to have a renegotiated advance payment agreement in place or fail to make repayments as required under their renegotiated advance payment agreement, HFS will recoup from the following sources, at its discretion: 

1. HFS will withhold any payments owed to a provider for fee-for-service (FFS) claims payments, supplemental payments, and any other payments HFS is required to pay a provider under the medical assistance program.  
2. HFS will direct the Managed Care Organizations (MCOs) to remit claims payments intended for a provider to HFS.
3. HFS will withhold amounts otherwise payable by another State agency to a provider (i.e., State grants, grant appropriations).  
4. HFS will pursue other collection methods available by law. 

Questions regarding this notice may be directed to the Bureau of Long-Term Care at HFS.LTC@illinois.gov. 

Laura Phelan, Administrator  
Division of Medical Programs