The Illinois Finance Authority (IFA) yesterday advanced more than $800 million of new-money and refunding debt planned by various organizations, including the Art Institute of Chicago, the Alexian Brothers Health System, and Palos Community Hospital.
It also moved to establish a $48 million borrowing program to aid continuing-care facilities struggling with the state’s late bill payments.
The IFA board gave preliminary approval to the $48 million Affordable Assisted Living Coalition note project as a low-cost way to help assisted-living providers cope with chronically late payments from the state government, which has a backlog of $5 billion of bills as it grapples with a $13 billion deficit.
The state is several months late in paying its Medicaid accounts for all of the 119 supportive-living facilities, or SLFs, that fund affordable care services for frail and disabled Illinois residents who receive Medicaid assistance, according to IFA documents.
The program — developed by William Blair & Co. and the Affordable Assisted Living Coalition — will fund up to 365 days of accounts receivable and provide reimbursement for each month of SLF Medicaid invoices. Under the program, the IFA would issue $48 million of taxable notes dated April 1 that will mature Nov. 1, 2010, and June 1, 2011, to finance the purchase of the Medicaid accounts receivables. The two maturities allow the SLFs to participate for either six or 12 months.
The proceeds will fund on a monthly basis the receivable invoices submitted by each SLF and certified by the state Department of Healthcare and Human Services, allowing each participating facility to receive immediately its month’s funding for their Medicaid receivables over the next six months to one year. Each participating SLF’s Medicaid receivables will be pledged to the Financial Authority to secure the notes.
“Importantly, while often delayed, the state has never failed to make these payments,” according to IFA documents.
Gov. Pat Quinn is unveiling a fiscal 2011 budget today that is expected to propose borrowing to pay down bills.
William Blair would serve as underwriter and Greenberg Traurig LLP is bond counsel on the note issues.