Sometimes the tears win when Paula Small-Plenty talks about the closing of Big Horn Senior Living. All of its residents are local to Big Horn County, but since the decision to close was made, the administrator has been frantically searching for their new homes, sometimes hundreds of miles away.
He has made calls to nursing homes as far away as Wolf Point, a 267-mile drive from Hardin.
The senior living complex is one of seven skilled nursing facilities in the state slated to close by 2022 due to anemic Medicaid reimbursement rates, staffing, wage pressures and inflation Among the closings was Mountainview in Ronan. The 20-bed facility was 90% full and had a CMS five-star rating. Now the installation is gone.
Others include Valley View Estates in Hamilton, Bridger Rehab and Care Center in Bozeman, Hillside Health and Rehab in Missoula, Cedar Wood Villa in Red Lodge and Hi-Line Retirement in Malta, which transitioned from a nursing home to a facility assisted living facility.
The closures have not come as a surprise. Skilled nursing facility administrators and leaders in the industry have been contacting and meeting non-stop with the Department of Health and Human Services and the Governor’s Office since the emergency funding COVID-19 ended in October 2021.
Through all the panicked talk, the state has remained consistent in its argument that a cultural shift has occurred in America as more choose to age at home.
Low occupancy has affected nursing homes across the country, but at a much slower rate than today. This is also true in Montana.
As nursing home residents bore the early brunt of the COVID deaths and families were barred from visiting, many withdrew their loved ones from congregational settings.
But also playing into the low number of residents is a staff shortage that can only be addressed, at this point, by hiring expensive mobile nurses. Due to inadequate staffing and financial pressure from travelers, facilities have been forced to limit the number of residents, turning away people who need care.
Despite these factors, DPHHS Director Adam Meier and Gov. Greg Gianforte’s office continue to point to declining enrollment, which has been declining for decades, as a result of residency issues rather than insufficient funding.
The slow decline is real and expected given the expansion of home services and increased availability of assisted living. The facilities were able to manage the changing landscape, until the arrival of COVID. Staggering cost increases and labor challenges hit without comparable increases in Medicaid rates, which cover most nursing home residents in Montana.
Meier said the existing nursing home model is unsustainable, especially with low occupancy in rural facilities, adding that it is impractical to keep some rural facilities operating.
From DPHHS’s perspective, there are no funds available to help nursing homes make ends meet during the current financial crisis.
However, the Legislature appropriated enough funding to cover 956,814 days of Medicaid care in fiscal year 2022 and a similar amount in 2023, according to Rose Hughes, executive director of the Montana Health Association. The number of days actually used is usually around 700,000.
“There is clearly unspent nursing home funding. And there will be similar unspent funding for nursing homes in fiscal year 2023, which has just begun,” Hughes said in an email. “The Department’s Budget Status Report for May 2022 projected a funding surplus of about $30 million in the nursing home portion of the budget. It appears the money is being spent on other places, but clearly it could have been spent on helping nursing homes and preventing closures.”
The issue of costs
A Myers & Stauffer analysis of nursing home costs and fees for fiscal year 2021 showed the cost of nursing home care was $277.93 per resident per day. A year later, the average daily rate stood at $212.57, $65 a day less than the cost of care a year ago.
At Big Horn Senior Living, the Medicaid daily fee at the facility was set at $214.13 per resident per day for FY 2023. But a cost-versus-fee analysis for FY 2021 showed that the daily cost for each resident was $467 per resident. day in the facilities. That’s a loss of $240.80 per resident per day.
“We have great longevity with the employees here,” Small-Plenty said, her voice breaking through tears. “We’ve put a lot of effort into making it a nice place to work and a nice place to live. And we are renouncing everything.”
When asked what the state is doing to help the situation, representatives from DPHHS and the Governor’s Office pointed to the provider rate study that will ultimately demonstrate the extent of the shortfall.
“(The provider fee study) has included prioritizing nursing facilities … exploring ways to support nursing homes with long-term care modernization efforts and providing technical assistance to develop sustainable business models,” said Brooke Stroyke, the governor’s press secretary.
In a January interview with DPHHS, Meier said the department was working to develop a more sustainable model. At the time, the administrators of the residences sounded the alarms about the financial crisis, saying many facilities only had enough cash to cover a few more months of operations.
In a July 2022 interview with the Gazette, DPHHS officials had made no progress on a new and improved financial model.
“Some facilities will close,” Meier said, adding that there is room in urban facilities to absorb displaced residents, increasing employment across the board.
Meier also suggested that some residents are eligible for assisted living or home care, neither of which is covered by Medicaid.
The ideology perpetuates the feeling that nursing homes are the last stop in life for the most fragile in society.
Supplier rate study
As for the provider fee study, which has addressed Medicaid waiver programs but not nursing homes at this time, it has shown that Medicaid payments compared to the cost of care would require $87 million to fix, according to Hughes.
Of the total estimated cost, the state would be responsible for $27 million and the rest would be covered by federal funds.
In July, Meier acknowledged that the Medicaid rate needed to be adjusted in the 2023 legislative session, but said funds are not available to support short-term nursing homes.
When asked why short-term nursing homes were not supported after administrators’ desperate pleas for financial aid, the governor’s office pointed to House Bill 632 , which allocates American Rescue Act funds to industries across the state. In the bill, $15 million was earmarked for nursing homes and facilities with rotating beds.
The $15 million appropriation replaced emergency COVID payments in 2021 that increased Medicaid’s daily rate by $40 a day. Hughes understood that the $15 million could not be applied to anything other than similar additional payments.
With the $15 million gone, the bill’s language stated that “it is the intent of the Legislature that no additional supplemental funds be allocated to nursing homes and hospital rotary bed facilities.”
Because of the bill, Meier said, no more funds are available to go to nursing homes.
There is no doubt that more facilities will be closed before any action is taken, Hughes said.
“There’s a complete lack of compassion. No regard for the human impact,” Hughes said of the state’s response to nursing home closings. “There is no universe where the elderly want to leave. They need their attention close to home, close to their families.”
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