Maple Lawn, the nursing care facility owned by Branch County, is facing a financial crisis caused by the COVID-19 pandemic.
Without a short-term cash infusion of nearly $1 million, nursing home administrator Jane Sabaitis warned, “We won’t be able to pay payroll.”
He also asked the county commission for long-term relief in the form of a 0.99 property tax over 10 years. That would have to go on the November general election ballot which requires a commission decision by Aug. 16.
Commissioner Tom Matthew said half a mill between 2016 and 2035 was already approved for the latest expansion and improvements. He is not willing to ask more from the citizens.
“We have to work with what we have,” he said.
This millage tax revenue cannot be used for anything other than bond payments.
If a new millage passed, the money would not arrive until the summer of next year. Matthew noted that the millage would bring in nearly $1.6 million annually for 10 years to solve an immediate problem of $874,976.
“This is a perfect storm in a bad way,” commissioner Randall Hazelbaker said. “I would be ready to go with the millage.”
The county’s financial problems make a short-term loan very difficult. County Administrator Bud Norman said there is a legal question about whether the county can make a cash loan.
Commissioners left the item on the agenda for next Tuesday’s regular meeting without recommendations.
“We need a lot more information,” Commissioner Jon Houtz said.
Sabaitis said the problem arose when the state estimated Medicaid payments for patients based on history.
“Then the state does a reconciliation based on what the facility bills for Medicaid, what has been paid and the Medicaid payments,” he said. “These reconciliations are usually done once a year. But due to the pandemic, the state has not done a reconciliation since April 2019, which was for the 2018 Medicaid bills.”
A June reconciliation for 2019, 2020 and 2021 said Maple Lawn owed the state $874,976.96. I wanted to deduct the amount immediately from the state payments.
The state agreed to withhold repayment in three payments of $291,659 in July, August and September.
“Financially, we have received just over $800,000 in Cares Act funding. That money has been used for facility operations.” Sabaitis said.
There are now federal funds that are not initially available for county-owned nursing facilities.
“We have also applied for the federal government employee retention credit for the first three quarters of 2021,” Sabaitis said.
Plant Moran is in the process of completing that application, with a conservative return amount of approximately $3.2 million, Sabaitis said.
“If this funding comes through, it will benefit us greatly.”
She thinks federal approval will come, but she’s not sure. ERC funds would repay the county’s short-term loan.
Sabaitis usually said the care center was 95 percent full, but during the pandemic it was reduced to about 75 percent capacity. Revenue in 2021 was down 5% from 2020. This year, Maple Lawn’s revenue is down 20%.
Prior to this reconciliation, Maple Lawn was running on a cash balance between $1 million and $1.5 million for several months,” Sabaitis said.
“This reconciliation significantly affects our cash balance,” he said.
Before the pandemic, Maple Lawn consistently operated above a 95 percent occupancy rate of 114 customers, Sabaitis said. The operating balance is 100 patients.
“Now there are 85,” Sabaitis said. “We have hip and knee replacement surgeries for a portion of our rehab census. Those numbers have been slow to recover. Many choose to go home for rehab with home health or go to an outpatient facility.” .
There is a waiting list for admission.
“We’ve had to limit or not receive new revenue at a few different times because we’re not adequately staffed to handle more patients,” he said.
Some of the staff left, instead of getting vaccinated against COVID-19. Other nursing staff paid $50 an hour or more jobs while everyone else was fighting for health care workers.
The May financials showed an operating loss of more than $1 million and an April loss of $860,000. Sabaitis predicted that if the state took all three repayments, the cash balances would all but disappear by the end of next month.
The director said the building needs $350,000 in repairs to the original air handling units in the 33-year-old building.
During COVID-19, the short supply required $500,000 in additional PPE equipment.
Daily operating costs are down to $41,000 a day, down from $43,000 a day in 2021, Sabaitis said.
“Supply costs have gone up because of inflation,” he said.
Commissioners will address the issues on Aug. 9 at their regular meeting.