Nursing home operators and advocates across the country are desperately asking for legislative and regulatory relief, but any help that may come will be too late for six long-term care facilities that have been placed into receivership and the 263 residents who must find new homes.

Last week, the owner of Blue Care Homes LLC gave notice to the Iowa Department of Inspections and Appeals (DIA) that it will not be able to care for residents at four nursing homes and two assisted living facilities. 

Over the last 12 months, 17 skilled nursing facilities in Iowa have closed with the primary culprit being “an extraordinary explosion” of wages and operating costs, according to the Iowa Health Care Association. Those two factors have combined to create a nearly 20% shortfall in Medicaid reimbursements.

“This is an unsustainable trajectory,” Brent Willett, association president and CEO, said in a statement to McKnights Long Term Care News.

Willett called on the state’s legislature to make the kind of long-term investments necessary to protect rural access to long-term care. The state Department of Health and Human Services along with DIA will stabilize the Blue Care facilities to make sure staffing and operations remain sound over the 60 days, during which residents will be transferred out. 

“The question will be how far away from home that will be,” Willett said. 

Twice the trouble

The long-term care sector has been particularly hard hit by the pandemic. An April study by the American Health Care Association found that more than 300 nursing homes closed during the pandemic and predicted a wave of several hundred more risked shuttering. The report noted that closures were more often small with fewer than 100 beds. Facilities are also staring down a nightmare of staffing shortages and high operational costs with 20 percent of providers responding to another study in Minnesota in September saying they were considering closing or selling their properties. 

Unlike more densely populated areas, though, facilities in rural areas can be spread very far apart and in the current environment, these homes may not guarantee long-term placement. An NBC News article on this latest receivership mentions that some residents who were forced out of a Postville, IA, nursing home had to move twice after the first nursing home they went to closed.  

Michael F. Flanagan was appointed receiver. He previously administered the receivership of eight Iowa nursing homes with at least 450 beds combined, as McKnights reported in August. Flanagan will oversee the transfer of the residents of the Blue Care Homes’ residents to new facilities of their choice. 

The Iowa Capital Dispatch reported in September 2021 that Blue Care Homes, also known as Blue Diamond Equities, agreed to purchase QHC Facilities, which owned eight nursing homes and 2 assisted living facilities that racked up a combined 184 regulatory violations in 21 months. QHC also owed $6 million to the state and federal governments, the publication said. QHC’s fiscal troubles, , emboldening Blue Diamond/Blue Care to slash its original offering price for the properties after an initial bid winner backed out of a QHC deal.

In October, McKnights Long Term Care News reported that Blue Care bought at least five of QHC’s facilities that were in bankruptcy. The Centers for Medicare and Medicaid Services tried to halt the sale, the report said.

The four nursing homes that are emptying out due to the receivership process are:

  • Webster Post Acute Rehabilitation/Fort Dodge Villa Care Center, Fort Dodge, with 61 current residents;
  • Humboldt Wellness and Rehabilitation/Humboldt Care Center, Humboldt, with 45 residents;
  • Timber City Wellness and Rehabilitation/Crestridge Care Center, Maquoketa, with 58 residents;
  • Madison Wellness and Rehabilitation/Winterset Care Center North, Winterset, with 52 residents.

The two assisted living facilities are:

  • Villa Cottages, Fort Dodge, with 14 current residents;
  • Madison Square ALP/D, Winterset, with 33 residents.