Persistent and growing Medicaid funding gaps have pushed Maine long-term care leaders to request urgent relief from the state government. The LTC reimbursement shortfall has expanded to $96 million dollars, igniting fears of more nursing home closures in the near future.
Sector leaders representing the Maine Health Care Association and Maine Council on Aging, among others, met at the state capitol Thursday to call for more bridge funding.
Medicaid reimbursement rates’ failure to keep pace with the cost of providing long-term care has been a common complaint for skilled nursing facilities across the country. These funding issues are compounded in largely rural states like Maine.
“The pandemic hit our industry hard,” said Angela Westhoff, president and CEO of MCHA. “Nursing homes and residential care facilities were on the front lines against the COVID pandemic. It was a physically and emotionally challenging time for our caregivers that ultimately caused many staff to leave their jobs.”
Struggling with staff retention, rising costs and funding gaps, numerous Maine nursing homes have closed in recent years.
“Long term care facilities in Maine are closing or converting to a lower level of care at an alarming rate,” Westhoff told McKnight’s Long-Term Care News. “In fact, approximately 50 long term care facilities have done so since 2012, including 23 nursing homes.”
Once-promising new developments have also been shut down. The cumulative result has been more than a 35% decrease in skilled nursing beds, down from a peak of around 10,000 in 1996, even as the population continues to age.
States struggle to keep pace
A national staffing crisis is only made worse by the difficulty some rural facilities have in maintaining competitive staff wages. These facilities are forced to compete with both the wider healthcare sector and other local industries. The resulting staffing and retention difficulties have forced many homes to rely on agency contractor labor as an expensive stopgap.
“Although we are no longer in a declared public health emergency, nursing homes and other centers still struggle to stay open,” Westhoff told Mcknight’s. “Maine’s historic workforce shortage, intersecting with the state’s lagging Medicaid reimbursement rates, is leading facilities to close their doors
A bright spot for Maine’s government and nursing facilities is that they are not on the hook for the entire $96 million shortfall, thanks to federal funding that will cover $65 million. The remaining gap is still a major cause for concern in the sector, however. Its growth has also alarmingly accelerated—more than doubling since 2022.
“Beyond facility closures and losses of beds,” read a 2023 report on finances and nursing home closures from MHCA, “facilities are under significant financial duress. Most facilities have empty beds due to the unprecedented workforce shortage — the lowest it has been in 15 years.”
MHCA has been requesting bridge funding from Maine’s government since at least that early-2023 report — a now-common refrain from skilled nursing providers. State governments — even those receptive to providers’ needs — often struggle to be nimble enough to implement reimbursement reforms that adequately address the rapidly shifting landscape of care costs.
“The state can fix this by increasing its Medicaid reimbursement rates to cover the cost of providing care,” Westhoff said. “The gap between cost and state payment is only increasing. Nursing homes will continue to close until this is resolved.”
