Empty nursing home bed

Sagging reimbursement, workforce shortages and the ongoing effects of COVID-19 are among the big reasons post-acute care provider Avantara announced the pending closure of its Armour, SD, nursing home Wednesday.

Nursing facilities in Salem, Lennox, Clear Lake, Ipswich, Custer, Hudson, Sioux Falls, Huron, Madison, Mobridge, Tripp, Bryant, Rosholt also have closed in South Dakota over the past five years.

Published reports indicated those closures represented more than the 10% of the state’s nursing homes, a closure benchmark nursing home leaders in Montana said was passed in that state earlier this month.

Mark Deak, executive director of the South Dakota Health Care Association, told McKnight’s Long-Term Care News Thursday that the slowing flow of Medicaid dollars in recent years has hit the industry particularly hard in South Dakota, especially when compared to those of neighboring states.

Twelve South Dakota nursing homes have closed in the past five years, Deak told McKnight’s Thursday. He added that South Dakota’s Medicaid reimbursement rates are below those of all of the state’s neighbors. Its per diem Medicaid rate is currently $184, compared to neighbors such as Nebraska at $272 and Iowa at $214.

In 2021, the estimated statewide costs of unreimbursed care totaled more than $56 million. A significant majority (55%) of the total resident population in South Dakota nursing homes relies on Medicaid to pay for their care, according to published reports. In addition to the closures, relatively low reimbursement makes it harder for facilities remaining open to afford hiring and retention efforts in today’s market.

Another big strain on South Dakota’s skilled nursing providers occurred recently when CMS decided to change course on pay rates.

“Any further cuts bring us to a question of whether skilled nursing care will truly be sustainable in many communities,” added Deb Paauw, executive director of quality and data integration at South Dakota-based health system Avera Health. “South Dakota has had four nursing homes announce this year that they are closing, and it’s highly likely there will be more doing the same.”

A final, official closing date for the Avantara facility has not yet been announced. 

“Each resident at Avantara Armour will receive an individual plan that ensures their health and well-being and will have the highest priority during this period of relocation,” Deak said.