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In a rare move, the state of Minnesota has assumed control of a nursing home as it works through “operations and management issues,” raising concerns that more providers could get the same treatment.

“The combination of the labor crisis, COVID-19 expenses, and our non-responsive payment system has contributed to this current facility takeover, recent closures, and additional closures we predict will happen,” said Patti Cullen, president and CEO of Care Providers of Minnesota. 

Her comments come after the Minnesota’s Department of Public Health announced that the Ramsey County District Court on Friday granted the state a temporary order to assume control of the Pine Haven Care Center, a 70-bed skilled nursing facility in Pine Island, MN. The facility currently has about 50 residents. 

“We had an allegation that came into our complaint section that indicated that there was a concern about the financials of the facility, including the concern about being able to meet payroll for staff,” Maria King, MDH Health regulation division director, told local media. 

King said the state plans to investigate what caused the financial problems in order to determine the next best steps. She added that resident care was not a significant issue. 

The state has taken over a nursing home only seven times in the last 15 years, with the most recent coming last fall, the Star Tribune reported. Prior to that, the most recent receivership was in 2015, MPR News noted.

Cullen told McKnight’s Long-Term Care News on Tuesday that since the start of the pandemic, providers have increased wages — without additional government payments to cover those increases — to find and retain caregivers in nursing facilities and assisted living.  

“More than one-third of providers have increased base wages by 10% or more, out of necessity, even though nursing facilities will not see those increases reflected in their rates for some 15 to 27 months,” Cullen said. “In addition, those increases have not been enough to catch up to the wage hike competition in the marketplace.” 

She added that providers are doing their share to recruit and retain staff but are still limiting admissions because of staffing vacancies. By holding back on admissions, providers are receiving less funding, which is contributing to the fiscal crisis providers are experiencing. 

“The aging services sector in Minnesota is at a critical juncture,” added Kari Thurlow, president and CEO of LeadingAge Minnesota. “For months we warned lawmakers that Minnesota’s senior care system is on the brink of collapse. Yet nothing was done in this legislative session to even attempt to address this crisis.” 

Thurlow said providers’ “number-one priority is to care for residents but when we don’t have enough staff, we cannot admit new residents, jeopardizing the organization’s financial health.” At the same time, the cost of care is skyrocketing, she added. 

“It’s not just labor: utilities, food, and all the expenses associated with keeping residents safe from COVID-19 are going up faster than many providers can respond,” Thurlow told McKnight’s Tuesday. “Closures are a critical issue for the seniors in the community and the aging services system as a whole. Ensuring access to care must be a top priority for Minnesota lawmakers and regulators.”