State News – October 2023

Governor’s visit underscores new legislative attention on nursing home reimbursement systems

MINNESOTA — Gov. Tim Walz (D) (right) took a budget victory lap at a nursing home late this summer, allowing the operator to ask for continued and more robust support for the sector.

Walz (right) helped shape a last-minute budget deal that secured several additional funding lines for the state’s nursing homes, which have closed in significant numbers over the last three years and remain unable to meet hospital demand.

The $300 million nursing home package included $173 million in direct funding to address debt or infrastructure needs. In addition, many providers will likely use a 4% Medicaid rate increase toward wage increases.

Steve Chies, president of North Cities Health Care, embraced a third grant program that can help some facilities with workforce, but he noted caveats could make it hard for operators to dip into funding. For-profit providers, for example, must pay tax on the direct funding doled out this summer.

“I told the governor, ‘You made a good-faith effort. But your payment system is 25 years old. The care and services we provide to patients has completely changed over the last 25 years,” Chies recounted. “You have to have a system that is much more attuned to the market drivers that are out there.”

Major grants award workforce innovation

MICHIGAN — The state in August awarded $67 million to six long-term care organizations to promote workforce innovations.

Among the winners were two unaffiliated nursing homes that netted $3.5 million to help address their specific workforce needs through a unique partnership. 

Holland Home and Edison Christian Health Center, both in Grand Rapids, said they would be working collaboratively on worker retention and recruitment efforts that showcase the quality of their jobs. 

“We need to be ambassadors for our residents in terms of getting quality people in the door to meet their needs and give excellent care,” said Esther Heerema, assistant administrator for Edison Christian. “We really need to boost the idea that this is a worthwhile job.”

Adam Kinder, chief financial officer of Holland Homes, said his is not a mega-provider. The idea of partnering with another, similar provider in their community was an attractive prospect. The facilities have a combined census of just under 300 and about 540 caregiving and support staff.

Some early ideas include an allowance to cover up to three uniforms and shoes for each employee at a cost of $200,000 to $300,000; assistance with childcare; or help with transportation costs. 

Other grants included: 

Nursing home closures mount

SOUTH DAKOTA —The Bennett County Nursing Home was set to close in mid-October, bringing the total to three lost statewide this year, and more than 15 since 2017.

Officials said the facility operated at a loss of over $1.3 million in the first six months of the year. 

The organization, serving the community near the Pine Ridge Reservation, is building a new hospital, and CEO Michael Christensen said closing the nursing home will ensure it can continue operating other services, including home health.

More than 30 residents needed to be relocated, with the closest nursing homes to Martin 50 to 75 miles away. The facility had a staff turnover rate of 94.4% and had relied heavily on travel nurses, spiking costs  1,064% since the pandemic began, according to the Argus Leader.

“Our costs have skyrocketed as we have to pay higher and higher rates for nurses from out of our state to care for our residents,” Christensen wrote.

Law eliminates staffing ‘hostage situations’ for state’s nursing homes

NEW HAMPSHIRE — The “hostage situations” for nursing homes learning at the last minute that a staffing agency has double-booked a worker are nearing an end here. 

A new law in effect starting Oct. 7 prohibits staffing agencies from scheduling nurses or licensed nurse assistants at multiple assignments and then pushing facilities into bidding wars. The law also cracks down on other bad behavior from agencies. 

“Nothing worse than, say, plugging a Friday evening shift with an agency worker and finding out Friday morning, in a sort of hostage situation, that this same worker has been double-booked, and the only way to have her show is to pay a ransom,” said Brendan W. Williams, president of the New Hampshire Health Care Association. 

“Double-booking would be illegal. Using COVID-19 as a pretext to upcharge would be illegal. Recruiting on the premises would be illegal. Placing workers with impaired licenses would be illegal.”

Williams said the overall legislation should be a boon to nursing homes. He was disappointed that a “transparency element” to disclose what agencies charge compared to what they pay their workers was eliminated from the law through lobbying efforts from the American Staffing Association, which argued the information was proprietary.

Sale and merger rules set new precedent

CALIFORNIA — A sweeping set of proposed rules on healthcare transactions aims to address rising medical costs, but legal experts say the measures could chase away investors due to public disclosure requirements.

California’s added oversight affects all kinds of healthcare mergers and acquisitions, with revenue triggers that will easily pull many skilled nursing operators in for new layers of scrutiny.

Draft regulations released by the California Department of Health Care Access and Information July 31 detail new 90-day notification requirements and information that must be sent to a statewide board to determine if a formal cost- and market analysis should be conducted. These new rules could affect private equity investments in or purchases of nursing homes, experts say.

“The notice requirements will add complexity and expense, particularly on deals at the low range of deals covered,” said Andrew J. Demetriou, senior counsel at Husch Blackwell. “Whether that will discourage deals is hard to predict at this point, but it may be a factor, as well as the fact that there will be at least some public disclosure of the transaction.” 

Size or value triggers start at $25 million in annual revenue or amount of ownership assets or $10 million in revenue or ownership assets if the transaction involves another entity that meets the $25 million threshold. The requirements also would kick in if the entity serves at least 50% of patients who reside in an area with a shortage of healthcare professionals.

Discharge delays mount for hospital patients needing post-acute care

HAWAII — One in 10 hospital beds was being occupied by a patient who can’t access needed care at a post-acute care facility, according to a recently updated survey by the Healthcare Association of Hawaii.

The number of waitlisted patients was stable at 219 patients. The average length of delay, however, had increased since last fall, from an average of 78 days to 123 days. The longest stay due to the unavailability of nursing home care was 720 days.

“That means they were ready to be discharged two years ago, but we can’t find a placement,” said Hilton Raethel, president and CEO of the Healthcare Association of Hawaii. “They’re living in a hospital room for two years. That’s not a good environment for anyone.”

From the October 2023 Issue of McKnight's Long-Term Care News