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Medicaid payment rates blamed as rural nursing home closures pick up pace in Nebraska

Medicaid payment rates blamed as rural nursing home closures pick up pace in Nebraska

LINCOLN — The September announcement of the Blue Hill Care Center’s planned closing hit Brenda Trumble hard.

The home’s closure would have forced her 90-year-old mother, Lois Mohlman, to leave the south-central Nebraska town where she had lived for more than 30 years.

Trumble would no longer be able to pop in and see her after work or supper. Relatives would have had a longer drive to visit. The workers caring for Mohlman would no longer be neighbors and friends.

But the family would have had little choice. With growing dementia and a history of wandering and falls, Mohlman needed nursing home care, and the next closest home was more than 20 miles away.

Trumble and her mother were spared the upheaval after the town of Blue Hill successfully fought to keep the home open.

But 14 other nursing homes — all but one in rural counties — have closed in Nebraska this year. That’s more than twice the number in 2018, which itself set a record.

A total of 34 Nebraska nursing homes have closed during the past eight years. All but two were in rural counties.

The trend worries nursing home associations and advocacy groups alike, especially as they look ahead to the baby boom generation reaching advanced age. And some state senators say Nebraska needs to be looking at ways to keep rural homes open.

“Where in the rural areas of the state are people going to have to go to get care?” asked Heath Boddy, president and CEO of the Nebraska Health Care Association, which represents the majority of Nebraska nursing homes. “The care is findable. What I’m worried about is finding it in a reasonable distance.”

Jina Ragland, associate state director for AARP Nebraska, said the advocacy group has heard from families with problems finding nursing home care in their area. She said some people have ended up hundreds of miles from home, where maintaining connections with spouses, as well as other family and friends, is difficult.

“It’s not just a short drive down the road,” she said.

Rural nursing homes are struggling across the nation. More than 440 rural homes have closed or merged over the past decade, according to a New York Times report that cited the Cowles Research Group. The vast majority collapsed for financial reasons.

That’s true in Nebraska as well, Boddy said.

He and Jenifer Acierno, president and CEO of LeadingAge Nebraska, which represents nonprofit homes, place most of the blame on Medicaid payment rates that fall well short of covering costs.

Nebraska Medicaid rates averaged $36 less per day than nursing home expenses in 2017, according to the American Health Care Association.

The shortfall narrowed to about $30 per day this year, after state lawmakers boosted funding by nearly $14 million. About $6.4 million is state dollars, with the rest coming from the federal government.

Although state Medicaid officials have kept back some of the funds for contingencies, Boddy called the increase “a wonderful step forward.”

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Yet it has not been enough to stem the tide of closures.

“We’ve just reached a point now where those operators can’t sustain it anymore,” Acierno said.

State Department of Health and Human Services officials did not respond to questions posed early last week about the level of nursing home rates or about whether the agency has concerns about rural nursing home closures.

Typically, nursing homes have made up for low Medicaid rates by charging more to private pay residents. But the strategy does not work as well when the Medicaid shortfall grows and when there are not enough private pay residents.

While urban homes may limit the number of Medicaid residents to keep their books balanced, rural homes are less able or willing to do so. As a result, Nebraska’s rural nursing homes have about 65% of residents on Medicaid, compared with 53% statewide.

Boddy said that Medicare payments also used to help homes manage. But Medicare, which never paid for more than a limited amount of nursing home care, has tightened up its payments recently.

In addition, rural homes struggle with a tight labor market and low occupancy rates, which are driven by a push for less costly alternatives such as in-home care and assisted living.

But Trumble, while searching for a place her mother could go, found that the recent nursing home closures are sending occupancy rates back up.

She also found that empty beds do not necessarily equal access to care. Some homes refused to take her mother because of her wandering. Other beds did not fit her mother’s needs. They were for men or for people with higher or lower needs for care.

Marty Fattig, chairman of the state’s Rural Health Advisory Commission and CEO of the Nemaha County Hospital, said hospitals are starting to run into difficulties finding places for patients to go.

Along with affecting residents and their families, nursing home closures are a major blow to small towns. In Blue Hill, the nursing home has been among the top employers in town, said Mayor Keri Schunk. The home has about 43 employees.

“It was going to be devastating to our community,” she said.

So Schunk, Trumble and other Blue Hill residents mobilized as soon as word of the pending closure got around. They held public meetings and created a committee to explore options, such as finding a buyer for the home or a company to manage it.

In the end, Azria Health, the company that owned Blue Hill, reversed course on its plans to close the home. The company went ahead with closing homes in Milford, Columbus and Utica.

State Sen. John Stinner of Gering, the Appropriations Committee chairman, said the situation is becoming critical for rural Nebraska.

He said the state needs to explore ways to keep nursing homes open so Nebraskans can get care close to home. One model might be the federal program that designates certain hospitals as “critical access hospitals.”

Better Medicaid rates also would help, he said. To close the gap between Medicaid rates and nursing home expenses could cost about $66 million, including about $30 million in state funds.

“This is a crisis that needs some kind of resolution,” he said. “We’re still a long way from breaking even.”

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Martha Stoddard keeps legislators honest from The World-Herald's Lincoln bureau, where she covers news from the State Capitol. Follow her on Twitter @StoddardOWH. Phone: 402-670-2402

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An estimated that 37% of rural Nebraskans lack access to high-speed broadband Internet service. And the Legislature's Transportation and Telecommunications Committee was told recently that unless broadband services are expanded into more rural areas, students, entrepreneurs and farmers who rely on high-speed service to learn or operate businesses and high-tech machines will be left behind.

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