Non-Profit Texas SNFs Forced to Close Amid Low Medicaid Rates

Morningside Ministries, a not-for-profit organization in San Antonio, Texas, that provides senior housing and care services, closed its Chandler Estate nursing home rather than risk lowering the quality of care under pressure from the state’s Medicaid system.

The nursing home is slated to lock its doors this month, according to the San Antonio Express-News. And Morningside isn’t the only nonprofit to be faced with this kind of choice, according to George Linial, president and CEO of LeadingAge Texas.

Non-profits in Texas and elsewhere are facing particular pressure in the skilled nursing space. It’s a phenomenon Linial has seen firsthand.


“I do know there have been a number of not-for-profit nursing homes that have been bought out by for-profits, and part of that is that it’s hard for most not-for-profits,” he said. “Many of them are run independently… and they cannot make ends meet.”

Medicaid Falls Short

They aren’t helped by Medicaid reimbursements in the state, which are among the lowest in the country, Linial said.


“The not-for-profits that are providing great care are exiting from the Medicaid program,” he told Skilled Nursing News. “They’re reducing the number of Medicaid clients they serve because they’re unwilling to compromise on the quality of care they provide.”

This issue of care quality is exacerbated by the low Medicaid rates, which do not differentiate between nursing homes of high quality and those that provide subpar care, Linial said.

“As costs have continued to increase, the reimbursement rates have not kept up,” he elaborated. “I think from LeadingAge Texas’ perspective, there’s very little difference between payment for really great nursing homes and ones that are really struggling to provide good care. They’re getting reimbursed about the same.”

This plays into Texas’ struggles in providing long-term services and supports (LTSS). The AARP’s LTSS Scorecard ranked the state 35th overall among the U.S. states, but it ranks particularly poorly in quality of life and quality of care, at No. 46.

Those results are linked to the state’s poor Medicaid reimbursement rate, Linial said. With inadequate reimbursement, nursing homes can’t improve their staffing levels, pay staff better, or make improvements that are related to care quality, he told SNN.

Texas’ Medicaid program does have an initiative that gives rewards for better staffing, but this also lacks sufficient funding to address the problem in the state, Linial noted.

LeadingAge Texas advocated for legislation that would have linked Medicaid funds to hitting quality outcomes in 2017, but neither the Senate nor House bill made it through the state’s legislative process, Linial said.

Problems Old and New

Linial estimates that it’s been about 25 years since Texas reimbursed nursing homes for what their actual costs were. In addition, Texas has now included nursing facilities in managed care for Medicaid for almost three years, which has created a different set of billing problems; some nursing homes have had to hire additional billing people to deal with payment issues instead of direct care staff, Linial said.

It doesn’t add up to a positive result for non-profit operators.

“Virtually everyone who has been in the Medicaid program have either reduced the number of clients that they’ve served or have gotten out of the business completely, have gone completely off of Medicaid because they can’t afford it,” he said. “It’s hard for me to come up with a good number because it’s going on for a number of years.”

Written by Maggie Flynn

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