Receiver to Close Another Former Skyline Skilled Nursing Facility

The receiver in charge of the Covington Care and Rehabilitation skilled nursing facility — formerly operated by the troubled Skyline Healthcare chain — in Sioux Falls, S.D., will pursue plans to close the property.

“After careful assessment and evaluation, the receiver has made the very difficult decision to propose a plan to close Covington,” Black Hills Receiver said in a statement issued Tuesday. “The receiver will provide the facility with a detailed closure plan in an effort to make this transition as smooth as possible for the residents, their families, and the employees.”

The building will be the seventh in the state to shut down in the last three years, according to the South Dakota Health Care Association, which represents nursing facilities, assisted living facilities, and senior living centers that provide long-term care in the Mount Rushmore State.


The SNF was one of 19 facilities in the state operated by the troubled Skyline Health Care, which fell apart last year amid severe financial problems.

In May 2018, Black Hills Receiver LLC became the latest in a string of companies that took over the Skyline buildings on a temporary basis: SNFs operated by the Wood Ridge, N.J.-based Skyline had been taken over by receivers in Nebraska and Kansas prior to that point. Pennsylvania then assumed control of the Skyline properties there after the South Dakota SNFs were turned over to the receiver.

In addition, the last three Skyline facilities in Massachusetts officially shut their doors last week, after a handful of SNFs in the Bay State were placed in receivership in April. That came after multiple financial struggles, including bounced paychecks for employees, missed payments to vendors, and one SNF being forced to close an entire floor because of short staffing.


The South Dakota Department of Health (DOH) received notification of the intent to shutter the facility on May 31, with a projected closing date of August 1, according to a statement from the agency. The building currently serves 62 residents.

Under federal regulations, nursing facilities have to provide the state DOH, residents, and families with a 60-day notice of closure, and make sure that all patients find alternative placement before closure, the DOH noted.

“Once the Health Department receives formal notice, a closure plan is requested to ensure the safe transfer to the resident’s new home,” the DOH said. “In general, the closure plan identifies the process the facility takes to notify the residents, families, or powers of attorney; an outline of the transportation of residents; and the disposition of all records.”

Because Covington was in receivership, Black Hills Receiver also had to receiver permission from the Sixth Circuit Court in the state, the DOH statement noted.

The South Dakota Health Care Association (SDHCA) used the closure to highlight ongoing issues with SNF reimbursement in the state. At the start of the year, nursing home groups in South Dakota predicted “statewide disaster” without an increase in Medicaid rates, citing a $42 million yearly shortfall for providers from that particular revenue stream.

“The long-term care funding crisis in our state is unfortunately still ongoing,” Mark Deak, the executive director of the SDHCA, said in a statement on the Covington closure. “Though we made significant progress during the last legislative session, this makes clear that still more needs to be done to adequately fund care for elderly and disabled South Dakotans.”

The state recently included a nursing home funding boost in its 2020 budget, the Argus Leader reported. But even with the increases in reimbursement, nursing facilities still lose an average of $42.33 a day for each Medicaid patient, according to the SDHCA.

Given that 53% of the total SNF resident population in the state depends on Medicaid, the disparity adds to staffing challenges, the statement said.

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