Nursing home operator Signature HealthCARE on Wednesday announced 100 layoffs at its corporate headquarters in Louisville, Ky., with leaders blaming the action on a lack of temporary payment support during the COVID-19 crisis.
“We are at a point where difficult decisions have to be made on how to survive,” CEO Joseph Steier said in a statement provided to SNN. “We know that COVID-19 will not be over in our business any time soon, and even as it may be overcome in the future, our sector and how we do business will never be the same again.”
The Courier-Journal of Louisville initially reported the news Wednesday afternoon.
Signature — which operates facilities across 10 states and is the largest nursing home provider in Kentucky with 41 facilities — pointed to a lack of increased Medicaid rates in the Bluegrass State as a key driver of the layoffs.
“The entire health care continuum has been disrupted by COVID-19 in ways never experienced before, and the associated costs have been astronomical, from PPE and additional facility cleaning and sanitizing supplies, to well-deserved additional pay for our frontline hero caregivers,” Steier said.
The federal government in March temporarily boosted the Federal Medicaid Assistance Percentage, or Washington’s share of state-level Medicaid rates, by 6.2% to help provide short-term relief for health care providers during the COVID-19 pandemic.
Individual states, however, were not required to pass that increase along to long-term care providers, with the ultimate funding decisions up to governors.
“Perhaps the most frustrating aspect of this situation is how our own state was unwilling to share a portion of the FMAP financing offered by the federal government to assist with our state’s Medicaid patient needs associated with COVID-19,” chief operating officer Chris Cox said in the statement. “And although our state finally embraced the idea of facility-wide testing for all residents and staff to the point of mandating it statewide, they failed to address the resource needs to accomplish this mandate.”
Speaking at a press conference, Kentucky Gov. Andy Beshear and health official Eric Friedlander pushed back on Signature’s assertions, according to the Courier-Journal.
“It is unfortunate that Signature feels that they need to lay off 100 folks in Louisville,” Friedlander said, per the publication. “I still believe that Kentucky has provided an aggressive response for our nursing facilities.”
Kentucky did provide a special $270-per-day reimbursement for COVID-19 patients, according to the Courier Journal, up from the typical Medicaid rate of $195.
Operators in states that directed FMAP funds to nursing homes used the money to shore up their financial footing at a time when the cost of personal protective equipment (PPE) and temporary staffing skyrocketed.
“It helped providers pay hazard pay or increase overtime for staff,” Robin Dale, president and CEO of the Washington (state) Health Care Association, told SNN last month. “And any other additional increases, like agency [staffing], which doubled, tripled, and quadrupled magically in March. Everybody needed help, almost right away, and that $29 was a big help to keeping these providers on their feet through March and into April.”
The positions Signature eliminated Wednesday consisted of support and leadership staffers, with severance packages based on time of service.
In addition to the layoffs, Signature noted that it planned to employ other “significant cost-cutting measures,” including reduced support for trade organizations such as the Kentucky Association of Health Care Facilities, according to the statement.