2021 Will See ‘Many Facilities Fail’ Without Federal, State Help

Nursing home and senior living providers in the not-for-profit sector are facing significant strains from the surge in COVID-19 nationwide. Leading into the Thanksgiving holiday, operators are pleading with those in the community to refrain from gathering amid challenges both operational and financial.

“Nursing homes really are at the brink,” Deke Cateau, the CEO of the nursing home provider A.G. Rhodes in Atlanta, said during a Monday press conference. “We are at our financial brink. We are at our operational brink. And, quite frankly, we are at our emotional brink.”

The press conference was held by LeadingAge, a trade association for nonprofit senior living and care providers. The briefing focused on the financial and operational challenges facing the sector.


A.G. Rhodes is grappling with those challenges itself. The provider has three locations in the Atlanta metro area, with two of those providing weekly COVID-19 testing and the third doing “outbreak testing,” Cateau said on the call.

The provider uses both antigen point-of-care and point-of-care polymerase chain reaction (PCR) testing, but it has seen accuracy issues with the antigen tests, he said. Meanwhile, the PCR tests have been reliable; for the point-of-care PCR tests, results are returned within 45 minutes. For tests sent out to laboratories, the maximum turnaround time is about 48 hours.

That is not the case in Fort Dodge, Iowa, according to Julie Thorson, president and CEO of the continuing care retirement community (CCRC) Friendship Haven.


“With the PCR testing, we are unfortunately not seeing a 48 hour turnaround there,” Thorson said. “We’re seeing four to five days in some cases. And I think that’s because of just what is happening in Iowa.”

The state reported 1,661 new cases of COVID-19 on Monday, the Des Moines Register reported.

Due to the positivity rates in its county, Friendship Haven is testing employees twice a week and residents in its health center every other day, she added. So far, the supplies have been able to keep up, Thorson said, but how long that will last is not clear.

Antigen point-of-care tests were shipped out to nursing homes by the federal government as part of an effort to address sometimes long turnaround times from laboratories on PCR testing. Despite questions about the tests’ reliability, the Department of Health and Human Services (HHS) has stressed that diagnostic true and false positives are a function of the prevalence of a disease within a population.

Thorson also noted that the CCRC is paying employees who work with COVID-19 patients a certain percentage over their typical wage, which “is definitely adding up.” Other expenses include personal protective equipment (PPE) and screening tables, she said. And because it’s hard to know how long the extra costs will be necessary, it adds to the difficulties of putting together an operating plan for 2021.

Another significant expense is isolation for new admissions, Cateau said on the call. The PPE expenses are significant, and A.G. Rhodes has gone from an occupancy of over 90% to around 60% to 70% at some times during the pandemic.

“[For] a Medicare resident who comes into our nursing home, who is required to be on isolation for 14 days, we use all the isolation procedures, the PPE, the supplies – and we’re not paid a dime extra for that individual,” he said. “So that’s a huge revenue impact on us. We are literally on wit’s end because of it, and I just honestly don’t know how long we can sustain these losses in revenue.”

The losses in revenue are hitting providers across the country, especially as occupancy in SNFs continues to struggle and admissions have yet to recover.

A member of LeadingAge Wisconsin testified to the governor of the Badger State last week that they have spent $200,000 over budget on PPE, John Sauer, the president and CEO of LeadingAge Wisconsin, said during the press conference. That member has also spent more than $700,000 on temporary staffing, he noted.

“[The member facility] says year-to-date, their budget is $1.8 million dollars over in the red compared to what they budgeted,” Sauer said on the call. “And [the facility] questioned how this is sustainable, and did indicate, ‘We did not meet our required debt service coverage ratio, putting our organization in default on our bond issue.’ That’s not an uncommon story.”

He echoed comments by LeadingAge president and CEO Katie Smith Sloan on the importance of sustained funding to see providers through pandemic but specifically called out the need for improvements on the Medicaid program in Wisconsin, as well as federal support for testing and regulatory reform to “target facilities that are struggling and reward those facilities that are all about quality improvement and community involvement.”

Sauer also emphasized the need to address staffing, through specific measures such as loan forgiveness programs for nurses and certified nursing assistants, as well as broader moves such as immigration reform. On top of that, he was emphatic about the need to look at strategies for paying for long-term care.

But getting through the pandemic is the first step, he added. And even then, facilities might not necessarily survive in the long term.

“I think without a doubt, unless there’s some further commitment from our Medicaid program in particular, we’re going to see many facilities fail in 2021,” Sauer said.

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