As nursing homes closures continue across the country, “nursing home deserts” are expanding, and the proposed federal staffing mandate is expected to exacerbate the problem.
This is despite attempts to make the potential policy change easier for providers in rural markets, which are especially vulnerable to access issues. Operators in these areas point to the 24-hour RN requirement as being especially devastating.
Nate Schema, CEO with the Evangelical Lutheran Good Samaritan Society, says the organization’s facilities located in “deep rural communities” will struggle the most with the 24-hour RN rule. The South Dakota-based Good Samaritan Society is the largest* nonprofit provider of nursing care beds in the United States, according to the latest LZ200 rankings.
In communities like Bloomfield, Nebraska (with a population of about 1,000 people), or Miller, South Dakota (population of about 1,300 people), Schema isn’t sure where Good Samaritan will find even six RNs; the Miller facility hasn’t had a night nurse for upward of three years.
The best metaphor he’s recently heard compares the proposed mandate to a tornado warning, Schema told Skilled Nursing News during a recent interview at the American Health Care Association/National Center for Assisted Living (AHCA/NCAL) conference in Denver.
“Especially for us Midwest folks, it’s like the sirens are going off. The tornado is coming, you don’t know where it’s going to land. But when it lands, it can wipe out a community,” he said.
Rural and small markets in particular are facing drastic access issues, with more than 30 additional counties recently being listed as “nursing home deserts” by the AHCA.
“We have some counties in the state of Iowa where there might be only one nursing home or two nursing homes. If one were to close, there’s significant distances families need to travel,” Michael Beal, CEO of Care Initiatives, told SNN.
He pointed to the particular risk for situations in which a nursing home resident has a spouse living in the nearby community. Care Initiatives operates more than 40 facilities across Iowa.
Reimbursement remains main driver of access issues
The ability to have a nursing home open in a small town is getting more difficult because of the disparity between Medicaid reimbursement and overall costs, Accura HealthCare CEO Ted LeNeave told SNN. Accura operates 34 communities across Iowa, Minnesota, Nebraska and South Dakota.
“The provider relief fund helped to mask how bad those problems were. Once that cash dried up, buildings started closing,” said LeNeave. “This concept of a nursing home desert is an area where residents need nursing home care but there’s no access to them. Then they have to drive 45 minutes to an hour to be somewhere else.”
It’s even worse for memory care in the state, he said, with drives taking up to two hours to get these services.
One facility in rural Iowa closed just last week, Beal said, and Care Initiatives took a dozen or so of the displaced residents into nearby facilities – the closest being 30 miles away. The standalone property had to close its doors due to emergency financial issues, according to Beal, and operators in the state have heard that more closures are coming.
About 25 SNFs have closed in the state in the past year-and-a-half – that’s prior to the proposed minimum staffing rule, LeNeave added.
So far, closures have been a function of labor cost pressures and post-pandemic reimbursement, despite the two rounds of Medicaid reimbursement increases for the state.
“Honestly, it’s been a very good year from an increased reimbursement perspective. There are still facilities where even with those rate increases, that is not enough to make it up,” said Beal. “There’s still lots of buildings that are way down in occupancy and those buildings are still struggling to be viable. I think that’s the phenomenon today in terms of closures.”
And Iowa is not the only state with expanding nursing home deserts. Good Samaritan was forced to close a property in North Dakota within the last month, in a community consisting of 700 people.
“We can’t find staff. We had plenty of people to serve, 32 residents, roughly 30 staff members, but we didn’t see a sustainable future largely because we didn’t have the workforce in place to make it a sustainable future,” said Schema.
Kicking the can
The federal minimum staffing proposal will increase the labor cost-to-reimbursement disparity, especially if reimbursement isn’t increased to help operators meet staffing requirements, Beal said.
Should it be enacted, the mandate is expected to force facilities already in financial peril to close, even with the additional time CMS is giving rural operators to comply.
“It doesn’t matter if it’s 5, 10 or 15 years, if there’s no additional reimbursement, it’s just a timing question on when that will affect [rural operators]; it just kicks the can down the road,” Beal said, adding that an arbitrary number of staff hours per resident day without a reimbursement mechanism and the ability to actually hire staff puts rural operators in an “untenable situation.”
And, there are instances in which a rural facility may have to close despite being high quality, as reflected in a strong Five Star rating.
“It is definitely going to happen. All of my rural facilities would have to close,” said LeNeave. “None of them meet the staffing requirements as they are proposed right now, especially as you get to the 24-hour nursing requirement for RNs. Every one of those facilities would have to close. That’s hundreds of people that would have to find a new home, where we’re the only nursing home in that town, or the only nursing home for 30 miles.”
Out of Accura’s 34 nursing homes, LeNeave considers 30 or 31 of them to be in rural areas.
Financial viability of rural facilities
Unlike nursing homes, LeNeave said we don’t see “hospital deserts” as often because of the way that reimbursement is set up for critical access hospitals.
“If you do see hospital deserts, it’s because they probably couldn’t find the staff, not because of the reimbursement for nursing – that’s totally different. Our deserts are created by reimbursement challenges, but also by staffing problems,” said LeNeave.
Schema believes there’s going to be a lot of “healthy debate” over whether there should be special designations for certain nursing homes, similar to the critical access hospital category.
In terms of occupancy recovery, a vital component to financial viability, Beal said that in the wake of the public health emergency, many operators have artificially kept occupancy low primarily as a mechanism to keep contract labor down. In some markets, this has caused admission denials for nearby facilities, meaning some people cannot access care at all, while also creating situations in which loved ones have been forced to drive long distances to visit loved ones in nursing homes where they can be admitted.
There are reasons to be optimistic about staffing challenges. As it became easier to hire and retain staff at the end of 2022 and into 2023, Care Initiatives was able to reduce agency use by 65% and reduced turnover by 25%.
But it’s important to note that CMS’ own study said no specific amount of staffing correlated to better care, especially if the workforce is supplemented largely by agency staff. LeNeave has seen this play out in real time, when Accura did some consulting work for another Iowa operator.
The Iowa facility was struggling financially and with quality, even though the building had twice as much staff as a typical facility of its size, he said.
“Just throwing more staff in a building doesn’t mean you’re going to get better quality outcomes at all. It really is about the operations and about the acuity of the patients and how you structure your building. It’s about how the building is laid out physically. There’s a lot more that goes into it than just having bodies,” said LeNeave.
*Editor’s note: A previous version of this story stated that the LZ200 ranked The Good Samaritan Society as the second-largest nonprofit provider of nursing care beds in the United States. The story has been updated to reflect that the organization is the largest nonprofit provider of nursing care beds. SNN regrets the error.
Companies featured in this article:
Accura HealthCare, Care Initiatives, Evangelical Lutheran Good Samaritan Society
