Wes Thompson, administrator of Valley View Home in the northeastern Montana town of Glasgow, believes the only reasons his skilled nursing facility has avoided the fate of the 11 nursing homes that closed in the state last year are local tax levies and luck.
Valley County, with a population of just over 7,500, passed levies to support the nursing home amounting to an estimated $300,000 a year for three years, starting this year. And when the Hi-Line Retirement Center in neighboring Phillips County shut down last year as the covid-19 pandemic brought more stressors to the nursing home industry, Valley View Home took in some of its patients.
Thompson said he foresees more nursing home closures on the horizon as their financial struggles continue. But lawmakers are trying to reduce that risk through measures that would raise and set standards for the Medicaid reimbursement rates that nursing homes depend on for their operations.
A by the last legislative session found that Medicaid providers in Montana were being reimbursed at rates much lower than the cost of care. In his two-year state budget proposal before lawmakers, Republican Gov. Greg Gianforte has to the provider rates that fall short of the study鈥檚 recommendations.
Legislators drafting the state health department budget included 鈥檚 proposal, but still not enough for nursing homes to cover the cost of providing care. Those rates are subject to change as the state budget bill goes through the months-long legislative process, though majority-Republican lawmakers so far have rejected Democratic lawmakers鈥 attempts for full funding.
In a separate effort to address the long-term care industry鈥檚 long-term viability, a bipartisan bill going through Montana鈥檚 legislature, Senate Bill 296, aims to revise how nursing homes and assisted living facilities are funded. The bill would direct health officials to consider inflation, cost-of-living adjustments, and the actual costs of services in setting Medicaid reimbursement rates.
, which received an initial hearing on Feb. 17, has generated conflicting opinions from experts in the long-term care field on whether it does enough to avoid nursing home closures.
Republican Sen. Becky Beard, the bill鈥檚 sponsor, said that although the bill comes too late for the nursing homes that have already closed, she sees it as shining a light on a problem that鈥檚 not going away.
鈥淲e need to stop the attrition,鈥 Beard said.
, a research assistant at the Economic Policy Institute, a nonprofit think tank, said wages for nursing home employees had been extremely low even before the pandemic. He said the focus needs to be on raising Medicaid reimbursement rates beyond inflationary factors.
鈥淚ncreasing Medicaid rates for inflation is going to have positive effects, but there鈥檚 no way that it鈥檚 going to compensate for what we鈥檝e experienced in the last several years,鈥 Martinez Hickey said.
Colorado, Illinois, Massachusetts, and North Carolina are among the states that have adopted laws or regulations to since the pandemic began. Michigan, North Carolina, and Ohio adopted increases or one-time bonuses.
In Maine, a 2020 suggested that Medicaid rates should be high enough to support direct-care worker wages that amount to at least 125% of the minimum wage, which is $13.80 in that state. In combination with other goals outlined in the study, there had been modest increases in residential care homes and beds, improved occupancy rates, and nods toward stabilization of the direct-care workforce.
Rose Hughes, executive director of the Montana Health Care Association, which lobbies on behalf of nursing homes and senior issues, said many of the problems plaguing senior care come down to reimbursement rates. There鈥檚 not enough money to hire staff, and, if there were, wages would still be too low to attract staff in a competitive marketplace, Hughes said.
鈥淚t鈥檚 trying to deal with systemic problems that exist in the system so that longer term the reimbursement system can be more stable,鈥 Hughes said.
The governor鈥檚 office said Gianforte has been clear that Montana needs to raise its provider rates. For senior and long-term care, Gianforte鈥檚 proposed state budget would raise provider rates to 88% of the benchmark recommended by the state-commissioned study. Gianforte鈥檚 budget proposal is a starting point for lawmakers, and legislative budget writers have penciled in funding at about 90% of the benchmark rate.
鈥淭he governor continues to work with legislators and welcomes their input on his historic provider rate investment,鈥 Gianforte spokesperson Kaitlin Price said.
Democratic Rep. Mary Caferro is sponsoring to fully fund the Medicaid provider rates in accordance with the study.
鈥淲hat we really, really need is our bill to pass so that it brings providers current with ongoing funding for predictability and stability so they can do the good work of caring for people,鈥 Caferro said at a Feb. 21 press briefing.
But Thompson said that even the reimbursement rate recommended by the study 鈥 $279 per patient, per day, compared with the current $208 rate 鈥 isn鈥檛 high enough to cover Valley View Home鈥檚 expenses. He said he鈥檚 going to have to have a 鈥渉eart to heart鈥 with the facility鈥檚 board to see what can be done to keep it open if the local tax levies in combination with the new rate aren鈥檛 enough to cover the cost of operations.
David Trost, CEO of St. John鈥檚 United, an assisted-living facility for seniors in Billings, said the current reimbursement rate is so low that St. John鈥檚 uses savings, grants, fundraising revenue, and other investments to make up the difference. He said that while SB 296 looks at factors to cover operating costs, it doesn鈥檛 account for other costs, such as repairs and renovations.
鈥淚n addition to paying for existing operating costs as desired by SB 296, we also need to look at funding of capital improvements through some loan mechanism to help nursing facilities make improvements to existing environments,鈥 Trost said.
Another component of SB 296 seeks to boost assisted-living services by generating more federal funding.
Additional money could help reduce or eliminate the waiting list for assisted-living homes, which now stands at about 175 people, Hughes said. That waiting list not only signals that some seniors aren鈥檛 getting service, but it also results in more people being sent to nursing homes when they may not need that level of care.
SB 296 would also ensure that money appropriated to nursing homes can be used only for nursing homes, and not be available for other programs within the Department of Public Health and Human Services, like dentists, hospitals, or Medicaid expansion. According to Hughes, in 2021 the nursing home budget had a remainder of $29 million, which was transferred to different programs in the division.
If the funding safeguard in SB 296 had been in place at that time, Hughes said, there may have been more money to sustain the nursing homes that closed last year.
Keely Larson is the KHN fellow for the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Newspaper Association, and Kaiser Health News. Larson is a graduate student in environmental and natural resources journalism at the University of Montana.
