Local tax levies and sheer luck are the sole factors behind Valley View Home in Glasgow, according to Wes Thompson, the facility’s administrator. He attributes the nursing home’s ability to evade closure, unlike the 11 others in the state last year, to these circumstances.
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.
According to Thompson, he predicts that there will be further nursing home closures in the future due to their ongoing financial difficulties. Nevertheless, legislators are making efforts to mitigate this risk by introducing measures that would increase and establish standards for Medicaid reimbursement rates, which nursing homes rely on to sustain their operations.
A study commissioned 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 proposed increases to the provider rates that fall short of the study’s recommendations.
Legislators drafting the state health department budget included rates higher than the governor’s 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’ attempts for full funding.
In a separate effort to address the long-term care industry’s long-term viability, a bipartisan bill going through Montana’s 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.
Experts in the long-term care field have conflicting opinions on whether SB 296, which had its initial hearing on Feb. 17, adequately prevents nursing home closures.
Sen. Becky Beard, R-Elliston, the bill’s 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’s not going away.
Beard stated that it is imperative to put an end to the attrition.
Sebastian Martinez Hickey, 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.
According to Martinez Hickey, while increasing Medicaid rates for inflation will bring about some positive outcomes, it is unlikely to fully make up for the challenges we have faced in recent years.
Colorado, Illinois, Massachusetts, and North Carolina are among the states that have adopted laws or regulations to increase nursing home staff wages since the pandemic began. Michigan, North Carolina, and Ohio adopted increases or one-time bonuses.
In Maine, a 2020 study of long-term care workforce issues 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, after a year there had been modest increases in residential care homes and beds, improved occupancy rates, and nods toward stabilization of the direct-care workforce.
While increasing Medicaid rates to match inflation may yield positive outcomes, it is unlikely to fully make up for the challenges we have faced in recent years.
Sebastian Martinez Hickey, research assistant at the Economic Policy Institute
According to Rose Hughes, the executive director of the Montana Health Care Association, which advocates for nursing homes and senior concerns, the challenges faced by senior care primarily stem from inadequate reimbursement rates. Insufficient funds make it difficult to recruit and retain staff, and even if more resources were available, the wages offered would still be uncompetitive in the market, as stated by Hughes.
Hughes stated that the aim is to address the systemic issues within the system in order to achieve greater stability in the reimbursement system in the long run.
According to the governor’s office, Gianforte firmly believes that Montana should increase its provider rates. In his proposed state budget, Gianforte aims to raise provider rates for senior and long-term care to 88% of the benchmark rate suggested by the state-commissioned study. However, it is important to note that Gianforte’s budget proposal serves as a starting point for lawmakers. The legislative budget writers have tentatively allocated funding at approximately 90% of the benchmark rate.
Kaitlin Price, spokesperson for Gianforte, stated that the governor is actively collaborating with legislators and appreciates their contributions regarding his groundbreaking provider rate investment.
Rep. Mary Caferro, D-Helena, is sponsoring a bill to fully fund the Medicaid provider rates in accordance with the study.
During a press briefing on February 21st, Caferro emphasized the importance of passing our bill. She stressed that it is crucial for providers to receive ongoing funding, as it would ensure predictability and stability. This, in turn, would enable them to continue their commendable work of caring for people.
Thompson stated that despite the study’s suggested reimbursement rate of $279 per patient, per day (compared to the current $208 rate), it still falls short of covering Valley View Home’s expenses. He expressed the need for a sincere conversation with the facility’s board to explore possible solutions for keeping it operational if the local tax levies and the increased rate fail to cover operational costs.
According to David Trost, the CEO of St. John’s United, an assisted-living facility for seniors in Billings, the existing reimbursement rate is insufficient. To bridge the gap, St. John’s relies on savings, grants, fundraising revenue, and other investments. Trost mentioned that although SB 296 considers factors to cover operational expenses, it overlooks additional costs such as repairs and renovations.
Trost stated that besides covering the current operational expenses as specified in SB 296, it is crucial to explore financing options for capital improvements in nursing facilities. These loans would aid in enhancing the existing environments.
SB 296 also aims to enhance assisted-living services by increasing federal funding.
According to Hughes, an increase in funding could potentially alleviate the current waiting list for assisted-living homes, which currently consists of approximately 175 individuals. This waiting list not only indicates that certain seniors are not receiving the necessary assistance, but it also leads to an unnecessary influx of individuals being placed in nursing homes, even if they do not require 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 Senior and Long Term Care division.
According to Hughes, if the funding safeguard outlined in SB 296 had been implemented at that particular time, it is possible that there would have been additional financial resources to support the nursing homes that shut down last year.
