Montana Healthcare Association Addresses the Need to Close the Funding Gap for Nursing Home Care

“Who will take care of us?” It is a question I was recently told an elderly gentleman asked when informed that the nursing home where his wife receives care is closing. It made me sad to think that this man has been put in a position to have to ask that question.

Rose Hughes, MHCA Executive Director

If anyone had asked me that just a few years ago I would have answered: “We have a safety net for our elderly. He and his wife will be cared for in their old age if they are unable to take care of themselves.” Today, my response would be “I don’t know.” Those in a position to make a difference don’t seem to care.

Since the beginning of the year seven nursing homes in Montana have closed or are closing. These facilities are in Ronan, Hamilton, Missoula, Malta, Hardin, Red Lodge and Bozeman. Malta, Hardin and Red Lodge will be left without any nursing home. Ronan and Hamilton are down to one facility. In Bozeman, Gallatin Rest Home will be the only available facility. It has 69 beds, with some of those beds devoted to short-term rehab. Valley View Home in Glasgow was also seriously considering closure but got a reprieve due to help from the community and local hospital. How long that lasts is uncertain.

Why is this happening?

The pandemic has dealt the final blow to care facilities that were already struggling. Nearly 70% of nursing home residents are on Medicaid — and Medicaid rates have been too low for a long time. The pandemic brought huge cost increases for infection control, new regulations for testing, screening, quarantine and isolation and because of labor shortages that brought big increases in wages, benefits and incentives and also required increased use of expensive contract labor, or “travelers” as they are called. During 2020 and 2021 facilities received help from the state and federal governments — but all the help stopped — even though COVID-19 hasn’t stopped. In the past year, there have been three separate waves of COVID outbreaks in our facilities and in Montana. One outbreak earlier this year reached higher levels than the original outbreak back in 2020.

The Medicaid rate for nursing home care is $212.57 per day. According to DPHHS contractor Myers & Stauffer, the cost of a day of nursing home care in Montana for FY 2021 was $277.93 — a shortfall of $65.36 per day for every Medicaid patient a nursing home serves! Costs have increased substantially since June of 2021 — labor costs continue to grow by leaps and bounds and we are now facing double digit inflation — so the shortfall is greater.

A DPHHS study on Medicaid rate adequacy has determined that paying rates that cover the costs of the services studied would cost $87 million a year, with the state general fund share being about $27 million. That does NOT include the nursing home shortfall which is still being “studied.”

DPHHS and the current administration were warned months ago that nursing homes would close and elderly residents displaced unless a short-term solution was found for the grossly inadequate Medicaid rates. Nursing homes were not asking for a handout. They simply asked that Medicaid rates reasonably reflect the new normal in terms of labor costs and inflation. Despite a surplus in the nursing home part of the budget, no help was offered. The closures are happening and are likely to continue.

So, to answer the gentleman — until the state stops shirking its responsibility regarding Medicaid rates, I don’t know who is going to take care of you and other older Montanans. And that saddens me.

Rose Hughes is the executive director of the Montana Health Care Association, an association of long-term care facilities and services throughout the state of Montana.

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