Minnesota nursing homes under stress, for reasons politicians aren’t talking about

The sole nursing home in Arlington, Minn., is set to close by the end of August.

The Good Samaritan Society’s skilled nursing facility in Arlington, about an hour southwest of the Twin Cities, has cared for about 40 patients. It is one of dozens of facilities owned by the South Dakota-based nonprofit chain, which reported slight losses on over a billion dollars in revenue in 2022, the most recent year for which tax filings are available.

Katie Davis, Good Samaritan Society Vice President, said in a statement that the Arlington facility faced persistent staffing challenges, pulling in staff from other locations across the state for more than a year.

“We’ve reached a situation that is not sustainable, and as a result, we will unfortunately close our doors on August 26,” Davis said. “We care deeply about our residents, who are like family to us, and are committed to helping them find new homes.”

Across the country, staffing nursing homes has been a challenge since the pandemic.

This month, politicians representing the area were quick to chime in with their theories on the home’s closure.

Rep. Michelle Fischbach, the Republican congresswoman who represents the Seventh District in western Minnesota, pointed to new federal rules that will require more staff per patient, including a requirement that a registered nurse be on site around the clock.

“This is a problem that will be made worse when [President Joe] Biden’s federally mandated nursing staff ratio goes into effect,” Fischbach said in a statement about the Arlington home’s closure.

State Sen. Glenn Gruenhagen, R-Glencoe, said he thought more one-time aid to nursing homes in 2023 could have staved off closure. The budget set aside $300 million for skilled nursing facilities. “Though the emergency assistance of 2023 has helped, without action we know more closures are coming,” Gruenhagen said in a statement. “We need to eliminate the red tape. We need to boost retention. We need to invest in recruitment and build a strong pipeline of staff.”

Yes, staffing has been a challenge for years, said Toby Pearson, president and CEO of Care Providers of Minnesota, a trade group for nursing homes, and staffing has been even harder since the pandemic. Higher minimum pay proposals from a state workforce standards board, and the new federal requirement for a registered nurse to be on site, will be challenging for homes, especially outside the Twin Cities, he said.

But for Minnesota nursing homes, one of the biggest problems that has been less noticed is how long it takes the state to reimburse for care, Pearson said.

Nursing home care is funded largely by Medicaid, the health insurance program for poor and disabled people jointly funded by federal and state governments and administered by states.

Minnesota’s Medicaid system has a complicated system of anti-fraud checks for nursing homes, Pearson said, which means it often takes a year and a half to two years for homes to get paid back by the state.

No one is saying those checks should be gone, Pearson said. The issue, he said, is when inflation eats away at the value of reimbursement payments that come two years later.

“In the days of low inflation, it really wasn’t much of a problem,” he said. But when inflation was high, especially in 2021 and 2022, the purchasing power of a reimbursed dollar was less.

Pearson said his association has been advocating for some kind of inflation adjustment to those reimbursement payments, but so far the issue has not gained traction at the Legislature.

The Legislature did make some moves to help nursing homes two sessions ago, including the one-time funding and temporarily raising reimbursement rates for some services, Pearson said. But those higher reimbursement rates end at the end of this year, and “they didn’t do any ongoing money investment.”

With pandemic-era aid winding down and the staffing shortage as bad as it has been, Pearson said he expects to see more nursing homes downsizing to make sure they have enough staff to care for their patients, and more closures.

He worries more closures will mean people have to travel farther for nursing home care. And their loved ones have to travel more for visits, which Pearson said makes him worry about more social isolation for nursing home residents.

“You can look at it from all the business angle stuff,” Pearson said “But what are we doing to the access of seniors that need the care?”