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Pandemic Worsens Dire Financial Situation for SD Nursing Homes


South Dakota nursing homes have faced some of the highest fatality rates from COVID-19 in the country. The deaths have created new challenges for an industry that was already struggling with finances.?



The state is using a portion of its remaining pandemic relief money to help some facilities pay the bills.

Jenkins Living Center in Watertown went largely untouched by COVID-19 for the first few months of the pandemic. That changed during the statewide surge that began in October. As South Dakota’s COVID rates reached record highs, senior facilities found it more difficult to keep the virus out.??

Loren Diekman is president and CEO of the facility, which is one of the largest in the state. He says around half of his residents and 35% of his staff tested positive for COVID between mid-October and late November. Without statewide public health restrictions, infection rates and death rates continued to increase.

In early December, Diekman addressed the state appropriations committee.?

“We also experience 27 residents in my facility who passed away with COVID-related symptoms. And of course, the impact of that to our residents, residents’ families, staff, the entire community has been devastated.”

At the same time, lawmakers were talking about the hundreds of millions of dollars remaining in pandemic relief money.?

Diekman says that money could help his industry survive.?

"Our census did drop dramatically because of the number of deaths and the fact we weren’t taking admissions. So in a facility like ours where we budget for a census of about 140--that’s where we’ve been historically--we were down to about 85 at one point. And we’re just now gradually starting to come up from that.”

The pandemic added to financial struggles that have hounded long-term care for years. The South Dakota Health Care Association represents many of the state’s long term care facilities. Mark Deak is the executive director. He often reminds lawmakers that South Dakota has one of the lowest Medicaid reimbursement rates in the country.?

“About 54% of all nursing center residents use Medicaid for their stay, and frankly, when operators take on Medicaid residents they lose money.”

Deak says nursing homes lose about $42 a day for every Medicaid resident. Loren Diekman of Jenkins Living Center says that deficit hits staff the hardest. With better state funding through Medicaid, his facility could offer more competitive wages.?

Instead, staffing has remained an ongoing challenge for many facilities. Then came the pandemic, which cost facilities even more in decreased admissions, PPE, and testing kits. For example, Diekmman says his facility spent nearly $39,000 on COVID test kits in just one month.?

“The early monies we received through the CARES Act, the PPP funds, additional stimulus funds that came through the Department of Health and Human Services, and some state funds as well initially--they have allowed us to survive during this time.”

Those initial aid funds totaled about $1.6 million for Jenkins Living Center. Diekman understands that may sound like a lot at first.

“In fact, in this fiscal year, due to the lower census and the additional expenses and things, we’ve incurred about a million-dollar loss so far in this fiscal year. And our fiscal year runs April 1 to March 31, so we’ve still got a few months left.”

That’s why Diekman shared his story with the state appropriations committee. In early December, lawmakers were considering what to do with hundreds of millions in CARES Act funds that hadn’t yet been dispersed. Mark Deak of the South Dakota Health Care Association also addressed the committee.?

“Obligating this funding, which otherwise would revert back to the federal government, to helping our caregivers and residents would make a huge difference in our centers. And I ask for your support of a per-bed allocation, as proposed by the governor.”

The state did set aside $75-million in grants for hospitals, skilled nursing facilities and nursing homes. Facilities had to apply for the money, and the amount is determined by the level of care and number of licensed beds. Skilled nursing facilities like Jenkins Living Center will receive $6,400 dollars per bed.?

Mark Deak is glad to see funds set aside for long-term care.?

“That was a boost we certainly needed. It’s going to be a very tough winter ahead, but this at least will help bridge that in terms of paying for some of the resources we so much need.”

Governor Kristi Noem proposed a 2.4% funding increase for Medicaid providers during her latest budget address. Deak calls it a good start.?

“Of course, we hope we can increase that as the session goes on.”

The legislative session will start later this month, just as Loren Diekman of Jenkins Living Center looks forward to receiving his facility’s share of the CARES Act money. The financial strain continues, but there’s some hope: residents and staff of senior centers around the state are already receiving doses of the COVID-19 vaccine.?

-Contact SDPB reporter Jackie Hendry by email.

Jackie is based out of SDPB's Sioux Falls Studio.