Nursing Homes Continue to Struggle After 10% Reimbursement Increase

Nov 4, 2019

Six nursing homes in South Dakota closed over the last year and a half--including the Hudson Care and Rehab Center within the last month. The closures are driven by low Medicaid reimbursement rates from the state. 

The legislature approved a 10% reimbursement increase earlier this year. But testimony during last week's Government Operations and Audit Committee meeting shows the problem is far from solved. 

Rural facilities are especially strained by Medicaid the funding gap, and several—like the 109-bed facility in Mobridge—have closed. The committee heard a statement from a hospital administrator in Mobridge on the closure’s impact on the community—including citizens who otherwise expected to live out their lives in Mobridge planning to move closer to other facilities.

Senator Susan Wismer is a member of the Government Operations and Audit Committee and was one of the legislators who pushed for a larger reimbursement rate during the last session. She says the closures are a result of legislative and administrative failures to be realistic about funding needs.

“And when we brag about how we’re such a well-run state, and we brag about living within our means, we are bragging about closing that nursing home in Mobridge," says Wismer.

But some committee members wondered if surviving nursing homes are running more efficiently as they receive residents from closed facilities. Tim Rave of the South Dakota Association of Healthcare Organizations notes that when the Mobridge home closed some residents went to neighboring communities, but most didn’t.

“But a lot of those people don’t live in the state anymore. I guess yeah, that’s a lot more efficient. The state’s not paying for them. I guess North Dakota is. But they’re not here, either, in their home. So I mean, I think it’s a balance, right?” says Rave.

More than half of nursing home residents in the state are Medicaid-eligible. Even with this year’s rate increase, facilities are operating at an average $42 loss each day for every resident paying through Medicaid.

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