Kansas nursing homes try to ‘pick up the pieces’ in aftermath of pandemic, inflation costs
TOPEKA — Battered by the COVID-19 pandemic, inflation, staffing shortages and the strain of a population skewing older, the Kansas nursing home industry needs to be carefully monitored, advocates say.
“When you walk into an area after a tornado, where do you begin?” questioned Linda MowBray, president and CEO of the Kansas Health Care Association and Kansas Center for Assisted Living during a Sept. 21 legislative conference on nursing home oversight. “Where do you even start to pick up the pieces?”
MowBray said 26 nursing homes had closed across the state in the past three years, an estimated seven counties have no nursing homes at all, and several other counties just have a long-term care unit in a hospital — an issue that could balloon as the average Kansas age shifts upward. Demographic reports estimate that by 2036, the number of Kansans 65 or older will grow by more than 40%.
In the aftermath of the COVID-19 pandemic, aging service providers warned lawmakers of temporary staffing agencies “price gouging” Medicaid providers, with some alleging that companies were charging more than triple the typical rate for essential workers.
MowBray said the industry had seen some improvement following increased reimbursement for aging service providers. During the 2022 legislative session, lawmakers voted to adjust the Medicaid reimbursement rates for aging services providers, covering cost discrepancies through a Medicaid add-on.
“Without the add-on, we just wouldn’t have been able to keep pace,” MowBray said.
Rachel Monger, president and CEO of LeadingAge Kansas, said her organization was seeing some new nursing home applicants for the first time in a while because of the increased funding.
“We are still a long way from good on the staffing shortage problem,” Monger said. “But based on the chasm we were stuck in these last few years, even just getting these job applications for nursing positions just feels miraculous. And so that money has been immediately put to good use.”
While the add-on has helped, the two warned reimbursement rates for other nursing home needs should also be adjusted to keep up with demand. Monger said dementia care was especially expensive to provide.
“The biggest losses that our members show are in that staffing category,” Monger said. “The amount of money and the amount of staff they hire to provide the quality of care that they believe is necessary does not match up with the reimbursement that the state gives them to actually provide that care to most of their residents.”
Dawn Veh, a board member with Kansas Adult Care Executives, said inflation has also significantly increased costs. Staffing costs increased between 25% to 50% for various staff positions in the past few years, Veh estimated, and supplies have also gone up. Veh said one box of gloves has increased in price by 50%. A box of bacon the organization orders has gone from $50 to $75.
“We’re actually losing $12 a day, based on this cost report sheet,” Veh said. “We have 45 Medicaid residents in our building. So if you take that times 365, it’s $197,000 that we are spending that we’re not getting reimbursed, just because of the formula that’s being used.”
“With this add-on, it really is just helping facilities to stay open while we continue to make adjustments to what’s been happening,” Veh added.
Others at the meeting took a different approach. David Kingsley, executive director of the Center for Healthcare Information and Policy, said the entire system needs to be more transparent and the state needs to make sure nursing homes aren’t being overpaid.
He said private equity and big corporations have taken over the Kansas nursing home industry.
“I would be hard-pressed to find any facility today in Kansas that is a mom and pop operation, No. 1. No. 2, I would be very hard-pressed today to find a chain that is owned by a Kansas corporation,” said Kingsley, a retired statistics professor from the University of Kansas Department of Health Policy.
“One thing that’s happened in this industry is it’s become what we call ‘financialized,’ ” Kingsley added.
Lawmakers said they would examine reimbursement rates further in the upcoming legislative session.
“One group is sitting there going, ‘We aren’t making it, we’re barely covering our costs,’ and then you come in and these guys are getting rich off of their nursing home operations,” said Rep. Will Carpenter, a Republican from El Dorado. “It just strikes me as kind of odd.”