ELY— In the wake of the recently completed legislative session, area lawmakers met here with officials from the Boundary Waters Care Center to talk about how the session helped address the funding crisis for nursing homes and where it fell short.
Sen. Grant Hauschild, DFL-Hermantown, and Rep. Roger Skraba, GOP-Ely, may belong to different parties but they were of one mind when it came to finding ways to help the BWCC and other nursing homes in the region address an acute funding shortfall brought on by a variety of factors. The impacts of the COVID pandemic and subsequent inflation, delays in funding increases, along with staffing shortages that forced BWCC and many other facilities to turn to expensive contract nurses, have all contributed to what became an existential crisis for many.
BWCC executive director Adam Masloski told the lawmakers that his facility survived another day thanks to financial contributions from the community as well as a large, unspecified, contribution from Ely-Bloomenson Community Hospital.
“We wouldn’t have gotten here without that help,” said Masloski.
Masloski credited Hauschild and Skraba for their efforts and said it’s likely that $12.35 increase in the daily rate for nursing home residents and an $18 a day increase in the funding for critical access nursing homes, such as the BWCC, should help to keep the doors open for now. Masloski said those two increases, combined, should add a bit over $300,000 a year in additional state funding. That’s about a seven percent increase based on the facility’s $4.2 million annual budget.
Masloski said $750,000 in additional capital funding, added by Sen. Hauschild into the tax bill, should also free up some operating funds that had been going to facility repairs.
“Overall, you guys did a great job,” Masloski told the lawmakers. “You gave us breathing room. If I could ask for anything more, it would be to keep fighting for higher wages. We need to fill that funding gap.”
According to Masloski, the COVID pandemic created a worker shortage for most nursing homes, including BWCC, and that forced him to turn to staffing agencies for workers. Those workers typically cost nursing homes twice as much per hour as they typically pay for in-house staffing, and that’s when nurses are even available. With nurse shortages throughout the health care system and with many hospitals willing to offer bonuses for nurses that nursing homes can’t match, Masloski said there were times he simply couldn’t staff the nursing home, which limited his ability to accept new residents and increase revenue.
Given the relatively low pay traditionally for nursing home staffing, finding and keeping the help they need is increasingly a challenge, noted Masloski.
Nursing homes don’t have the option of raising money by boosting rates, said Masloski, since the rates homes charge are determined by the state. And reimbursements paid by the state have been increasingly lagging ever since the pandemic. Those payments, according to Masloski, are determined by a value-based process, based on the audited costs incurred by the facility for the care it provides to residents. In recent years, the lag time on auditing has increased significantly, meaning that payments to nursing homes are based on costs incurred about 21 months ago, on average. When inflation was running high last year, that put an increasing squeeze on nursing home budgets since their funding was based on prices in effect nearly two years earlier.
“It’s a complicated system, so there’s no easy fix,” said Masloski. “An inflation adjustment in the formula would help.” A faster auditing process, so that payments more clearly match current costs, would also make a difference, Masloski added.
While the Legislature took steps to address the concerns of nursing homes, Hauschild acknowledged the funding increases were a preliminary step. Lawmakers also established a committee to study nursing rates with a report due in January 2025. The latest adjustments on rates were intended to ensure that nursing homes can keep their doors open until that time.