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The Mobridge Care and Rehabilitation Center is seen in this handout photo.

As two more nursing homes prepare to close, no solution in sight for South Dakota's crisis

ABERDEEN, S.D. - It’s been nearly six years since 87-year-old Phyllis Stiegelmeier moved a block away from her home in Selby into the nursing home.

Keeping his mom close to family — and in the community she knows and loves — was as important then as is it now, said her son, Jerry Stiegelmeier.

But in recent years, nursing homes throughout the state and nation have been closing their doors, forcing older residents to transition into new living environments.

Stiegelmeier was once worried that day would come for his mom, having heard some of the struggles with area nursing homes operated by Skyline Healthcare.

There were rumors around Selby that its nursing home, owned by the Good Samaritan Society, might not be doing well, either.

Eventually, Good Samaritan said it wanted out, and the town and surrounding region rallied to raise $500,000. Community members from Selby, Java and Glenham founded a nonprofit agency, Walworth County Care Center, which took over operations of the nursing home Dec. 1.

Phyllis Stiegelmeier will stay put.

The support behind keeping the facility has been amazing and is something typically unheard of in a town of less than 700 people, Jerry Stiegelmeier said.

“The people that donated say that this is what needed to happen to help our whole community. And not just the people in town, but the surrounding area, too,” he said. “If this is the trend, hopefully it all works out as well as it did for Selby.”

And it is the trend.

Within the last few years, nursing homes have also closed in Rosholt, Bryant and Tripp, according to the South Dakota Health Care Association. More recently, the state approved the closings of the nursing homes in Mobridge and Madison.

Black Hills Receiver has tried to financially stabilize those two nursing homes, along with 16 others plus an assisted-living facility in the state, since May 1. That’s when it was appointed receiver of the severely failing facilities being operated by New Jersey-based Skyline Healthcare.

Receivership is a legal process in which a person or group — the receiver — is appointed by a judge to oversee business operations and finances. It's sometimes used when businesses have financial issues.

From what he’s seen, Black Hills Receiver has been doing well, said Mark Deak, president of the South Dakota Health Care Association.

But finances are still a problem.

Nursing homes are losing an average of $32.24 per day for each resident paying with Medicaid, according to the health care association. That’ll add up to more than $38 million per year, Deak said.

South Dakota’s Medicaid reimbursement rates are among the lowest in the nation, and the state has one of the largest gaps between actual costs and reimbursement, he said.

“What we see going forward will be even worse than (what we've already seen),” Deak said.

“The silver tsunami we have coming, the baby boomers, they haven’t hit in full force yet. But they are on their way" to needing more care in nursing homes, he said.

More time needed

When Black Hills Receiver petitioned the state to close the Mobridge and Madison nursing homes, it hit Mobridge hard. The care and rehabilitation the facility offers has been a staple in town since the 1960s. And by providing more than 70 jobs, it is also an economic driver.

That’s why Michele Harrison, executive director of Mobridge Economic Development, joined others in fighting for more time to keep the home open, to look at the financials, to find a different solution.

She pointed to Selby’s relationship with its owner/operator and her disappointment with Black Hills Receiver.

“(Selby) had a good relationship with Good Samaritan,” she said. “The way (the Mobridge nursing home) was running, I understand. But gol' dang, I would’ve thought they would’ve worked with us a little.”

Black Hills Receiver had already sent out closure letters to its residents and their families and given employees termination letters prior to a Dec. 20 court date during which the a judge approved the closing, which could come as soon as Jan. 31.

Residents have begun to move out — some even to Selby, Harrison said.

The effect of the moves and job losses will trickle down. Kids will leave the school system when their parents need to leave town for new jobs, and some families might move with their loved ones, she said.

Writing on the wall

A nursing home closing is something that Tom Wagner of Rosholt has had to endure.

Wagner was on the board of directors for Northeast Care and Rehabilitation before it closed at the end of 2016.

“These nursing homes, it’s a bad deal in South Dakota,” he said.

The Rosholt nursing home was operating under area shareholders.

“We thought we could make it work as a nonprofit,” Wagner said. “But it didn’t.”

There were two main reasons the closing was necessary, with the clear No. 1 reason being the Medicaid reimbursement rate, he said.

The second was not being able to find enough help, which meant the home was forced to hire temporary workers that were paid about three times as much as the local employees, he said. Additionally, the temporary workers received mileage and were traveling hundreds of miles to work.

“The month of September 2016 we had umpteen temps come in, so the handwriting was on the wall,” Wagner said. “There’s just no way to make it, so we had to make the decision to close.”

The decision was tough, but not as tough as the resulting residential moves and job losses.

“The reaction, I tell you what, it wasn’t good,” he said. “It was very tough on the residents. And it was very tough on our staff, too. They were so compassionate with our residents. It was very, very tough.”

The 30 or so residents went to roughly 10 different homes, the most to the nearby Sisseton nursing home. Others went to nursing centers in North Dakota, Minnesota, Iowa and beyond. The employees all had to find new jobs, too, he said.

Wagner isn’t optimistic about the future of the industry.

“I think it’s just going to be a matter of time (before more close). There’s another 17 homes kind of on the chopping block,” he said. “But I tell you what, I don’t know what the answer is.”

Filling in the gaps

The health care association has reached out to all state legislators to let them know how bad it is, Deak said. The solution is to muster the will to do the right thing and provide the resources needed by those who care for the residents, he said.

That means money.

In Gov. Dennis Daugaard’s budget address, he proposed a 2.3 increase in Medicaid funding. That’s appreciated, Deak said, but likely not enough.

The Shared Savings Group — made up of government officials, health care professionals and legislators — is working for change at the federal level, Deak said, by “trying to get (the federal government) to do what it should be doing already.”

That’s to pay for the care of Native Americans in nursing facilities, which would save the state money, Deak said.

“I really do think it comes down to will. It’s been said that the moral test for any government is how it takes care of those in the dawn of life, in the shadows of life and the twilight of life,” he said.

He believes more funding could come from online sales tax revenue from sellers like eBay and Wayfair, which was not included in the governor’s budget address. The state will now get sales tax from those transactions, thanks to a U.S. Supreme Court decision.

Deak has visited more than 70 facilities across the state, he said. Of those, about half are operated as for-profit businesses. The other half are nonprofits.

But he’s not sure it makes a difference.

Bethesda Home in Aberdeen operates as a nonprofit and is sponsored by a nine-member board elected from 12 area churches.

The difference between the cost of operation and what Medicaid pays is still a constant problem, said Bruce Johnson, Bethesda administrator.

“Oh yeah, that happens to us, too. It affects us,” he said. “The state really has to take a real hard look at it.”

About half of Bethesda’s clients rely on Medicaid funding. As it is at other facilities, unreimbursed costs are passed onto the residents who can pay privately, he said.

South Dakota has a moratorium on the number of nursing home beds in the state — around 8,200, said Derrick Haskins, communication director for the South Dakota Department of Health.

Once a nursing home closes, it can relinquish its licenses, he said. Then, those beds that can be redistributed by the state. In Rosholt’s case, they were transferred to a nursing home in Rapid City, Wagner said.

If a facility chooses to remain licensed after closing, which is the case in Mobridge and Madison, ownership could possibly be transferred without the loss of beds, he said. In other words, the community could still try to buy the empty building or build new and use the beds.