San Juan Assisted Living

San Juan Assisted Living was at risk of closure, according to owner Jim Roe, before a new contract was worked out with the state in late June that provides higher funding for Medicaid clients. 

San Juan Assisted Living worked out a two-year contract with the state that its owner says will allow the facility to stay open — at least for now.

Owner Jim Roe said last week that facility had been in danger of closing and displacing 46 residents due to state Medicaid reimbursements failing to keep up with costs to run it. But the new contract with the state Department of Social and Health Services, which administers the state’s Medicaid program, increased the daily rate per resident on Medicaid. Medicaid clients represent 44 of the 46 at the facility, Roe said.

As of July, the facility is now receiving $174 a day per resident, up from $145, Roe said. That will allow the facility to net an extra $30,000 a month, bringing it closer to breaking even.

The facility sent a press release to the Skagit Valley Herald on June 26 that said the funding situation was so dire that the care center faced “imminent closure” of the care center. Roe also owns Rosario Assisted Living and Fidalgo Care Center in Anacortes, and Shuskan Health Care Center in Bellingham.

Roe said last week that all four facilities will remain open, but that questions remain about the long-term viability of state-funded care centers.

“Statewide, all nursing homes and assisted living facilities are underfunded,” he said.

Across all four of his facilities, Roe said he lost $1.4 million on Medicaid patients in 2018 when compared to what a private-pay client would pay.

As for San Juan Assisted Living, Roe said it probably has the highest rate of Medicaid clients of any assisted living facility in Washington.

“And we’re proud of that,” he said.

Some facilities do not accept any Medicaid clients. Others, such as Country Meadow Village in Sedro-Woolley, serve a mix of Medicaid and not-Medicaid clients, said Resident Care Director and LPN Caroline Davis.

“You can’t have everybody in your building on Medicaid because then you can’t keep the doors open,” Davis said. “There’s a huge need for Medicaid beds in the county.”

Roe said stagnating Medicaid rates combined with rising wages and cost of living have created a crisis. The state pays $220 a day for residents in skilled nursing homes, where patients need more care, he said. The rate is $326 in Oregon.

Recently, San Juan Assisted Living was converted from a nursing home to an assisted living facility as part of a state pilot program. Assisted living facilities are cheaper to operate than a nursing home, Roe said, but Anacortes is feeling other economic pressures, as well. The cost of living is higher, and caregivers often commute in from surrounding areas, leading to a demand for higher wages, he said.

“(The state) saved money, and we’re asking to have our costs met,” Roe said.

DSHS Assistant Secretary Bill Moss said in a statement that the two-year budget passed this spring by the Legislature included $29 million for an increase in Medicaid reimbursement rates to assisted living facilities, a 7% increase over two years. The budget also included a $10 million incentive for nursing homes that meet quality measures.

Factors such as reduced reimbursement rates, lower occupancy and a shift to home- and community-based services have contributed to nursing home closures, according to the statement.

A separate statement notes that nursing home closures are not new.

“From 2003 to 2007 we had more than 27 facilities close,” the statement says. “From 2014 to present we have had 16 facilities close. We currently have five closures pending for a total of 21 closures over the past five and a half years. It should be noted that four of the 21 facilities converted to assisted living facilities so the facility will continue to be a residential resource in the community.”

Should a Medicaid-accepting facility close, DSHS must find those residents homes, DSHS Media Relations Manager Chris Wright said. But options can be slim with other facilities offering limited space for Medicaid residents.

“There’s just a shortage of places that allow Medicaid nowadays,” said Amy Stroud, executive director of Birchview Memory Care Community in Sedro-Woolley. “A lot of private companies go to private-pay only.”

Although she doesn’t see her organization discontinuing its acceptance of Medicaid patients, the fact that other companies don’t accept them puts a bigger burden on those that do.

“If everyone took a piece of the pie and didn’t just exclude accepting Medicaid, it would be a little easier,” she said.

The Washington Health Care Association, which is a nonprofit organization representing over 400 assisted living and skilled nursing facilities, made the issue of Medicaid reimbursement its top priority for the 2019 legislative session, according to its website.

“Medicaid reimbursement rates are at this time wholly inadequate,” President and CEO Robin Dale said in an interview.

The number of facilities that accept Medicaid has been decreasing in recent years, he said.

“If you have a system that is paying approximately $75 a day to care for an assisted living elderly resident and you’re expecting that to provide food, shelter, nursing care, 24-hour security and you’re only going to pay $75 dollars for it, don’t be surprised when providers decide to not take you up on that offer,” Dale said.

During the 2019 legislative session, his organization hoped to increase the funding from 65 percent optimal funding to 75 percent, he said.

That didn’t happen.

“At this point, if you’re still saying you want to have a Medicaid population in assisted living, then pay for it,” Dale said of the state.

The Aging and Long-Term Support Administration at DSHS is set to meet this summer with the nursing home associations, the long-term care ombudsman, and SEIU Local 775, to discuss staffing requirements and the nursing home reimbursement rate in preparation for the upcoming legislative session, Moss said.

In the meantime, Roe said he is looking for options to extend his line of credit.

“We’re close enough we’ll be able to stay in operations,” he said. “Hopefully that’s good enough for the bank.”

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