After nearly an hour of discussion, the Hubbard County Board narrowly approved $62,673 toward the county-owned Heritage Living Center in 2020, or $5,222 monthly.

Through the Equitable Cost-Sharing for Publicly Owned Nursing Facilities (ECPN) program, the county’s contribution generates about $172,118 in nursing home revenue. ECPN was established in 2010 through Minnesota Statute. It is a mechanism for county- or city-owned nursing facilities to receive a federal match for their contributions to the operation of the nursing home.

Hubbard County has participated in ECPN since 2011, explained Heritage Administrator Kurt Hansen at the Nov. 5 meeting, “and been so graciously willing to support us as a publicly held nursing home. That’s been very much appreciated.”

Last month, Hansen asked county commissioners to consider contributing about $42,990 annually, or $3,582 per month, to the nursing facility. This figure was tied to a ECPN daily rate of $7.71 per day.

However, Hansen said the Heritage campus board met in late October, and recommended approving the maximum ECPN daily rate of $11.24 per day.

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The variable factor is “patient days,” Hansen explained. “The vast majority of our patient days through this program is through Medical Assistance (MA). … And then there is a handful of private pay residents.”

Hansen distributed a report estimating MA days in 2020 at 11,152 versus 4,161 in private pay days. The remaining patient days come from Medicare plans or third-party reimbursement private insurance, he said.

Competition for senior living options and a nursing shortage are taking a toll on Heritage Living Center finances.

“Where we’re at right now, we’ve got a bit of an uphill climb to create competitiveness for pay in a very tough labor market,” Hansen said, “and more specifically, being able to compete with area health care providers. There’s a lot of senior living options in our area these days and people are paying very competitively.”

The additional dollars created by ECPN would go toward pay increases and benefits, Hansen said.

In Minnesota, he noted there are 375 nursing facilities, of which 29 are government owned. Five other facilities are actively operated by a county. Overall, there are 47 facilities eligible for ECPN.

Competition for beds

County commissioner Dan Stacey asked County Auditor Kay Rave how the county’s ECPN contribution could impact the 2020 levy.

Rave said the county has not levied for the nursing home in the past, but statute would allow it.

Stacey then asked about Heritage’s occupancy, wondering why all of the beds aren’t filled.

Hansen replied 52 of 64 beds were occupied, saying it was a nice mix of residents. “We have some long-term residents that have been there more than 12 months, then we have our transitional care unit, which is short-stay. Those people traditionally stay 20 to 30 days, so it’s more of a rehab, get-better-and-go-home model,” he said.

Hansen pointed out they lost some long-term residents. “Historically, it takes awhile for those beds to get filled again. With all the alternatives available, that pickup isn’t as quick as it was even five or definitely 10 years ago.”

Other communities across the state are experiencing “a soft census,” Hansen continued.

County commissioner Char Christenson said this might be a trend for the next year or two, then it looks like there won’t be enough facilities anywhere due to baby boomers.

“If we stay at 52 beds, or even less, this next year, the potential of not being able to make the loan payment is great, so explain to the board how the payment will be made,” she said.

Hansen said the next interest payment of $165,000 is due in April, then a larger loan payment is due in October 2020. If the census stays at 52, “we’ll have to do some cost reductions,” he said.

Stacey asked how Greenwood Connections in Menahga is managing to be successful.

Hansen speculated that they have had a healthy census and the city went “all in” for the maximum ECPN.

Impact of traveling nurse pool

County commissioner David De La Hunt asked Hansen to explain how the traveling nurse pool has affected Heritage.

Heritage works with three different nursing pools for professional and certified nurses, Hansen said. “With that, there’s an increased per hour cost, along with some obligations to pay for housing for them. It gets to be almost $3 spent to $1 for normal, regular staffing.”

Over the past three or four months, Hansen said Heritage has incurred $75,000 per month over its budget for staffing. “It’s really compromised us, I think, financially. The benefit is that we’ve got staffing to handle up to 60 residents,” he said. “The good news is we have hired a few people.”

Hansen said they hope to sunset the traveling pool by the end of the year.

County commissioner Tom Krueger asked what privately held nursing homes are doing differently to be profitable.

Hansen supposed that they are “very, very careful with their staffing levels. Whereas we run a one-to-eight nurse to patient ratio, they might run one-to-10 or one-to-12.”

Building remodel finances

De La Hunt noted that when the renovations began at Heritage there was a county resolution to invest $1.5 million dollars. “Those funds have been exhausted,” he said. “As part of the resolution, when the new market tax credit ends, there’s a recommendation that the county contribute another $2 million to the refinance effort.”

De La Hunt expressed concern that, if nursing pool expenses continue, the county will need to supplement Heritage’s loan payments. “Why not go all in on this and get what you can from another source instead of it being 100 percent county money?”

The loss of beds during the remodel impacted revenue, De La Hunt reminded the board, adding the new facility has only been open for less than one year.

Hansen said the whole field of nursing home care is “tumultuous,” “with the increased scrutiny with surveying and compliance that we experienced, along with many, many homes across the state.”

He concluded, “We have to be nimble, make our adjustments and take care of our seniors.”

Assisted living regulations in 2021

Hansen noted there is a surplus of assisted living beds in the area.

Christenson remarked that “assisted living” is merely a term and is not regulated by the state. “However, it will become regulated in 2021 and no one knows, at this moment, what direction that will go,” she said.

Hansen said there is currently a public hearing for proposed assisted living regulations, which include things like licensing for housing directors to serving breakfast. He suspects that rates will likely rise due to the new requirements, “which is unfortunate. Assisted living had been, up until more recently, a more affordable senior care option for those who are more independent.”

Heritage Manor has 26 assisted living units. Heritage Cottages has 18 studios for memory care assisted living, and there is high demand, Hansen said.

Heritage is in the process of becoming VA certified. It is a time-consuming process, Hansen said.

ECPN motion

“I’d personally like to see the bleeding stopped,” Stacey said. He recommended that the board reach out to the Association of Minnesota Counties and profitable county-owned nursing homes for advice. “Right now, we’re just subsidizing all the time.”

Selling Heritage isn’t an option until 2022, De La Hunt said, “In the meantime, you have to do what you can to make this work.”

He made a motion to approve the maximum ECPN contribution.

Krueger expressed concern about the impact of a higher daily rate on private pay residents.

The motion passed 3-2, with Stacey and Krueger opposed.