By Maggie Flynn | September
24, 2019
Just
about a week after changing hands, four skilled nursing facilities in Nebraska
announced plans to soon shut down amid financial difficulties that their new
owners blamed on a tough overall state budget landscape.
The
four facilities — Blue Hill Care Center in Blue Hill, Crestview Care Center in
Milford, Mory’s Haven in Columbus, and Utica Community Care Center in Utica —
were acquired by Azria Health last week in a portfolio deal, according to the Associated Press and local media outlets.
The
properties, which feature 205 licensed beds and employ about 204 workers, are
tentatively set to close November 21.
The
facilities had to shut their doors due to poor financial performance over
recent years, according to a press release from the Nebraska Health Care
Association (NHCA) — the local affiliate of national nursing home trade group
the American Health Care Association (AHCA).
“Unfortunately,
Nebraska’s fiscal landscape doesn’t make it viable for many long-term care
facilities to continue providing the high-quality care residents deserve,”
Carrie Ramaekers, the regional director of operations for Azria Health. “In
this case, we had to make the incredibly difficult decision to close four
buildings so that others are able to successfully stay open.”
Affected
residents, family members, and employees were notified Monday. The company is
currently working to find alternate options for residents and other employment
opportunities for the affected staffers, according to the release.
As of
Tuesday afternoon, Five Star Senior Living Inc. (Nasdaq: FVE) was listed as
having a 5% or greater direct ownership interest for all four SNFs — Blue Hill Care Center, Crestview Care Center, Morys Haven, and Utica Community Care Center — on Medicare.gov,
with no percentage provided.
Medicare.gov
also listed Senior Housing Properties Trust (Nasdaq: SNH) as having an 8%
indirect ownership interest in all four SNFs; ABP Acquisition, LLC had a 36%
indirect ownership interest on all four SNFs, according to the government.
Senior
Housing Properties Trust (Nasdaq: SNH) announced the sale of a 15-building SNF
portfolio on Monday for a total price of $8 million, as part of a
planned $900 million property sell-off; the company also has an ownership stake
in Five Star Senior Living, its top tenant.
Ten of
the SNFs in that portfolio were located in Nebraska, according a release from
Senior Housing Properties Trust announcing the transaction.
The
Newton, Mass.-based real estate investment trust (REIT) is planning to
eliminate all standalone SNF assets from its portfolio; some of those
facilities were underperforming and struggling, Senior Housing Properties Trust
COO Jennifer Francis said in May on an earnings call with
investors.
Messages
left with Senior Housing Properties Trust and Five Star Senior Living’s
investor relations lines were not returned as of press time.
Nebraska
has seen several SNF closures over the past few months, with Trillium Healthcare Group announcing a shutdown plan
for three SNFs in Crete, Fremont, and West Point in June.
The
state was also one of those affected by the defunct SNF company Skyline
Healthcare, with 21 SNFs placed in receivership after the Wood
Ridge, N.J.-based operator failed to make payroll amid a wider multi-state
collapse. One of those facilities ended up closing, and the receiver had also requested to close two other
properties.
Fifteen
nursing facilities have already closed in Nebraska this year, Heath Boddy, the
president and CEO of the NHCA, said in the Monday statement announcing the
closures of the four Azria SNFs.
“The
amount that long-term care providers receive from Nebraska Medicaid is
approximately $30 per person per day less than the average cost of providing
care to Nebraskans who need it — a model that no business can sustain,” Boddy
said.
Nebraska
is not the only state where long-term care providers have reported struggles in
dealing with low Medicaid rates. From Massachusetts to Illinois and Wisconsin, from South Dakota to Texas to the state of Washington, SNF providers have
reported significant shortfalls between the cost of caring for Medicaid
residents in their facilities and the amount their respective states reimburse
for them.
In Nebraska,
approximately 53% of certified nursing facility residents are covered by the
state’s Medicaid program, according to 2017 data from the Kaiser Family
Foundation.
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