Nursing Homes Are Closing Across Rural America, Scattering Residents

Harold Labrensz spent much of his 89-year life farming and ranching the rolling Dakota plains along the Missouri River. His family figured he would die there, too.

But late last year, the nursing home in Mobridge, S.D., that cared for Mr. Labrensz announced that it was shutting down after a rocky history of corporate buyouts, unpaid bills and financial ruin. It had become one of the many nursing homes across the country that have gone out of business in recent years as beds go empty, money troubles mount and more Americans seek to age in their own homes.

For Mr. Labrensz, though, the closure amounted to an eviction order from his hometown. His wife, Ramona, said she could not find any nursing home nearby to take him, and she could not help him if he took a fall at home. So one morning in late January, as a snowstorm whited out the prairie, Mr. Labrensz was loaded into the back of a small bus and sent off on a 220-mile road trip to a nursing home in North Dakota.

“He didn’t want to go,” said Mrs. Labrensz, 87, who made the trip with her husband. “When we stopped for gas, he said, ‘Turn this thing around.’ ”

More than 440 rural nursing homes have closed or merged over the last decade, according to the Cowles Research Group, which tracks long-term care, and each closure scattered patients like seeds in the wind. Instead of finding new care in their homes and communities, many end up at different nursing homes far from their families.

In remote communities like Mobridge, an old railroad town of 3,500 people, there are few choices for an aging population. Home health aides can be scarce and unaffordable to hire around the clock. The few senior-citizen apartments have waiting lists. Adult children have long since moved away to bigger cities.

“How often have you heard somebody say, ‘If I go to a nursing home, just shoot me?’” said Stephen Monroe, a researcher and author who tracks aging in America. “In the rural areas, you don’t have options. There are no alternatives.”

The relocations can be traumatic for older residents, and the separation creates agonizing complications for families. Relatives say they have to cut back visits to one day a week. They spend hours on the road to see their spouses and parents.

“Before, I could just drop by five days a week,” said the Rev. Justin Van Orman, a Lutheran pastor who moved back to Mobridge to be closer to his 79-year-old father, Robert. “He knew I was there.”

Not long after Mr. Van Orman’s father moved from Mobridge to a new nursing home about 50 miles away, Mr. Van Orman got a call saying his father had fallen out of bed. Mr. Van Orman had to decide: Should he upend his day to check on him, or wait and take the nursing home’s word that his father was O.K.?

Similar scenes are playing out in other heavily rural states. Five nursing homes closed in Nebraska last year, with more at risk of closing. Six shut down in Maine — a record, according to the Bangor Daily News.

Thirty-six rural nursing homes across the country have been forced to close in the last decade because they failed to meet health and safety standards. But far more have collapsed for financial reasons, including changing health care policies that now encourage people to choose independent and assisted living or stay in their own homes with help from caregivers.

Some nursing homes cannot find people to do the low-paying work of caring for frail residents. Others are losing money as their occupancy rates fall and more of their patients’ long-term care is covered by Medicaid, which in many states does not pay enough to keep the lights on.

South Dakota chips in less than any other state in the nation to pay for long-term care for residents on Medicaid, said Mark B. Deak, executive director of the South Dakota Health Care Association. He added that the state’s low payment level — a product of South Dakota’s fiscal conservatism and distrust of government-run health care — has now created a crisis.

Five South Dakota nursing homes have shut down in the past three years, and dozens more are losing money because the majority of their residents rely on Medicaid. At current reimbursement rates, nursing homes in the state lose about $58 a day for each resident on Medicaid, Mr. Deak said. It adds up to $66 million a year in losses statewide.

“The state has not held up its obligation to seniors,” Mr. Deak said. “How many more nursing homes closing is it going to take?”

Gov. Kristi Noem has proposed a 5 percent increase in the state’s Medicaid reimbursement rate. Mr. Deak said that would not be nearly enough to cover the losses.

The 89-bed Mobridge Care and Rehabilitation Center was rated overall as “below average” by Medicare’s Nursing Home Compare program, though for patient care, the home received four out of five stars in the agency’s assessment. The brown brick building was getting old, and had been damaged by a bad summer storm in 2018.

The nursing home had been part of a chain that switched hands and foundered financially, ultimately ending up in court-appointed receivership. In November, the receiver told a South Dakota judge that the chain’s operations were bleeding money, and that it needed to close down the two homes in the chain that were deepest in the red. Mobridge was one.

The South Dakota Department of Health did not object, and the judge agreed to the closure. Word began to spread through the home and through town: The residents had about two months to find somewhere else to go.

Black Hills Receiver, which had taken over operation of the nursing home, said in a November statement announcing the closure that it was working with residents, their families and employees “to make this transition as smooth as possible.” The company declined an interview request.

On paper, South Dakota and other rural states still have enough long-term care beds for people who need round-the-clock care. The problem is where they are. When a nursing home closes in a small town, the available beds are often so far away that elderly spouses cannot make the drive, and the transferred residents become cut off from the friends, church groups and relatives they have known all their lives.

Even the closest town can feel as though it is a world away when a blizzard rakes across the prairie and turns the two-lane road out of Mobridge into a billowing scarf of snow.

For six days this winter, Loretta Leonard could not make the 20-mile drive to see her husband, Dick, who is 91 and suffers from severe dementia, at his new nursing home. When he was living close by at the Mobridge home, she often visited him twice a day, sitting down at the piano to play the old polkas and hymns and Depression-era tunes their daughters sang growing up.

“He always knew me,” Ms. Leonard, 88, said. “Sometimes I wonder whether he knows me anymore.”

The part-time bus driver for the Mobridge nursing home began keeping a list as he dropped people at their new homes: “Residents Who Left.” One resident was moved to Aberdeen, 100 miles east. A husband and wife went 73 miles down Highway 12 to Ipswich. Roommates said goodbye. Fast friends landed in different homes. One person ended up in Nebraska.

“Like cattle,” said Nadine Alexander, a certified nursing assistant who worked at the Mobridge nursing home for 29 years. “They were just hauling them out.”

On the snowy day that Harold Labrensz left Mobridge for his new nursing home in North Dakota, not even the bus driver wanted to make the trip. For seven hours, they crept north along icy roads before arriving.

Mrs. Labrensz chose the facility because it was close to her son’s home, and she was able to find a small efficiency apartment just across the street from the nursing home. They spent 68 years together working their land, fishing and raising a family, and Mrs. Labrensz said she wanted to stay close.

“We spent our whole life together,” she said.

She was also close by when, three days after arriving in North Dakota, Mr. Labrensz died. The date was Jan. 31 — the same day that, 220 miles away, the Mobridge nursing home officially closed its doors.





Humana completes sale of long-term care insurance policy business KMG, at a loss of $790 million

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Humana has completed the sale of its wholly-owned subsidiary KMG America Corporation, in a transaction first announced in November 2017.

Humana has owned KMG since 2007.

KMG subsidiary, Kanawha Insurance Company, offers commercial, long-term care insurance policies and currently serves an estimated 29,300 policyholders.

Humana sold its shares in KMG for a reported $2.4 billion to HC2 Holdings, which includes Continental General Insurance Company, based in Texas.

In its second quarter earnings statement, Humana reported a $790 million loss on the sale of KMG, which is expected to close during the third quarter.

Humana said it would no longer have plans in the commercial long-term care insurance business.

Humana instead is closing on two transactions to acquire an at-home provider in Kindred at Home and Curo Health Services, which specializes in hospice care, according to the Q2 report.

Curo provides hospice care in 22 states. Humana and a consortium of TPG Capital and Welsh, Carson, Anderson & Stowe, purchased Curo for $1.4 billion, Humana announced in April.

Humana will have a 40 percent interest.

Also, this past June, Humana partnered with Walgreens Boots Alliance in a pilot to operate senior-focused primary care clinics inside of two drug stores in the Kansas City, Missouri area.

Revenue remained strong for the insurer, which specializes in Medicare Advantage plans. Its MA business in Q2 realized both growth and lower utilization.

While revenue remained strong, Humana’s net income dropped to a reported $684 million this year compared to $1.8 billion last year.

The insurer benefitted from a lower tax rate year-over-year as a result of the tax reform law and negatively felt the return of health insurance tax in 2018.

“Our strong 2018 financial results are testimony to the underlying improvement in our operating metrics, like Net Promoter Score, digital self-service utilization and call transfer reduction, and to the growing effectiveness of our national and local clinical programs,” said Bruce D. Broussard, Humana’s CEO and president. “Also, we took another large step this quarter in helping our members, especially those living with chronic conditions, by beginning the integration of important clinical services through our investments in Kindred at Home and Curo, and through our partnership with Walgreens.”


Editorial: Illinois’ home health care hustle

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For those who are ailing but hope to stay out of nursing homes or hospitals — and who wouldn’t? — there’s an increasingly popular alternative: home health care providers. These are doctors, nurses and other medical staffers who visit patients at home, with the goal of treating chronic conditions and keeping people healthy enough to avoid costly long-term stays in more intensive facilities. That saves patients, and the health care system, money.

But, as with all things in the health field, there are plenty of caveats for potential customers.

Illinois is a field of dreams for home health care fraud, the Tribune’s Michael J. Berens reports. Why? Because state public health regulators doled out too many home health licenses too fast in the past decade. The state allowed almost anyone with a $25 licensing fee to open a home health care business but fails to provide meaningful oversight on hundreds of operators. You can find Berens’ full report at

The upshot of lax oversight: In the last five years, area home health agencies have improperly collected at least $104 million in Medicare dollars, Berens reports. (Most patients in home health care are covered by Medicare.) Often the home health businesses did that by falsely certifying that Medicare patients were homebound and in need of nursing care.

But the problem here isn’t measured only in Medicare dollars wasted. It’s measured in patients at risk or harmed. Thousands of patients have been subjected to unwarranted procedures, therapies and tests; some were prescribed unneeded and powerful drugs, the Tribune analysis concludes.

So what can patients, and their families, do to protect themselves? How can someone in Illinois — or her family — shop smartly for a home health care provider? It’s not easy, but here are a few tips:

  • First, you can check a federal website that offers star ratings for home health providers at
  • Then, be vigilant. Make sure a home health care agency coordinates care with your existing primary physician. If a home health care company makes lots of visits but does little more than check your blood pressure, be wary.
  • Check your monthly Medicare statement to monitor services that a home health care company claims to have provided.

On average, some 10,000 Americans turn 65 every day. That means the market for home health will likely continue to surge, placing greater demands on regulators.

In 2013, the federal government banned Illinois from issuing new licenses. The feds said that fraud was rampant, driven by too many home health companies for too few patients. Still, Cook County has more home health companies than the entire state of New York.

Many companies provide excellent care for their customers. The industry’s trade association, the Illinois Homecare and Hospice Council, represents about 160 providers (among the 750 or so licensed in the state).

“We support the moratorium,” Executive Director Sara Ratcliffe told the Tribune. “We want more enforcement.”

So do we. This field of dreams needs to be weeded of fraudsters. At least 357 active home health companies in the Chicago area have been linked to potential financial fraud by federal investigators but never charged.

That’s a daunting fact for families and patients seeking home health care. The state could help prospective patients by posting disciplinary and enforcement actions on the web. More sunshine — readily available information on providers’ performance and disciplinary records — would help them make a wise choice.


Hospital groups to sue CMS over $1.6 billion cut to 340B payments

Credit: <a href="">Matthew Bisanz</a>.

The final rule will also allow for higher payment when Medicare beneficiaries receive certain procedures in outpatient departments.

Several groups representing U.S. hospitals on Wednesday said they plan to sue the Centers for Medicare and Medicaid Services over a hospital outpatient prospective payment system final rule released Wednesday that reduces what hospitals are paid under the 340B drug program.

The rule lowers the cost of prescription drugs for seniors and other Medicare beneficiaries by reducing the payment rate to hospitals for certain Medicare Part B drugs purchased through the 340B program. The existing rule would have paid hospitals 6 percent above the sale price of drugs, but the final rule instead pays hospitals 22.5 percent less than sale prices, amounting to a $1.6 billion cut.

The American Hospital AssociationAssociation of American Medical Collegesand America’s Essential Hospitals said they will seek litigation to prevent the cuts.

“CMS’s decision in today’s rule to cut Medicare payments to hospitals for drugs covered under the 340B program will dramatically threaten access to health care for many patients, including uninsured and other vulnerable populations,” AHA Executive Vice President Tom Nickels said in a statement. “We strongly urge CMS to abandon its misguided 340B rule, and instead take direct action to halt the unchecked, unsustainable increases in the cost of drugs.”

America’s Essential Hospitals CEO Bruce Siegel said the organization saw no reasonable rationale for diverting Medicare Part B reimbursement from hospitals in the 340B drug pricing program that are in the greatest need of support to providers not eligible for 340B discounts. CMS has no evidence that the policy will combat rising drug prices, he said.

“Congress clearly intended that the 340B program help hospitals that care for many vulnerable patients; this new policy subverts that goal,” Siegel said. “Essential hospitals operate with an average margin less than half that of other hospitals and depend on 340B program savings to stretch resources for patient care and community services. Given their fragile financial position, essential hospitals will not weather this policy’s 27 percent cut to Part B drug payments without scaling back services or jobs.”

340B Health said the rule is a backdoor effort to undermine an important drug discount program.

“Responding to a survey earlier this year, 340B hospitals were unanimous in saying implementation of the CMS rule would cause them to cut back services. For example, Genesis Healthcare System in Zanesville, Ohio, estimates a loss of $3 million in Medicare payments could force it to cancel critical services such as substance abuse treatment, cancer treatment, and behavioral health programs.The MetroHealth System Cancer Center in Cleveland, Ohio, estimates an $8 million loss would raise patients’ costs and reduce access to needed services including transportation and care navigation that are supported by 340B savings,” said 340B Health CEO Ted Slafsky.

However, the AIR340B Coalition said it would continue to advocate for regulatory action to better align the program with its original intent of helping vulnerable patients.

“We applaud the Administration for taking action to help address one aspect of the 340B program that has been leading to higher costs for Medicare and its beneficiaries,” the AIR340B Coalition said.

Areas of change it supports include clearly defining a 340B eligible patient, examination of hospital and satellite clinic eligibility criteria, and a more rational and legally supportable policy on contract pharmacy arrangements.

CMS said the savings will be reallocated equally to all hospitals paid under the hospital outpatient prospective payment system. Children’s hospitals, certain cancer hospitals, and rural sole community hospitals will be excluded from these drug payment reductions.

CMS will work with Congress for additional considerations on 340B for safety net hospitals, said CMS Administrator Seema Verma.

Consumers would save an estimated $320 million in copayments in 2018 under the new payment rule that gives Medicare beneficiaries the benefit of discounts hospitals receive under the 340B program, according to Verma.

“As part of the president’s priority to lower the cost of prescription drugs, Medicare is taking steps to lower the costs Medicare patients pay for certain drugs in the hospital outpatient setting,” Verma said.

The final rule will also allow outpatient payment to be made when Medicare beneficiaries receive certain procedures in a lower cost setting, the outpatient department. The new availability of the higher OPPS payment applies to six procedures, including total knee replacements, a common and costly Medicare surgical procedure, CMS said.

Starting in January 2018, Medicare beneficiaries undergoing any of the six procedures can opt to have them performed in a lower cost setting when a clinician believes such a setting is appropriate.

Additionally, the final rule provides relief to rural hospitals by placing a two-year moratorium on the direct physician supervision requirements for rural hospitals and critical access hospitals.

“CMS understands the importance of strengthening access to care, especially in rural areas,” Verma said. “This policy helps to ensure access to outpatient therapeutic services for seniors living in rural communities and provides regulatory relief to America’s rural hospitals.”

In a home health prospective payment system final rule, CMS is not finalizing the home health groupings model and will take additional time to further engage with stakeholders.

Medicare proposed changes would cut home health reimbursement

Home health agencies could see decreases of $80 million in 2017 and $950 million in 2019.

Home health providers object to the Centers for Medicare and Medicaid Services’ proposed rule that would reduce Medicare payments by 0.4 percent, or $80 million, in 2018, and up to  $950 million in 2019.

The Partnership for Quality Home Healthcare is especially concerned about a groupings model proposal starting in 2019 that  would change the unit of payment from 60-day episodes of care to 30-day periods of care and places patients in payment groups based on how they fit in six clinical categories.

“CMS is proposing a major reform to home health reimbursement without having worked collaboratively with industry partners like the Partnership and we expect to be included in payment reform development going forward,” said Partnership Chairman Keith Myers. “We question whether CMS has the unilateral authority to make such a proposed change without action by Congress.”

CMS said the six clinical groups used to categorize 30-day periods of care are based on the patient’s primary reason for home healthcare.

The new model could result in a $950 million Medicare payment cuts for home health providers in 2019 if it is implemented in a non-budget neutral manner, according to Home Health Care News. If implemented in a partially-budget-neutral manner, it could reduce payments by $480 million, the report said.

CMS is not proposing a revision to the split percentage payment approach in the change to a 30-day period. However, the agency said it is proposing to phase-out of the split percentage payment approach in the future and is soliciting feedback now.

For 2018, Medicare payments to home health agencies would be reduced by 0.4 percent, or $80 million, based on the proposed policies, CMS projects.

The $80 million decrease reflects the effects of a $190 million increase from a 1 percent home health payment update, a $170 million decrease from a -0.97 percent adjustment to the 60-day episode payment rate to account for nominal case-mix growth, and a $100 million decrease due to the sunset of the rural add-on provision.

The Medicare Access and CHIP Reauthorization Act, or MACRA extended until Jan. 1, 2018 the rural add-on, which increased by 3 percent the payment amount otherwise made for home health services in a rural area.

Additionally, the proposed rule for 2018 refines the home health value-based purchasing model. It revises the applicable measure for receiving performance scores for any of the home health consumer assessment of healthcare providers and systems, or HHCAHPS.

The Partnership for Quality Home Health Care said it plans to release an analysis of the proposed payment model and its impacts on home health delivery.

The coalition is concerned that Affordable Care Act directives for high-risk beneficiaries to receive access to home health services would result in disproportionate cuts to provide the care if the payments are implemented as drafted.

Tuesday’s home health rule is among several proposals that reflect a broader strategy by CMS to relieve regulatory burdens for providers, support the patient-doctor relationship in healthcare and promote transparency, flexibility, and innovation in the delivery of care, CMS said.

“CMS is committed to helping patients and their doctors make better decisions about their healthcare choices,” said CMS Administrator Seema Verma. “We’re redesigning the payment system to be more responsive to patients’ needs and to improve outcomes. The new payment system aims to encourage innovation and collaboration and to incentivize home health providers to meet or exceed industry quality standards.”

CHS sells controlling interest in home health business to drive down debt

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Franklin, Tenn.-based Community Health Systems has completed the sale of a majority interest in CHS Home Health to Louisville, Ky.-based Almost Family, a provider of home health nursing services.

CHS announced plans in October to sell a controlling interest in its home health business to Almost Family. Under the agreement, Almost Family will pay $128 million, subject to a working capital adjustment, for an 80 percent equity interest in CHS Home Health.

The home health deal is one of several transactions CHS has in the works. During a third-quarter earnings call in November, CHS Chairman and CEO Wayne T. Smith said the company was working on seven divestiture transactions.

CHS released details of two more of its planned transactions in late 2016. In November, the company signed a $425 million definitive agreement to sell Spokane, Wash.-based Rockwood Health System to Tacoma, Wash.-based MultiCare. That transaction is expected to close in the first quarter of 2017. In December, CHS signed a definitive agreement to sell Yakima (Wash.) Regional Medical Center & Cardiac Center and Toppenish (Wash.) Community Hospital to Sunnyside (Wash.) Community Hospital & Clinics for approximately $45 million. That deal is expected to close in the second quarter of this year.

CHS will use the net proceeds of the sale of its home health division and the hospitals to pay down its debts.

Nonacute Care: The New Frontier

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What happens outside the hospital is increasingly important to success, so healthcare leaders need to influence or control care across the continuum.

If you’re running a hospital, one irony in the transformation toward value in healthcare is that your future success will be determined by care decisions that take place largely outside your four walls. If you’re running a health system with a variety of care sites and business entities other than acute care, the hospital’s importance is critical, but its place at the top of the healthcare economic chain is in jeopardy.

Certainly, the hospital is the most expensive site of care, so hospital care is still critically important in a business sense, no matter the payment model. But if it’s true that demonstrating value in healthcare will ensure long-term success—a notion that is frustratingly still debatable—nonacute care is where the action is.

For the purposes of developing and executing strategy, one has to assume that healthcare eventually will conform to the laws of economics—that is, that higher costs will discourage consumption at some level. That means delivering value is a worthy goal in itself despite the short-term financial pain it will cause—never mind the moral imperative to efficiently spend limited healthcare dollars.

So no longer can hospitals exist in an ivory tower of fee-for-service. Unquestionably, outcomes are becoming a bigger part of the reimbursement calculus, which means hospitals and health systems need a strategy to ensure their long-term relevance. They can do that as the main cog in the value chain, shepherding the healthcare experience, a preferable position; but physicians, health plans, and others are also vying for that role. Even if hospitals or health systems can engineer such a leadership role, acute care is high cost and to be discouraged when possible.

Healthcare adds 33,000 jobs in September, though diagnostic labs shed staff

Healthcare businesses added 33,000 jobs in September, the U.S. Department of Labor’s Bureau of Labor Statistics announced on Friday, as the sector continues to be one of the biggest drivers of American jobs.

Overall, the U.S. economy added 156,000 jobs in the month, and the unemployment rate held at 5 percent.

Ambulatory services added 23,900 jobs in the month while hospitals added 6,900 positions. Only medical and diagnostic laboratories lost jobs in the month, shedding 400.

Overall, healthcare has added 445,000 jobs in the past 12 months. September’s gains more than double the 14,000 jobs the sector added in August.

Here’s the seasonally adjusted breakdown for the healthcare sector. All numbers are in thousands:

Fake owner pleads guilty in $4.2M home health fraud scheme

  • Ramon Collado Gonzalez of Miami, Florida pleaded guilty Monday to acting as the straw owner of Golden Home Health Care as part of a $4.2 million home healthcare fraud scheme, the U.S. Attorney’s Office for the Southern District of Florida announced Tuesday.
  • Gonzalez admitted he was recruited to cover for the real owners, Mildrey Gonzalez and Milka Alfaro, who were charged separately for their alleged roles.
  • Gonzalez signed documents for the submission of false Medicare claims in exchange for monthly payments and periodic bonuses, the press release states.