September 24, 2019, Maggie Flynn, Skilled Nursing News - 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 were acquired by Azria Health last week in a portfolio deal, according to the Associated Press and local media outlets.
The properties — Blue Hill Care Center in Blue Hill, Crestview Care Center in Milford, Mory’s Haven in Columbus, and Utica Community Care Center in Utica — 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.