Third SD nursing home to close in 2023 as Legislature studies long term care sustainability

A third South Dakota nursing home will close this year — citing short staff, rising costs and years of insufficient Medicaid reimbursement. More than 15 South Dakota nursing homes have closed since 2017.

The Bennett County Nursing Home in Martin operated at a loss of over $1.3 million in the first six months of 2023, CEO and Bennett County Hospital Administrator Michael Christensen wrote in an open letter to local newspaper The Lakota Times. The nursing home will close on Oct. 13.

The facility is part of the Bennett County Hospital system, which offers pharmaceutical, hospital, ambulance and home health services around the rural Pine Ridge Reservation area. The organization is building a new hospital, and Christensen said closing the nursing home will ensure the organization can survive and continue serving the community.

“We need to make a drastic change,” Christensen wrote, to avoid a situation that “could cause the entire organization to go under.”

The facility said it will help its 33 residents find new care “as close to home as possible” before it closes. The 48-bed facility had a 68.75% occupancy rate as of Aug. 3, 2022. The closest nursing homes to Martin include the White River Health Care Center, about 76 miles away, and the Oglala Sioux Lakota Nursing Home, about 50 miles away in Rushville, Nebraska. 

The Bennett County Nursing Home is ranked among the nation’s worst along with five other South Dakota facilities. It has been cited for three deficiencies in the last year and has been fined nearly $79,000 since 2021.

The nursing home has a staff turnover rate of 94.4% while the average state nursing home staff turnover rate is 52.9%. The nursing home has relied heavily on costly and temporary travel nurses, with only a few local nurses working at the facility. The letter also said nursing homes like Bennett County have seen expenses rise 1,064% since the beginning of the COVID-19 pandemic.

“Our costs have skyrocketed as we have to pay higher and higher rates for nurses from out of our state to care for our residents,” Christensen wrote.

Medicaid is a joint federal-state health insurance program for low-income people. South Dakota has historically been one of the lowest paying states for average Medicaid base rates. In 2019, South Dakota paid the lowest in the country for average Medicaid base payments at $125.51 per resident, per day — 62.6% of the national average.

About 97% of the Bennett County Nursing Home residents are covered by Medicaid, Christensen said. Christensen wrote that the organization feels “the agony” of the decision and is “heartbroken that South Dakota has chosen to set such low rates that have not kept up with the increasing business costs.”

“We are among the lowest reimbursed nursing homes in America’s lowest reimbursing state or territory,” Christensen wrote. “As of March 2023, 26,514 nursing homes in America and our state are paid more than we are by Medicaid to care for residents with the same needs. As much as 400% more.”

The Legislature approved an increase to a 100% Medicaid cost reimbursement rate for community support providers that rely on government funding, such as nursing homes, during the 2023 legislative session. But an industry expert has said the increase means the reimbursement will cover only about 92% of the cost for the next year, because service costs aren’t updated frequently enough to address inflation and other factors. The Legislature revisits and sets reimbursement rates each session.

And last session’s help has come too late for nursing homes like Bennett County, according to South Dakota Health Care Association Executive Director Mark Deak.

“As our state’s population continues to age in the years to come, we must make sure we are doing all we can to preserve access to long term care across our state,” Deak wrote in an emailed statement.

The U.S. Census Bureau estimates that more than 27% of South Dakota’s population will be over age 60 in seven years — an increase of 38% from 2012.

Rep. Chris Karr, R-Sioux Falls, introduced a bill last session that would have required a yearly updated cost report for nursing homes and other community service providers, and introduced a bill that would have required lawmakers to reimburse community service providers at 100% every year.

Both were rejected by the Senate, but lawmakers agreed to sign a letter of intent with the state Department of Social Services and the Governor’s Bureau of Finance and Management to annually update information to determine reimbursement rates for providers.

The Legislature is currently studying the long term care crisis in the state, planning to introduce legislation for the next legislative session (which begins in January) and recommendations to address problems — including much of what Bennett County cited as reasons for closing.