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Colorado Springs nursing home latest to close their doors due to staffing shortages, high costs

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Posted at 8:42 PM, Aug 17, 2022

COLORADO SPRINGS — A Colorado Springs nursing home is the latest in the state to close its doors.

Parkmoor Village Healthcare, a long-term-care facility in Colorado Springs, plans to shut down later this month. The management company says the facility owners and operators made the hard decision based on pandemic-related staff shortages, increased supply costs, and insufficient government program reimbursement.

Colorado Health Care Association makes up 90 percent of the nursing homes in the state. The organization says Parkmoor Village Healthcare is the eleventh in the state to close since the COVID-19 pandemic began two years ago.

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"I am with my grandma who has cancer," said Melissa Hall, Colorado Springs resident.

Her grandmother was diagnosed with cancer before the pandemic. She is currently hospitalized at UCHealth Memorial Hospital Central.

"We are waiting on some information to see how progressed it is," said Hall.

They're trying to figure out the best steps forward which may include moving her into a nursing home.

"It comes down to those skilled care facilities how good are they, who is working there, what is happening, what is taking place," said Hall.

Many families are considering alternative options to nursing homes, including smaller care facilities or becoming caregivers themselves.

"Since COVID-19 began, we've seen an uptick of nursing homes closing in the state and it is two factored but it is based on the factor that we do not have enough workforce to serve the needs of Coloradans who need nursing home care," said Doug Farmer, President and CEO of Colorado Health Care Association.

During the pandemic, Farmer says many caregivers had to stay home to care for their school aged children. When they returned to the workforce, they weren't going back to full time employment rather temporary employment.

"As a result of that, the cost of that we've seen to employ nurses, CNAs, and LPNs, has gone up dramatically. When we have to use a staffing agency to find one of those frontline nursing staff members, we are often times paying 100 to 400 percent more than the average rate for a normal full time staff member to entice them to come to work. Those are not sustainable numbers," said Farmer.

Besides staffing shortages, facilities are also dealing with fewer residents in facilities. Prior to the pandemic, Farmer says the average occupancy was about 80 percent on any given day, but it's dropped to about 70 percent.

"That is about 200 million dollars in revenue that has disappeared from long term care. That is definitely having an impact on the ability to stay open," said Farmer.

Currently, Farmer is worried about 76 nursing homes in the state that sit below 70 percent occupancy. Of that number, 6 are in Colorado Springs, 2 in Pueblo, and 1 in both Salida and Canon City. While there are fewer residents, it doesn't mean lower operating costs.

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"The heat bill is still the same, the AC bill is still the same, the janitorial bill is still the same. There may be some decrease in cost, you not need many staff, but there are a lot of expenses that still remain. The inflation that is impacting all of us is also impacting these providers. Cost of food is increasing, cost of staff is increasing, and we have really good infection prevention practices following COVID, but they often require separation of residents and staff which requires how you deliver services — in a more costly way," said Bonnie Silva, Colorado Department of Health Care Policy and Financing.

While there are a few contributing factors to recent closures, the department says they are working on solutions to both stabilize and transform the industry.

"Our goal has always been to make sure that people who receive care, receive high level of care. We recognize that there have been some rapid shifts in this industry, and have worked hard to infuse additional dollars to provide some stabilization while we're also working with that industry to drive toward a more transformational long term solution," said Silva. "To date, over $180 million have been paid to Colorado nursing facilities during the pandemic — $44 million toward Medicaid that we provided over the course of three payments. $120 million was from federal aid between 2020 and 2021. Last year we worked with the legislature to authorize an additional $27 million toward Medicaid providers. We looked at providers that were serving people with more complex needs, incentives to serve those people."

The Colorado Health Care Association says one of the biggest issues that need addressed is the medicaid reimbursement rates. They say 70 percent of nursing home stays are reimbursed by medicaid. From 2020-2021 rates increased by 2 percent overall, but it isn't enough to sustain the industry.

"The amount paid out to nursing staff increased by 20 percent and in that same timeframe the medicaid reimbursement rate increased only two percent across the board in Colorado. With employees being the largest cost of nursing homes, that difference just isn't sustainable, and that is why we are starting to see more and more nursing homes close," said Farmer.

However, the state says they can't do much when it comes to rates since they are already written in state statute.

"It requires a three percent increase year over year, and for the past decade that has worked out amazing. They had a guaranteed three percent increase year over year, and no other provider in medicaid gets a guaranteed increase. They have fought hard to keep that reimbursement in statute, but now we are in a time where we have increases in cost, decreases in revenue, and that reimbursement that has served them so well is no longer serving them. They are saying our costs our outpacing what you're paying us and I have zero flexibility to do anything different because how I pay them is outlined in statute," said Silva.

They are continuing to work on long term solutions, but couldn't go too much into detail just yet.