In what appears to be a growing trend in long-term care closures in Iowa, four nursing facilities and two assisted living facilities have been placed in receivership with the state Department of Inspections and Appeals.

“DIA’s most important duty is to ensure that every resident is safe,” Director Larry Johnson Jr., said in a statement. “Facilities must abide by all regulations to ensure a safe and orderly closure and the State stepped in to ensure this happens.”

Jan. 23, the owner of Blue Care Homes notified the department that the company would not be able to meet the needs of its residents at the six long-term care facilities.

Iowa Health Care Association President and CEO Brent Willett told the McKnight’s Business Daily that 17 skilled nursing facilities in Iowa have closed in the past 12 months.

Fifteen of those 17 closures have been in rural parts of the state, but LeadingAge Iowa President and CEO Shannon Strickler noted that Iowa is a predominantly rural state. Professionals cite low pay and workforce challenges as driving forces behind the trend.

“Rural communities can certainly be more challenging, but all of my members, regardless of location, would say that staffing is their top concern,” Strickler said.  

She said the perfect storm of staffing shortages, increased costs and a shortfall in Medicaid reimbursement has created turmoil for all long-term care providers, especially those that may have entered the pandemic without a strong financial foundation. 

“If the state doesn’t address Medicaid reimbursement rates to cover the cost of care and help address the staffing challenges, I worry that we will see more closures or at the very least a reduction in access to services,” Strickler said.

According to Willett, Iowa’s SNF providers are incurring “ongoing and devastating financial losses” as Medicaid reimbursement rates have fallen to almost 20% of costs. That is, for every $1 spent to care for an Iowa Medicaid resident, the system currently reimburses providers 80 cents.

“This is an unsustainable trajectory, and the announcement of four more [nursing home] closures strongly underscores the underlying need for increased skilled nursing facility Medicaid funding now to stabilize the system and keep the doors open for rural Iowa facilities,” Willett said. “Fortunately, the Iowa Legislature is now in session, and based on Iowa’s history of investing in long-term care, I am encouraged the legislature will act to lift Medicaid rates and protect rural access to long-term care for Iowans.”

Residents of the closing properties need not worry about the next step, he said. Residents have 60 days to find new homes. 

“Regarding the residents of the providers in receivership, the state has worked to identify a private company who will ensure the safe care of those residents and work with families and other providers to arrange for transfer to other LTC providers,” Strickler said. 

Thursday, the courts appointed Michael F. Flanagan, in conjunction with Mission Health, as the temporary manager of the facilities. According to DIA, Flanagan and Mission Health immediately assumed control of operations.