More Massachusetts Nursing Home Closures Expected

NEEDHAM — In increasing numbers, senior citizens in Massachusetts are turning to assisted living or living at home with assistance, and those choices are exacerbating problems in the nursing home industry. "That is 54 percent of government in 25 minutes or less," Health and Human Services Secretary Marylou Sudders said as she wrapped up her testimony at Needham Town Hall on the Baker administration's $23.2 billion budget for the secretariat.

"There will be additional closures," Health and Human Services Secretary Marylou Sudders told lawmakers at a fiscal 2020 budget hearing.

One in four nursing homes have occupancy rates of 80 percent or less, which she said is "not sustainable," and the average occupancy rate is 86 percent.

As the state's elderly population expands, state officials need to rethink nursing home rates and come up with a long-term plan while advancing a short-term $25 million package to stabilize nursing homes, Sudders said.

Demographic trends in Massachusetts mean more and more residents are facing choices about their care as they age, or the care of loved ones. Acting Elder Affairs Secretary Robin Lipson told state lawmakers that people are outliving their ability to drive by seven to 10 years, creating mobility challenges and concerns about isolation. And Sudders said the average life expectancy in Massachusetts rose to 80 years and eight months in 2016, bucking national trends.

Meantime, there's been explosive growth in assisted living, Sudders said, as older consumers take advantage of an alternative to nursing homes.

At a Joint Ways and Means Committee hearing on the fiscal 2020 budget on Monday, Rep. David Muradian of Grafton reminded Sudders that, in addition to the role they plan in caregiving, nursing homes are also major employers in the state and protecting the jobs of nursing home workers is a consideration for legislators.

Changes in the way Medicare is covering nursing home care are also having impacts, Sudders said, creating a "perfect storm" in the industry.

In his testimony, MassHealth Director Daniel Tsai said Medicare policy changes have decreased the use of nursing homes by 25 percent and reduced funding by $300 million in Massachusetts since 2011. Additional reimbursement changes are expected in October, Tsai said.

MassHealth increased its total nursing home spending from 2015 to 2017 by 1.4 percent even as the number of MassHealth members in nursing homes decreased by 3.2 percent. And in October 2018, MassHealth added $25 million more in annual funding to support nursing homes and maintained $38.3 million in funding for direct care workers.

However, Tsai warned that long-term reforms are needed.

"The current structure of the nursing home industry is not sustainable," he testified. "Long-term reforms are required to solve these challenges; increased MassHealth funding alone is not enough."

Regulatory changes have also been made to assist the nursing home industry, Sudders said, mentioning changes to streamline the closure process and a change that enables homes to use empty wings for other services.