What is the future of Connecticut nursing homes? Industry is under pressure

For many Connecticut nursing homes, the next few years will be about survival.

Along with unprecedented staffing shortages and less-than-ideal occupancy rates, nursing home operators are also facing a state Department of Social Services that is intent on “right-sizing” the industry by directing money away from nursing homes and toward home care programs.

And state legislators, some of whom heard terrifying stories about substandard care in facilities, have proposed laws that would open nursing homes’ books to more scrutiny and increase the mandatory number of hours residents have with their caretakers.

When nursing home operators recently asked the state for $193 million more to meet their mission, they were rebuffed, and lawmakers instead raised questions about how several infusions of money during the pandemic were spent.

About 20,000 people live in Connecticut’s approximately 200 nursing homes. And as the state’s population of older adults continues to grow and show increased interest in home-based care, changes in the nursing home industry appear inevitable.

“This is a time of transition in the nursing home industry, not only because of the pandemic but also the changes in attitudes about nursing homes,” said Deidre Gifford, the state’s former social services commissioner, now head of the Office of Health Strategy. “Somebody who may have a decade or so ago, or even just before the pandemic, been admitted to a nursing home is now figuring out how to remain in place at home.”

“Every year, the state of Connecticut spends $1.12 billion on our state’s nursing homes when we look at the whole Medicaid program,” said Sen. Matthew Lesser, co-chairman of the Human Services Committee. “It is important with that funding, which pays for 70% of the nursing home residents who are receiving care in the state, that we have certain things. One is transparency, where we know where that money is going; two, that we have adequate staffing; and then three, that we are taking care of our most vulnerable.”

Lawmakers have rolled out a series of sweeping bills this year with the aim of improving care in nursing homes. The proposals would raise the mandatory minimum staffing hours in nursing homes, require more transparency in the way facility operators spend taxpayer money, mandate that owners provide air conditioning in resident rooms and prompt broader disclosures about private equity investment in long-term care, among other changes.

Industry leaders have cautioned against cutting funding from nursing homes as they emerge from the pandemic.

“We have been urging the DSS and state policymakers that they must take a very careful and cautious approach about prematurely and aggressively accelerating their rebalancing objectives,” said Matthew Barrett, the president and CEO of the Connecticut Association of Health Care Facilities.

“We think being too aggressive is dangerous, and it could lead to issues of impeding access to high-quality skilled nursing facility care. If too many homes close, beds come out of the system, and the consequences of that will be harmful to the very population that we want to be sure are cared for,” Barrett said.

He said the state needs to view the system as a whole and not fund one form of care over another.

“We need both, and that’s why we say Connecticut shouldn’t just throw one ball in the air to aggressively enhance and improve the infrastructure of home and community-based services,” Barrett said. “We also have to keep the other ball in the air too by still investing and ensuring that we have a strong supply of high quality skilled nursing facility care.”

Legislators’ focus on nursing homes also comes in the wake of revelations that Athena Health Care Systems, one of Connecticut’s largest long-term care providers, failed to pay temporary employment agencies and health insurance premiums for its staff and faces lawsuits, consent orders and a $1.75 million fine.

“I believe we are in crisis not just in my district, not just in Connecticut, but across the nation,” said Rep. Jane Garibay, co-chair of the legislature’s Aging Committee.

Problems with care in nursing homes have been going on for years, she said. “This is not new, and it’s not just because of COVID. COVID shined a light on what is happening, but it is our responsibility to change it.”

Inside the nursing homes: More empty beds, fewer workers

Bill White’s family owned the Beechwood Post-Acute & Transitional Care Center in New London for 32 years — until last summer, when White sold it.

“I have a five-star nursing home with an outstanding reputation that still hasn’t had a single COVID death. It’s family owned, and I still couldn’t hire anybody,” White said last summer. “[I] had to pay people $300 more a shift just to fill them.”

“If I can’t get people, I’m thinking, ‘Holy crap, what are others doing?’” he said.

White said the timing was right to get out of the industry, and he suspects others will be following suit.

“What I’m seeing since the pandemic is overall occupancy has dropped, it’s probably in the low 80 [percent range] now,” he said in an interview on his last day as a nursing home owner.

“But the spread in occupancy between the haves and have nots is much more dramatic. There are homes that are at 90% capacity and others under 60%,” White said. “So I think maybe people are thinking more about where they go from here than they ever did before.”

In February 2023, the statewide occupancy for nursing homes was about 83%, below the 90% optimal occupancy rate some legislators are calling for and the industry reported just before the pandemic hit in 2020.

Even as the total number of beds in nursing homes decreased because some facilities closed during the pandemic, the number of available beds has increased. In February 2020, there were 3,112 open beds in the state’s then-210 nursing homes. Roughly two years later, in March 2022, that number reached 5,017 open beds in 205 nursing homes.

As of late February, there were about 3,800 open beds in about 200 nursing homes, according to state data.

Some nursing home residents say care has been inadequate in recent years. Many facilities saw a drop in staff when the pandemic began and haven’t recovered since.

John Bilsano, 57, said residents at Apple Rehab Shelton Lakes, where he’s lived for three years, are waiting longer for assistance because the building is short staffed.

“It hurts me to see them wait as long as they do for help,” he said. “When they put their call bell on, it takes almost a half hour, 45 minutes, for [workers] to answer.

“I feel bad. Let’s say they need to go to the bathroom or they’re on a bed pan and they need to be changed, they have to sit in their diaper … for that long until somebody comes to change them.”

Bilsano said some residents don’t make it out of bed for activities until the afternoon.

“They’re lucky they get up for lunch,” he said.

Representatives for Apple Rehab could not be reached for comment.

The problems reached the state Capitol this year. Several residents and their loved ones testified and wrote to lawmakers about the situation inside nursing homes.

“I have personally experienced the problems with short-handed staff and personnel … when both my mother and father were in the nursing home,” Joseph Swart wrote to legislators. “There was one time I went there only to find my mother lying on the bathroom floor. When they finally got her out of there and back in bed, I asked her why she was on the floor, and she told me she had rang for the nurse, but it took them so long to come in she decided to go to the bathroom on her own and she tripped and fell.

“I also witnessed that the meals … were often cold when they should have been hot.”

Cynthia Hadden, of South Windsor, described the conditions her father lived with during his two years in a nursing home.

“The lack of staffing did not allow for quality care as time with each resident is not sufficient,” she said. “His phone was often placed in a hurry where he could not reach it. Water was outside of his reach; meals were left on a table without assistance, becoming cold. His diaper hanging down between his knees, obviously soaked for hours.

“A person with dementia does not remember what the call bell is for, therefore someone needs to be checking on residents consistently and timely. When staffing levels are low, the residents suffer.”

Lurlette Newell, a certified nursing assistant at the Westside Care Center in Manchester, told lawmakers that every year, the ratio of caregivers to residents gets worse.

“On top of that,” she said, “the acuity of our residents and the amount of care they need grows. It is time we realize the nursing home of 20 or 30 years ago that cared for people who needed basic personal assistance has evolved into a complex clinical setting.”

Staffing and the move to home care

Finding staff is a major challenge — not only for nursing homes but also for anyone in the health care sector, including home health care agencies or home companion agencies, where turnover can be as high as 50% annually.

State officials believe many nursing home beds aren’t filled because family members who worked from home during the pandemic were able to keep their parents or relatives at home, while others turned to private caregivers or home companion agencies when possible.

The pandemic has sped up a process that was already underway, with more people transitioning from institutional care to home services. The number of people seeking home care now is about where the state projected the numbers to be in 2028, said Dawn Lambert, co-leader of the Department of Social Services’ Community Options Unit.

“We’ve made this quantum leap and landed in 2028 because there are thousands more people now already living in the community today who are no longer in nursing homes,” she said.

“There are definitely more people at a nursing home level of care [who] right now are living in the community with informal caregivers like their relatives, and that’s the No. 1 thing for me, that we be able to support them so they avoid getting burned out.”

Gifford said the increase in “informal caregiving,” while hard to quantify, is something the state must address.

“There is a lot of informal caregiving going on, and sometimes if we can just provide enough support to the family caregiver, whether it's some respite or adult day care or some other kind of support, it is preferable for the client and for the family to keep them at home,” she said.

But the state’s narrative that people are afraid of nursing homes post-COVID doesn’t add up, Barrett said. National data from February shows nursing homes at about 74% occupancy, while in Connecticut the occupancy rate is about 83%.

“The notion that the skilled nursing facility model was completely undermined by the pandemic was a concern being expressed during the very worst and traumatic part of a pandemic in the spring and the summer of 2020,” he said. “I really challenge the idea that that would be an accurate portrayal of how the system is characterized today.”

Barrett said the staffing issues are having an outsized impact on the quality of care in nursing homes.

“Our quality was much higher pre-pandemic, when staffing was stronger, and there's every reason to believe that quality improvement will flow as the staffing situation improves,” he said.

A new funding system focuses on health needs

In July, the state quietly started a new funding method for nursing home providers called “acuity-based reimbursement.” Under the new system, providers will get paid based on the level of care needed for their residents. It requires putting data into a federal system that determines per diem rates and is based more on the needs of the residents than total numbers of beds filled.

Over the next three years, the state will invest $90 million to phase in the new system and help facilities deal with more medically complex residents. Some providers, who consistently have four- or five-star rated homes and who treat patients with the most severe health needs or have specialized units such as a dedicated respiratory unit, will get more money.

Each provider will be required to assess every resident's health needs and submit that information to a federal database so a “Case Mix Index,” or analysis of medical needs, can be established. Homes with patients who have a greater CMI Index will get an increase in Medicaid payments.

State officials are hoping the new system will improve the quality of care and get providers to open more specialty units to treat diseases such as dementia or provide services like dialysis.

Yehyun Kim

/

CT Mirror

Paul Liistro, whose family owned two nursing homes in Manchester and Vernon until last year, expected an increase of $4 million to $5 million in Medicaid payments based on the state’s formula. He believes that’s why it was so easy to sell his business over the summer.

Liistro was a frequent critic of state officials during the pandemic and was skeptical of the state’s plan to switch the funding model. Some homes won't fare as well under the new system.

“They don't want to see beds go down, the state wants to see nursing homes closed,” he said. “At the same time, they're talking about putting the money into home health care because it is cheaper, but we don't think the care is better for the patient.

“At the same time, they now have an acuity-based system ... and that's going to keep nursing homes alive, because people are going to figure out how to make the system work for them.”

State Long-Term Care Ombudsman Mairead Painter hopes DSS will push the new payment system and force providers to make improvements to their buildings that she said are long overdue.

“A lot of the buildings here in Connecticut are just outdated, and we haven't seen owners put the money back into the structure, the physical structure of the nursing homes,” Painter said. “We just haven't seen it. They take a lot of the money out but it doesn't go back in. And because of that, these buildings are just old and in need of repair.”

The survey

Even as legislators debate bills, the state's social services department has been working on a plan to shift funding away from certain nursing homes. Last April, DSS required every provider to submit a survey detailing occupancy rates and future plans in a post-pandemic setting for their facilities.

DSS made it clear the survey would be a vital part of what they are calling the “rebalancing” or “right-sizing” of the industry.

State officials warned providers the surveys would be used to determine which nursing homes receive funding under the new payment model.

Despite that, nearly 20% of the nursing home providers didn’t properly fill out the survey, state officials said, and the majority of them had no plans for changes other than to seek additional state funding.

Gifford said it is the state’s job to distribute funding to providers that adapt.

“Our job is to understand what's going on and with our payment model do whatever we can to ensure it's the highest quality facilities that remain in operation to the extent that any of them are going to close,” she said.

The surveys due in April 2022 were supposed to be the providers’ chance to share with the state not only their occupancy levels but also any changes they planned to make to their buildings.

While 169 of 195 providers who were sent the survey initially responded, the majority said they had no plans for change, and only 22 replied that they were actively seeking building renovations. Another 11 nursing home owners said they were looking into adding specialty units. The Department of Public Health had already approved two ventilator specialty units before the surveys were submitted.

These were not the forward-looking responses DSS officials had expected.

“The industry will obviously have to respond to the need and the demand in the community and adapt to those needs,” Gifford said.

The survey showed 85 nursing homes are over 85% filled, and 83 are under that mark. Almost all complained about the difficulty in attracting and keeping staff, the biggest issue facing providers right now.

Barrett said the April surveys are a good view of where the industry is now, but they are not the final word on where it will end up.

“It's an extremely important scan in terms of where the sector stands at this point coming out of the public health emergency. But by no means is it a final analysis or the final word on where the sector is going to land,” Barrett said. “Nationally, most observers believe the nursing home sector will recover. The question becomes, to what extent? ... And will it recover its occupancy to pre-pandemic levels?”

A shift away from nursing homes?

The state is now putting more of its Medicaid funding into home health care.

In 2018, for the first time ever, Connecticut spent more Medicaid money on home and community-based services than on institutional care, 53% to 47%, state data show. By 2022, it had spent 58% of its Medicaid long-term care funds on home services, versus 42% for nursing homes and other facilities.

DSS eventually sees that gap increasing to as much as 75% for home care and 25% to nursing homes.

Barrett said it would be a mistake to substantially dilute funding for nursing homes.

“Let’s not make the mistake of overemphasis on reducing nursing home bed supply,” Barrett said. “We are really urging the [state] to not be prematurely basing any new aggressive approach to right-sizing and rebalancing ... on where we are right now or on the April survey reports.”

In the survey, some providers said they expect to take over other nursing facilities that don’t make it financially.

“Eleven nursing homes believe neighboring nursing homes will close within the next 18 to 36 months, and they anticipated increased occupancy by absorbing residents and staff from those neighboring facilities that close,” according to a review of the DSS surveys.

At least six nursing homes have shut down since 2020, and several family-owned providers and large chains are selling their facilities to private equity companies, mostly based in New York and New Jersey.

Yehyun Kim

/

CT Mirror

The influx of private equity money into the nursing home field has caught the attention of legislators who are proposing a transparency bill, seeking to make providers reveal quarterly where state funds they receive are going.

Painter said she has grown tired of nursing home owners complaining they don’t have any money.

“I think it is a bunch of bunk that they aren’t making any money,” Painter said. “People wouldn't continue buying them if that were true.”

Painter is calling for full disclosure by nursing home providers of how many ancillary companies — pharmacies, laundry and food operations — get state money that is supposed to go toward patient care.

One of the bills before the legislature would require providers to be more transparent about where the state’s money is going. Providers would have to reveal whether private equity firms or other silent partners were getting a share of funds that could go toward staffing.

“We're not going to be able to improve the quality of care in nursing homes unless we first address the financial practices that some ... owners use to divert money from patient care in order to make their facilities more profitable,” said Nora Duncan, AARP Connecticut state director.

“Many nursing homes operate under complicated ownership structures that limit financial transparency and make it difficult to understand how facilities are spending taxpayer dollars.”

Bridgeport model

Between them, Liistro and White have more than 70 years’ experience operating family-owned nursing homes. They left the field within a few months of each other, alarmed by the uncertainty of what long-term care will look like in a state with an expanding aging population.

For White, the struggle to find and keep employees has been almost as difficult as fighting COVID.

“I can't tell you how much effort you have to put into this business, and you start to think, why are we doing this?” White said. “It was never to make money. We never made a ton of money, but you don't even really get the satisfaction of helping people anymore. It just got frustrating.”

Painter would like to see the state pivot away from hospital-like facilities and approve “smaller homes.”

“I'm really promoting small, community-sized nursing homes. I would love to see maximum 30- to 40-bed nursing homes scattered throughout the state,” she said.

Painter points to the Jewish Home in Bridgeport as an example of what a future building should look like. The Jewish Home is the newest facility in the state, having opened six years ago, and while it has 294 beds, it is designed like a series of small neighborhoods.

“There's a front door — you have to ring the doorbell. There's a mailbox. They have a living room, a centralized living room with bedrooms off of it, and many have individual rooms,” Painter said.

The Jewish Home is currently full, according to its director, Andrew Banoff. When submitting their survey in April, officials at the facility asked the state for more skilled nursing beds because of a long wait list.

“For those that do need skilled nursing care, which I think there will forever be that need, the concept of smaller units, private rooms and more personalized care is obviously a good thing,” Banoff said. “I'd love there to be more organizations that rebuild, renovate and find ways to invest in better environments for those we take care of.”

At least a dozen organizations have reached out to The Jewish Home's leaders to inquire about their model.

“Not shocking, the money and the capacity to invest in new buildings is a challenge for most,” Banoff said. “I think it's really important to look at, what are the other models? What are the other tools that organizations have to help people live safely in the community, including the adult family living home model, which is for people who are at a nursing home level, but we provide a caregiver in their home, and it’s funded through Medicaid.”

Both Liistro and White say there is still a need for nursing homes, and the state should be wary of eliminating too many beds or letting too many facilities close.

“There is absolutely a future for nursing homes. ... There isn't a substitute for it,” White said. “There’s always going to be a large segment of people who either can't afford or don't have a home, or their clinical needs are such that they can't be supported at home.”

CT Mirror staff writer Katy Golvala contributed to this story.