Schuylkill County's nursing home, Rest Haven, is bleeding so much red ink commissioners believe selling it may be the only option.
"It's just no longer sustainable," Chairman Frank J. Staudenmeier said. "We need to make a decision very soon. We need to stop the bleeding."
The immediate cause of hemorrhaging is due to a buildup of bill payments $853,176 as of June 30 owed to Rest Haven that are over 120 days past due, and about $1 million in unpaid bills owed by the facility, said county finance director Paul Buber.
The delays in payments owed the facility are due to a slowdown in the Medicaid reimbursement process, Buber said.
Rest Haven as of June 30 carried $6.5 million in accrued liabilities, a large portion of which is retirees' health care benefits, he said.
Commissioners at a special meeting Tuesday morning agreed to loan the nursing home $750,000 and to give it $99,825.
That's a total of $849,825 from the general fund.
The final payment of a previous loan was due in June. It was rolled into the new loan because Rest Haven could not pay it, Buber said.
Buber said the loan, to be prepaid in five installments, and allocation are meant to help the facility through its "current cash flow squeeze."
The crisis is compounded by the continual shortfall between Medicaid reimbursements and the actual cost of care.
The nursing home is currently at its 142-bed capacity.
Of those, 119, or 84 percent, are covered by Medicaid.
However, the cost of care comes to $221.47 a day each while the Medicaid reimbursement is just $172.09 a day each. That's created a $2.14 million gap this year.
Another 5.5 percent of the beds are reimbursed by Medicare, the reimbursement for which varies.
The remaining 10.5 percent are covered by private insurance, which reimburses $275 to $325 a day.
County Administrator Mark Scarbinsky said the high number of Medicaid patients combined with the low reimbursement rate is starving the facility of needed funds.
"The losses just can't continue to accrue," he said.
George F. Halcovage Jr. said that because Rest Haven is a county facility, it gets a lower Medicaid reimbursement than those owned by private enterprises. Buber said the rate is about 7 or 8 percent lower.
"Even if we're at full capacity, we're going to continue to lose more and more money," Staudenmeier said.
"That tells me that we can no longer afford to be in the nursing home business."
Halcovage was also concerned about the amount of monies owed the nursing home.
"That's $853,176 that someone hasn't collected," he said.
Scarbinsky said another factor is that because the county owns one nursing home, it cannot get the cost savings of those that own multiple facilities.
Halcovage asked Buber and other officials to "please keep an eye on expenditures. We have to make sure we're running as efficiently as possible. It's important to our taxpayers that we continue to monitor this extremely carefully."
Buber, outside the meeting, said retirees' health benefits also factor into Rest Haven's dismal outlook. The county pays retired Rest Haven employees full health benefits until they turn 65.
That obligation stands at about $4.5 million, he said.
Buber said that despite the financial troubles, patient care at Rest Haven is "still outstanding."
According to Medicare, the facility has an average rating, with health inspection results above average, staffing much below average and quality measures much above average.
Scarbinsky said that when the county hired Service Access Management in July 2012 to manage and market the nursing home, only 117 beds were filled. Now Rest Haven is at capacity.
Commissioner Gary J. Hess said the level of care needs to be a top priority.
"Rest Haven has given good care. I think we can cut costs without attacking that integrity."
Staudenmeier said the county has done everything it can, from cash infusions to hiring SAM.
"I think (selling) is going to be one of the options we're going to consider. Obviously, we continue to pour money into the facility. The sad part is that we just can't afford it," he said. "We keep pouring money into the place and its not fair to the taxpayers of Schuylkill County."
Staudenmeier said, "Historically, Rest Haven is and was considered one of the better nursing homes in area. That's the sad part about this whole scenario. We have good employees there, and the facility has been operated efficiently."
Other counties have recently sold their nursing homes, including Carbon, Lackawanna and Lebanon. There are 12 other nursing homes in the county, so people have options, he said.
Schuylkill County has been applying tourniquets in the form of loans and allocations to stanch the flow of red ink from its nursing home, Rest Haven.
Here's the breakdown:
2014: $500,000, $159,066
2013: $500,000 (repaid in full)
2014: $557,927 (four of the five installments were paid), and $750,000