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Investigation: Number of long-term care facilities closing has increased the last 3 years

Published: Dec. 7, 2021 at 6:21 PM CST
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GREEN BAY, Wis. (WBAY) - Diane Dugan has been operating adult family homes in Brown County for 20 years, offering serves for those with special needs.

“We are not receiving enough money to continue the care that is needed running these homes,” Dugan, who runs Curo Care LLC, said.

Over the last five years, Dugan said her facility has seen decreasing funding from the managed care organization Lakeland Care Inc.

Now it’s to the point where she is looking to get out of the business.

“I do feel that this has become a crisis and something has to change, something has to be done,” Dugan said.

Dugan isn’t the only person critical of managed care organizations, which distribute state funding to long-term care facilities.

“Funding how it was before. Where you have the state and then you have the providers. I think that that relationship was always fine before,” Scott Swartz, co-owner of Unlimited Possibilities, said. “You have too many hands in the pot so to speak.”

Swartz and his wife run group homes and he said the employee pool is limited because people can make more money working in retail or supermarkets.

“This is our passion. You know, we like to do it. We like to help people, but it has to make sense for everyone involved and right now it doesn’t,” Swartz said.

According to Swartz, the only way to offer competitive wages is with adequate funding.

There are five managed care organizations in Wisconsin, including Lakeland Care. The Department of Health Services sends Medicaid Funds to these MCO’s, which then send that money to the facilities for their patients who are enrolled in the state’s Medicaid program called *Family Care.*

“The amount of Medicaid residents is growing and the amount of private pays is getting smaller, so we’re not going to be able to offset costs in the future for the Medicaid residents by our private pays,” Tim Burns said.

Burns is the director of Goodlife Assisted Living Inc. and has four facilities with some in Winnebago County. He’s against MCO’s.

“There’s no margin, there’s no mission. You have to have a profit margin to succeed in any business and these margins are disappearing. It’s truly getting tough,” Burns said.

Action 2 News obtained data from DHS showing the number of assisted living facilities in Wisconsin that have closed in recent years.

From January 1 of 2021 until the end of September, 156 assisted living facilities closed with 125 of them being adult family homes. One-hundred-sixteen assisted living facilities closed in 2020 during the pandemic, and 109 assisted living facilities shut down in 2019.

The agency previously told Action 2 News it is federally required to set the rate it pays MCO’s. But, it doesn’t dictate how much each facility receives. That changed over the summer when Governor Tony Evers signed the GOP-sponsored budget.

LeadingAge Wisconsin President and Chief Executive Officer John Sauer sat on Governor Evers’ task force on long-term care.

“The state is embarking on a system that would fundamentally change the reimbursement system, so that the managed care organizations would be given clear direction on what to pay the provider,” Sauer said.

Providers told Action 2 News the changes aren’t adequate to offset the rising cost of care.

State lawmakers from both parties acknowledge that challenges remain, but there isn’t clear agreement on the path forward.

“We need to make sure that we’re approaching this in a smart fashion so that we aren’t seeing critical infrastructure go away, particularly in terms of how we care for the elderly, for the disabled. Because it’s very difficult to restart that once it closes,” State Sen. Andre Jacque, (R) De Pere, said.

“We need to be looking at all the solutions in front of us, because what we know is that what we’re doing right now is not working and it’s not sustainable and people seeking care aren’t able to find the care that they need,” Rep. Kristina Shelton, (D) Green Bay, said. She sits on the Assembly’s aging and long-term care committee.

One thing lawmakers, advocates and providers do agree on is that the people impacted the most by facility closures are the ones who need the care.

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