We are at a momentous crossroads in terms of critically needed Medicaid funding to provide quality care to Marylanders in our skilled nursing and rehabilitation centers, and in settings across the continuum of care.
Today we estimate that there are approximately 22,000 Marylanders who call nursing homes “home.” Nursing homes are the safest place for these Marylanders to receive the high level of care that they need each and every day.
Looking back on the historic challenges of the last two years, there is no doubt that Maryland’s prioritization of testing and vaccination in nursing homes, PPE distribution, staffing augmentation, and financial support saved countless lives of residents, patients, and staff in our sector.
However, today skilled nursing and rehabilitation centers remain challenged. Historically high labor costs and skyrocketing operational expenses have left Maryland nursing homes severely underfunded. Occupancy levels in skilled nursing and rehabilitation centers are at historic lows. Direct and agency labor costs are at an all-time high and labor shortages are more severe than ever.
KEY FINDINGS OF THIS REPORT INCLUDE:
Increasing costs due to labor and inflation. The average increase in wages for nurses at all levels doubled from 2020 to 2021. Rates for contracted agency nurses are also two to three times higher than pre-pandemic rates.
Negative margins. The median 2022 year-end operating margins are projected to be negative 4.8 percent, with a median occupancy of 77.3 percent. Any reduction in reimbursement could deepen existing financial issues.
Increased risk for closures. The report found that 32 percent to 40 percent of residents are currently living in nursing homes that are considered financially “at risk,” including buildings with Five-Star quality ratings.
Challenges with access to capital. Medicare margins and public health emergency related funding provided much-needed support throughout 2020 and in to early 2021. However, potential cuts pose a risk to nursing homes that face challenges such as occupancy decline, staffing shortages, and increased labor costs.