Maple Lawn needs a county bail-out from pandemic financial crisis

Maple Lawn, the Branch county-owned nursing care facility, faces a financial crisis caused by the COVID-19 pandemic.

Without a short-term cash infusion of nearly $1 million, nursing home administrator Jane Sabaitis warned, "We won't be able to make payroll."

She also asked the county commission for long-term relief in the form of a 10-year 0.99 property tax millage. That would need to go onto the November general election ballot requiring a commission decision before Aug. 16.

Commissioner Tom Matthew said a half mill was already approved in 2016 through 2035 for the last expansion and improvements. He is not ready to ask citizens for more.

"We need to work with what we have," he said.

That millage tax revenue cannot be used for anything but bond payments.

If a new millage passed, the money would not come until the summer of next year. Matthew noted the millage would bring in almost $1.6 million a year for 10 years to solve an $874,976 immediate problem.

"This is a perfect storm in a bad way," said Commissioner Randall Hazelbaker. "I'd be ready to go with the millage."

The county's financial problems make a short-term loan very difficult. County administrator Bud Norman said there is a legal question about whether the county can make a cash advance loan.

Commissioners left the issue on the agenda for next Tuesday's regular meeting without recommendation.

"We need a lot more information," commissioner Jon Houtz said.

Sabaitis said the problem arose with the state estimating Medicaid payments for patients based on history.

"The state then does a reconciliation based on what the facility bills for Medicaid claims, what they have been paid, and Medicaid payments," she said. "These reconciliations are usually done once a year. But due to the pandemic, the state has not done a reconciliation since April of 2019, which was for 2018 Medicaid billings."

A June reconciliation for 2019, 2020 and 2021 said Maple Lawn owed the state $874,976.96. It wanted to deduct the amount immediately from state payments.

The state did agree to withhold reimbursement in three payments of $291,659 in July, August and September.

"Financially, we have received just over $800,000 in Cares Act funding. This money has been used for operations of the facility." Sabaitis said.

There are federal funds now not initially available to county-owned nursing facilities.

"We have also applied for the Employee Retention Credit from the federal government for the first three quarters of 2021," Sabaitis said.

Plant Moran is in the process of completing this application, in a conservative return amount of approximately $3.2 million, Sabaitis said.

"If this funding comes through, it will benefit us greatly."

She believes the federal approval will come, but is not certain. ERC funds would pay back the county's short-term loan.

Sabaitis usually said the care center was 95% full, but during the pandemic dropped to about 75% capacity. Revenue for 2021 was down 5% from 2020. This year, Maple Lawn revenues are down another 20%.

Previous to this reconciliation, Maple Lawn was running to cash balance between $1 and $1.5 million for several months," Sabaitis said.

"This reconciliation significantly impacts our cash balance," she said.

Prior to the pandemic, Maple Lawn was consistently running above a 95% occupancy rate of 114 clients, Sabaitis said. Operational break-even is 100 patients.

"There are now 85," Sabaitis said. "We count on surgeries for hip and knee replacements for a portion of our rehabilitation census. Those numbers have been slow to recover. Many are choosing to go home for rehab with the home health or go to an outpatient facility."

There is a waiting list for admission.

"We have had to limit or not take any new admissions at a few different times due to not having adequate staff to take care of any more patients," she said.

Some staff left, rather than obtain COVID-19 vaccinations. Other nursing staff went for $50 an hour or more jobs as everyone struggled for health care workers.

May financials showed an operational loss of over $1 million and an April loss of $860,000. Sabaitis projected if the state took all three reimbursements, the cash balances would almost be gone by the end of next month.

The director said the building needs $350,000 in repairs to air handling units original to the 33-year-old building.

During COVID-19, short supply required $500,000 in extra PPE equipment.

Sabaitis said daily operational costs are down to $41,000 daily, down from $43,000 daily in 2021.

"Supply costs are up from inflation," she said.

Commissioners will confront the problems Aug. 9 at their regular meeting.

This article originally appeared on The Daily Reporter: Maple Lawn needs a county bail-out from COVID-19 financial crisis