Wave of SD nursing home closures hitting hardest in rural small towns


Editor’s note: This is the second in a series of two stories about nursing home closures in South Dakota.

In late April, nursing home administrator Debbie Menzenberg sent a series of urgent emails to South Dakota health officials. Menzenberg was in charge of 18 nursing homes and one assisted living center across the state on behalf of Skyline Healthcare, a New Jersey firm that in January 2017 had assumed management of the nursing facilities owned by Golden Living Centers.

That month, Skyline stopped paying its bills, and Menzenberg told state officials that a company official told her the company was bankrupt and that she should begin discharging residents.

Unpaid water bills at the Bella Vista and Prairie Hills homes in Rapid City resulted in a shut-off notice, Menzenberg wrote. Electric service was in jeopardy at the nursing home in Pierre for the same reason. Employees across the group had not been paid and lost their insurance coverage. The facilities only had enough housekeeping and laundry supplies for four more days of operation and food for residents for only five more days.

“Bottom line, the South Dakota facilities are in harm’s way and all residents’ safety is at risk and will increase risk every day,” Menzenberg wrote on April 28. “I NEED HELP!!!” she wrote two days later.

The emails were the opening salvo in a battle to maintain proper management over the struggling nursing homes run by Skyline. In early May, a state circuit judge in Pierre accepted a plan to create Black Hills Receiver, LLC, a firm that is now running the former Skyline nursing homes. The executive in charge of Black Hills Receiver is a former Golden Living Center official. The South Dakota Department of Health signed off on the receivership plan.

Based on court documents, it is clear the entire group of nursing homes is financially unstable. After running the homes since early May, the receiver petitioned the court in November to close the nursing homes in Mobridge and Madison. By law, residents must be given 60 days to vacate after the closures are finalized. The judge and department of health have given initial acceptance to the plan. A spokeswoman for Black Hills Receiver said a brief press release issued by the firm in May would be its only official comment.

In the Nov. 13 petition to close the two facilities, attorneys for the receiver said the Madison and Mobridge homes had to be closed because they expected a loss of nearly $1.2 million between the two from May through December. Furthermore, the petition notes that the facilities in receivership in total will likely lose $7.7 million by the end of 2018.

The petition includes ominous language for the other 17 homes. 

“The receivership as a whole is operating at a significant, and unsustainable, loss,” the petition states. “If not addressed in a timely manner, the unsustainable operational losses could result in issues not just at the facilities that have the biggest financial issues, but also across the receivership.”

Financial pressure is also being applied by MidCap Financial Services, a firm that said in court filings it is owed more than $20 million by Skyline for loans made to the firm to run numerous nursing homes, including the 19 in South Dakota. The firm asserts that Black Hills Receiver is now responsible for the loans and argues that revenues from the nursing homes and value of property are being improperly used by the receiver to “prop up these failing operations” in South Dakota.

“Money to which MidCap is entitled continues to be used to fund failing operations for the sole purpose of preserving the value of plaintiffs’ real property,” the firm’s attorneys wrote in a November court filing. “The time for ‘patience’ has passed.”

In all, the 19 facilities in receivership have about 1,000 employees and roughly 900 residents. They are located in Arlington, Armour, Clark, Groton, Ipswich, Lake Norden, Madison, Milbank, Mobridge, Pierre, Rapid City, Redfield, Salem and Watertown.

A court hearing is set for Dec. 20 to finalize plans for closure of the Madison home with its roughly 50 beds and Mobridge facility with its 85 beds.

A group of concerned officials is seeking to come up with a plan to save the facility in Mobridge, but the exodus of residents from the home in Madison is well underway, according to Mayor Roy Lindsay.

“People are feeling sorry for the residents and staff, and those who are directly affected are really under stress,” Lindsay said. “Where do I take mom or dad? How far away do they have to go? In all of them, you’re taking them away from their friends and family.”

Lindsay and others are also trying to determine what is next for the property and nursing home itself, both of which are still owned by Golden Living. He said private housing firms may be interested, and also thinks Dakota State University in Madison could take advantage of an opportunity to create new student housing.

The pending closure has had a negative ripple effect on the entire city, Lindsay said. “The stress has been detrimental to everyone.”


Closures hard on residents, families and communities

Nursing home closures can take a significant physical and emotional toll on residents, some of whom suffer what is known in scientific studies as “transfer trauma” or a mental condition known as “relocation stress syndrome.”

According to a study by Consumer Voice, a national advocacy group for residents of long-term care facilities, those conditions can cause displaced residents to become depressed, agitated, withdrawn, and lead to falls, weight loss or complacency about caring for themselves.

Guy Varud has seen this trauma up close over the past several weeks as he prepares to move out of the Madison Care and Rehabilitation Center, which is a former Golden Living Center facility slated to close by Jan. 31.

Varud, 76, is a retired financial manager from Sioux Falls who suffers immobility due to failed knee surgeries.

Many of his fellow residents are from Madison and receive regular visits from local family and friends, Varud said. A lot of tears have been shed as those residents prepare to move and they and their families begin to understand they may soon be separated by 40 miles or more.

“People cry on the way out; they sit at the tables and cry because they’re losing their home,” Varud said. “Some staff cry when they see people leave. It’s happening every time you turn around, and it breaks you up.”

Varud has connections in Sioux Falls and the resources to find a nursing home bed there when the Madison home closes. He said about half of the home’s 50 or so residents have already moved out.

He expressed disappointment that the state Legislature has allowed Medicaid reimbursement rates to fall so low and that the Department of Health has not allowed more time for Madison officials to mitigate impacts of the closure or to find a way to keep the home open.

“To be thrown over the cliff like this is one of the most cruel things I’ve ever seen,” he said. “Many of these Medicaid people use to have substantial incomes, but due to difficulties in their life, mostly health issues, they’re on Medicaid, but they paid taxes all their life and they don’t deserve this.”

Varud, who serves on a patient leadership panel at the Madison nursing home, said he is also concerned that the receiver overseeing the troubled Golden Living Centers is trying to move displaced patients from Madison to other homes that are part of the 18 facilities being run by the receiver.


One town saves its nursing home

Rumors of bad news began to swirl quickly throughout the town of Selby in early October: the Good Samaritan Center nursing home in the town of 625 people was being targeted for closure.

The facility was run by the Evangelical Lutheran Good Samaritan Society of Sioux Falls, a regional operator of nursing homes. Good Samaritan is based in Sioux Falls and runs housing and health care facilities, including nursing homes, in 23 states.

Like other nursing home operators, Good Sam has faced headwinds in trying to maintain viable homes, said Aaron Woods, director of corporate communications.

“The environment we operate in is undergoing a period of unprecedented transformational change,” Woods wrote in an email. “We are committed to the communities we serve and will continue to monitor how all our locations perform.”

The Selby nursing home, like a few in Nebraska that have been closed recently by Good Samaritan, was not deemed viable.

The news sent shock waves through the small town, which would have faced the relocation of about 45 residents and the loss of 50 jobs.

“The people living there would have been hurt the most,” said Dan Biel, a Selby insurance agent who is now the president of the non-profit Walworth County Care Center group formed to run the nursing home. “But trying to move a 90-year-old person, that would have been the hardest part.”

A public meeting was called and about 450 people showed up. The community rallied to save the nearly 60-year-old facility. After negotiations with Good Samaritan, which has agreed to donate the building to the new nonprofit, the fledgling group hired a management firm to handle operations and raised $400,000 in donations in less than two months to keep the nursing home operational. Donations came from a farmer who sold a load of grain on the group’s behalf, from events like a walleye fry and an auction with a comedic hypnotist, and from a business owner whose family members previously lived in the nursing home and gave $100,000 in seed money.

Biel said the process has been a whirlwind but so far appears to have a happy ending. Though employees had to accept a lesser insurance plan, most have stayed on, he said. Biel believes that as a standalone institution and with local oversight, the facility can be run more efficiently and more cheaply than Good Samaritan was able to accomplish.

He said the goal is to simply operate the home without a loss and use the new capital reserves for backup only when necessary.

“Obviously people wouldn’t be closing nursing homes if they were making money,” he said. “So, our main goal is we’d be doing dang good if we just broke even.”

The nursing home opened under its new nonprofit ownership on Dec. 1 much to the relief of the residents of the home and the community as a whole.

“The staff has really pulled together and rooted for each other, and the residents are extremely pleased they don’t have to move,” Biel said, noting that one resident of the home is 103 years old.

Nursing homes in financial trouble

This list includes the names of 18 South Dakota nursing homes and one assisted living facilities that are under control of a financial receiver that intervened when Skyline Healthcare of New Jersey went bankrupt. The homes in Madison and Mobridge have been targeted for closure by the receiver, which has indicated that the entire group of facilities is in financial hardship.

Arlington Care and Rehabilitation Center

Armour Care and Rehabilitation Center

Bella Vista Care and Rehabilitation Center (Rapid City)

Black Hills Care and Rehabilitation Center (Rapid City)

Clark Care and Rehabilitation Center

Covington Care and Rehabilitation Center (Sioux Falls)

Groton Care and Rehabilitation Center

Ipswich Care and Rehabilitation Center

Lake Norden Care and Rehabilitation Center

Madison Care and Rehabilitation Center

Meadowbrook Care and Rehabilitation Center (Rapid City)

Milbank Care and Rehabilitation Center

Mobridge Care and Rehabilitation Center

Park Place Care and Rehabilitation Center (Milbank)

Pierre Dave Care and Rehabilitation Center

Prairie Hills Care and Rehabilitation Center (Rapid City)

Redfield Care and Rehabilitation Center

Salem Care and Rehabilitation Center

Watertown Care and Rehabilitation Center