Friske appeals to Evers for Pine Crest Nursing Home support
County being asked to pay $1.1 million+ 2022 operating shortfall due to changes in State revenue
TINA L. SCOTT
EDITOR
On March 17, 2023, Lincoln County Board Supervisor Don Friske sent a letter to Gov. Tony Evers in Madison appealing to him for support for Pine Crest Nursing Home.
Friske’s letter explained that on March 3, North Central Health Care (NCHC) submitted a request to the Lincoln County Finance Committee for more than $1.1 million to cover 2022 calendar year losses incurred operating Pine Crest Nursing Home.
While Lincoln County maintains actual ownership of Pine Crest, on Sept. 17, 2019, the County passed a resolution to outsource the administration and management of the nursing home. Lincoln County subsequently contracted with NCHC to manage the nursing home’s operations starting in 2020. As part of the arrangement, Lincoln County as the property owner is still responsible for maintaining the building and grounds and must also make up any budgetary shortfall incurred in operating Pine Crest Nursing Home. The Nursing Home Management Agreement specified everything is “done on behalf of the County and all related obligations incurred shall be at the ultimate expense of the County.”
Gary D. Olsen, MPA, NCHC Executive Director, explained the reason for the $1,126,328 (unaudited) shortfall for 2022: “This loss was due to the State changing how the Supplemental Payments were distributed and the reduction in the Certified Public Expenditure (CPE) payments,” he said. “Without the loss of these revenue sources, Pine Crest Nursing Home would have ended the year with a gain.”
“There is currently an effort to request the State reimburse county nursing homes the amounts of Supplemental and CPE funding as was received the previous year,” Olsen said.
Friske’s letter to Evers signifies Lincoln County is enjoining this effort.
“The request for over a million dollars from NCHC was generated from the elimination of an annual payment from the State of Wisconsin Department of Health Services (DHS), Certified Public Expenditure payment (CPE), as well as a substantial reduction in the Medicaid Supplemental Payment program (SP),” Friske wrote to Evers.
“The budgeting process for county run nursing homes operated on a calendar year,” he said. “Thus, the 2022 budget operational budget, as well as the 2023 budget, was contingent on anticipated funding based on prior years and anticipation to increased Medicaid reimbursement and no additional communication regarding any foreseeable impact. The loss of these funding streams this late in the calendar year left the nursing homes unable to make necessary adjustments to remedy the operational loss.”
Friske said NCHC and Lincoln County are making adjustments to absorb this loss for 2023, but that still leaves the County with the more than $1.1 million dollar loss for 2022.
“A request for an additional $1,126,328 million dollars out of our (tax) levy of just $15 million will be nearly impossible for our local taxpayers to cover,” Friske said, “especially given the inflationary strains on all of the other services provided by counties on behalf of the state.”
“Pine Crest Nursing home is home to over 85 individuals, each with specific care requirements and families counting on our staff to provide that care,” he said. “Lincoln County has provided a nursing home facility for over 60 years positively impacting thousands of families. The cost of providing that care is becoming increasingly difficult and the elimination of the CPE payment and the reduction in the SP funding to rural Lincoln County makes it next to impossible.”
“County-operated nursing homes are required to provide care under payment from Medicaid,” Friske said. “The supplemental payment is intended to address low reimbursement rates and help make up shortfalls to the county budget ensuring continued operation of county owned nursing homes. The counties who had to make substantial changes to operations during COVID due to the financial inability to supplement losses through other means, were penalized as a result of the increased rates to the supplemental payment formula.”
“To add a little salt to the wound, Dane County Nursing Home received a $7 million dollar increase,” he said.
“I do not believe it was the intent of your administration to target rural Wisconsin nursing homes,” Friske wrote to Evers, “but intended or not, it impacts us the same.”
He went on to request Evers’ help with the dilemma this presents to Lincoln County, asking Evers to direct the Department of Health Services to reallocate the Supplemental Payment or in some other way make Lincoln County whole for the 2022 and 2023 annual county budget cycles.
“Additionally, I am asking that you provide clear guidance in an urgent timeframe on what counties can expect so we, as a county board, can make well-informed decisions regarding the feasibility of continuing to provide care for our residents,” Friske said.
Olsen said NCHC is requesting payment from Lincoln County if these funds are not received from the State by July 2023.
“If the State does not increase the amounts of Supplemental or CPE funding by the July notice, then NCHC requests that Lincoln County pay $1,126,328 (or the final audited amount) by July 31, 2023,” he said.
Ad Hoc Committe on Pine Crest to report at March County Board meeting
On June 21, 2022, the Lincoln County Board created an Ad Hoc Committee on Pine Crest, as recommended by the Administrative & Legislative (A&L) Committee, to “1) Review the existing financial obligations concerning Pine Crest, and to review the prudence of any future contractual obligations concerning Pine Crest made by either signed contact or County Board resolution; 2) Review the original and current use of the Pine Crest building and grounds; 3) Review the Nursing Home Management Agreement and the Memorandum of Understanding (repair and maintenance of durable medical equipment and removal/rearrangement of furniture) between Lincoln County and North Central Health Care as such documents relate to the building and bed licenses; 4) Provide a report to the Lincoln County Board of Supervisors outlining the past and current successes, failures and status of Pine Crest Nursing Home; and 5) Provide recommendations to the Lincoln County Board of Supervisors for consideration, detailing areas of improvement for Lincoln County’s overall position concerning Pine Crest Nursing Home.”
. The Ad Hoc Committee, comprised of Ken Wickham (Chair), Marty Lemke, Bill Bialecki, Greg Hartwig, and Angela Cummings, has been reporting to the County Board monthly and was scheduled to present their findings at the March 21, 2023, County Board meeting.