Minnesota nursing homes in crisis

As many others have expressed recently, I am extremely alarmed about the rapidly growing crisis with our long-term care facilities (nursing homes) in Minnesota, and it’s impact on our seniors and others in need of skilled nursing care.

In southern Minnesota, it has become even more apparent with the recent closure of three local nursing homes due to financial crisis and employee shortages. These closures traumatize and displace residents, families, and staff. Inevitably, this also places an additional burden on other facilities that are struggling, including Oak Hills Living Center in New Ulm.

According to Oak Hills management, there are several reasons nursing homes, and in particular rural facilities are struggling.

Delayed rates: rural nursing homes receive rate increases from Department of Human Services much later than metro facilities. Metro facilities receive higher rates and faster reimbursement.

Why is that?

Rural nursing homes are simply not being treated equally, and this needs to change.

Cost Report Delays: Yearly rate increases are based on cost reports submitted two years prior. With this delay, 2023 rates are based on 2021 expenses. With inflation, the impact of this rate increase won’t be felt until 2025. This math simply does not add up.

Increasing Regulations: Complicating matters, skilled nursing homes are the second most regulated industry in the U.S. — second only to nuclear power plants. Skilled nursing facilities operate under a completely different standard than assisted living.

Staffing: There is a labor shortage throughout the country which most certainly includes New Ulm. In 2021, Oak Hills increased wages for all direct care staff without any additional compensation from DHS. They could not afford to do this, but also indicate they couldn’t afford not to under the circumstances.

Temporary traveling nursing staff is cost prohibitive, decreases quality of care and increases risk. Oak Hills Living Center is currently full, serving the community at its capacity. Staffing a full building is a delicate dance that is exhausting their workforce. The wait list for services varies as individuals pass away or choose other facilities, and Oak Hills turns away referrals every day.

Medicaid Equalization: North Dakota and Minnesota are the only two states in the United States that require homes to charge private pay residents no more or less than the set Medicaid rates from DHS. The rates provided by the state no longer cover the cost of care for aging services.

Unless the state increases the fund for nursing home reimbursements and elderly waiver, senior care cannot recruit and retain caregivers to provide seniors with the care they need and are entitled to receive.

Once again, Minnesota is not on a level playing field in terms of rates as other states. It is absolutely critical that our Legislators change this. Yet I have noted very little movement to address this issue by our Legislature.


At Oak Hills, nearly 3/4 of their revenue comes from Medicaid and private pay, meaning the majority of the revenue does not cover the cost of care. This dilemma is real for rural skilled nursing facilities in Minnesota. And this is not a complete list of the obstacles faced by our nursing facilities in Minnesota.

The future of our facilities is uncertain: should the reimbursement structure and staffing constraints continue, Oak Hills anticipates they will need to make difficult decisions regarding continuing to provide skilled nursing care. A dilemma faced by many skilled nursing facilities in Minnesota.

Seniors are admitted to nursing homes because they are no longer able to care for themselves in their own homes. They often have serious, complicated medical issues that require skilled nursing and around the clock care.

Where will these residents — who are our family members, neighbors and friends go to obtain the care they deserve and are entitled to?

They need to be as close to family as possible; not hundreds of miles away or even in another part of the country, where in an already vulnerable state, they can quickly become isolated and their overall health deteriorate as a result.

Seniors built this state, many served in our military, worked hard, sacrificed and contributed to our community. Long term care required to meet their needs must be a top priority for our community and elected officials. This is a crisis that, in my opinion, requires immediate attention by our Legislators and DHS. Failure to act at this critical juncture is unconscionable.

While the need is immediate, experts note there must also be an eye toward seeking long term solutions to funding, recruitment/retention of staff and a common-sense approach to the ever increasing regulations.

So what can we do at the local level right now?

Contact DHS, and our local elected officials and legislators up to and including the office of Governor Walz to demand they place their constituents needs on the front burner and finally take some action.

In Minnesota, there is currently a $17.6 billion dollar surplus. This can – and must be done.

— Pat Booker is a resident of New Ulm


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