Report: Some Georgia nursing homes at risk of closure from Medicaid cuts

The nursing home industry is one of several swaths of the health care sector that could see massive upheaval under “The One Big, Beautiful Bill Act,” championed and signed into law recently by President Donald Trump.

A report from researchers at Brown University’s School of Public Health concluded that dozens of nursing homes in Georgia — and hundreds more nationwide — could be at an elevated risk of closure because of the Medicaid cuts in the bill.

One of the entries on the list: Warrenton Health and Rehab.

Some nursing home advocates scoffed at the findings. Others said quietly they are on target. Most did not respond to questions from The Atlanta Journal-Constitution, including Warrenton Health and Rehab.

Medicaid, the government health care program for the poor, is often thought of as focused on children.

But it has grown to serve 17 million people nationally aged 50 and older, and is the backbone of the nation’s nursing home system. In Georgia nursing homes, more than 70% of patients pay their room and board through the program, according to the Georgia Health Care Association.

Budget analysts say there is a $964 billion hit coming to Medicaid funding, and researchers say those cuts are almost certain to eventually be consequential for the nursing home industry.

The impact on nursing homes isn’t a result of direct cuts in the tax and spending package — the industry was largely left alone. But hospitals took direct cuts and, in addition, researchers say millions of Affordable Care Act and Medicaid insurance recipients are at risk of losing coverage because of work requirements and red tape.

Those cuts, along with the resulting decreases in hospital funding, will ultimately mean states will have to cover the losses, analysts say.

All of that will have a trickle-down effect on nursing home funding, according to the Brown researchers.

In Georgia, the spending law’s impact on nursing homes is more likely to be felt in small, largely rural counties like Warren — where nearly one-quarter of the population is over the age of 65, and a similar percentage lives in poverty — according to the analysis.

Dr. Vincent Mor, a professor of health services, policy and practice at Brown who co-authored the study, said in an interview that he expects there will still be enough beds across the state for Medicaid patients, even if some facilities close. But even that has consequences.

“If you’re 80 plus, 85 plus, and you’re going to need that hospital and nursing home, you’re now going to have to go a long way to it, and that means your kids are going to have to drive” to visit, Mor said. About one in 25 rural households has no car.

And within a nursing home, “it will be that much more difficult for the staff that are there,” said Mor. “And for some places that becomes kind of a death spiral.”

The changes are happening at a time of massive demographic shifts: The nursing home population is expected to begin spiking in the next few years, as the oldest Baby Boomers begin to enter their 80s.

Georgia nursing homes on the list

The Brown study, commissioned by Senate Democrats, used data from 2011 to 2023 in determining the nursing homes that are at the highest risk of closure from the trickle-down effects of the new law.

The researchers singled out three factors they said had historically been associated with closures: relatively low occupancy rates, poor federal quality ratings and having at least 85% of residents receiving Medicaid assistance. The most recent full data set available was as of 2023.

More than three dozen Georgia homes are on the list. Ten of the homes have since improved their quality ratings enough to fall off, according to further AJC analysis. The newspaper reached out to all 27 of the facilities that remained, including five facilities in metro Atlanta, and few responded to interview requests.

The data says only that the homes are at risk of closure, Mor said. But many were already walking a financial tightrope even before the bill passed, and Brown’s data predict the Medicaid changes will about double the risk of closures.

When the AJC could not reach one of the homes by telephone, a reporter visited and found the facility had already closed in recent months, bringing the Georgia list down to 26.

Credit: Ariel Hart

Credit: Ariel Hart

Neil Pruitt, CEO of Georgia’s giant nursing home company PruittHealth, says the list is bunk. Two of the 64 facilities his company owns in Georgia, in Marietta and Monroe, are included.

“Obviously the bill is going to create pressure on state Medicaid programs‚” Pruitt told the AJC. But when it comes to which nursing homes may close, he said, “I’m not quite sure how they’re getting their methodology, because it doesn’t align with our internal metrics.”

“It seems pretty political to me,” he said. “It’s not even on our radar, nor have we ever thought about closing those centers.”

One longtime administrator in Middle Georgia, whose facility is on the list, was candid about her concern. Many of her residents were transferred from urban hospitals about an hour away, she said.

“We’re barely making it now,” said the administrator, who asked that her name not be used to avoid rattling residents and the surrounding community. “We praying, that’s what we doing. It’s just scary and disheartening.”

Leaders from one of the metro Atlanta facilities on Brown’s list, Sadie G. Mays Health & Rehabilitation Center in Southwest Atlanta, insisted their nursing home “is in no imminent danger of closing.”

“We have been serving this community for over 78 years, and we plan to be here for the next 78 years,” Board Chairman Samuel W. Bacote III and Executive Director Gerri Cooper said in a statement. “Over the years, Sadie G. Mays has had to deal with numerous changes to the Medicaid program. As always, we are making strategic decisions to deal with any changes.”

The nursing home industry’s state advocacy group, the Georgia Health Care Association, said the Brown report was generated by looking at an earlier version of the bill, before the industry won a major battle to quash a suggested direct cut. The Brown researchers say the findings still hold true because of the overall trickle down effect.

Patients at risk too

Mor, the Brown professor, predicted a death spiral for the finances of some nursing homes. But patients may be at risk, too, from potential staff shortages or from having to move, say other researchers and people who work with nursing home residents.

“You have to think about those older adults that are sitting in beds, that are waiting for a nurse, that are waiting for a meal,” said Dr. Ethlyn McQueen-Gibson, a Virginia-based professor and researcher who is president of the Southern Gerontological Society. “That’s somebody’s aunt, that’s somebody’s grandmother.”

If nursing homes close, residents could be forced to move to new facilities farther from family and friends.

That’s especially a problem because nursing homes chronically find it difficult to hire enough staff, and family visits become important supports. As of last year, nearly 20% of nursing homes had already closed a unit, wing or floor because of labor challenges, according to the nursing home group the American Health Care Association.

Rachel Werner, executive director of the Leonard Davis Institute of Health Economics at the University of Pennsylvania, said family and friends often serve as “an invisible workforce” performing services that are supposed to be handled by staff.

In Southeast Georgia’s Clay County, Dr. Karen Kinsell for years was the only doctor. In her observation, the ability of family to visit, “is the No. 1 predictor of how well you’re going to do.”

That’s particularly true if staffing is low, she said.

“They know what your ‘normal’ is,” Kinsell said. “So, your family visiting, both for your mental health and the ability to notice if something’s screwed up, is real critical.”

Andrew Olenski, a researcher at Lehigh University, is studying the issue. He said the effects of moving are likely to vary from patient to patient, nursing home to nursing home.

“Older and frailer residents, as well as residents in rural areas with few other providers, appear to experience only the mortality risk increase” from moving, Olenski said. Those who are physically robust may actually live longer, if with less family support.

And in a big win for the industry, Congress suspended an unfunded minimum staffing mandate that had been enacted by the Biden administration.

But Medicaid cuts to hospitals and reductions to other parts of the health system will indirectly increase the strain on nursing homes, said the Brown researchers. Medicaid requires states to pay for residents’ room and board — but it doesn’t make it mandatory to pay a sustainable amount. The Brown researchers’ bet as inflation rises, some states will not increase pay enough to keep residents in their beds.

Credit: Ben Gray for the Atlanta Journal-Constitution

Credit: Ben Gray for the Atlanta Journal-Constitution

Then there is Washington’s broader crackdown on immigrants, even people who work here legally. Deke Cateau, CEO of A.G. Rhodes, which operates several nursing homes in Atlanta, said immigrants make up 35% of the staff at his company’s facilities, none of which are on Brown’s list. Those workers would be hard to replace, Cateau said.

“That’s another huge pain point,” Cateau said.

Hoping for a state bailout

Cateau said the new law moves resources away from the changing demographics. But he hopes the state will step up.

“You know, the bright side is, I will say that our state’s Governor and legislature — on the whole, especially the last few years — have really worked hard to protect elders in our nursing homes through the Medicaid program,” Cateau said.

Still unclear is whether the Republicans who control Georgia’s purse strings will be willing to make up for the billions in federal funding Georgia’s state health programs are projected to lose as a result of the new law.

Left-leaning organizations, such as the Georgia Budget and Policy Institute, say that’s exactly what the state should do. They point to the state’s massive surplus.

But that’s not sustainable and unlikely to happen, say GOP leaders.

“We as a state cannot backfill all these federal funds,” said Georgia House Appropriations Chairman Matt Hatchett, R-Dublin, who oversees the budget process. “But we’ll do what we can, and that hopefully will help prepare entities, you know, to get better.”

Nursing home lobbyists are sure to fight hard for those state funds.

“The reality remains that Medicaid is underfunded, and there are limited resources available to meet the growing demand for care,” Clif Porter, president of the American Health Care Association nursing home advocacy group, said in a statement the day the bill passed. “Any reduction in resources within the overall care continuum cannot be taken lightly.”

Brown University’s Mor believes that over years, a state like Georgia is going to stop raising Medicaid payment rates enough to keep up with inflation — essentially delivering its own cut in addition to the reductions on order now. It’s either that, spend more, or further cut down the number of people on the Medicaid rolls.

“States are going to face this terrible choice,” he said.

AJC staff writer Michelle Baruchman contributed to this story.