'We tried everything': A Hail Mary plan didn't work. Now, this nursing home will close.

A highly regarded East Providence nursing home plans to close in July – and is blaming the state for taking too long to increase Medicaid reimbursement rates or approve a "Hail Mary" attempt to shore up its precarious finances.

Linn Health and Rehabilitation, a nonprofit owned by Aldersbridge Communities, nearly shut its doors in December and now says that it would take "a large windfall donation of operating cash" to remain operational.

“We tried everything possible to keep our doors open," Jamie L. Sanford, the nursing home's administrator, said in a statement. "Now, we turn our focus to ensuring the safe relocation of residents and the continuation of appropriate medical and nursing care until all transfers are complete."

Earlier this week, the facility notified the state Department of Health of its intent to close on July 20, according to a news release on Thursday.

Linn has been open for 53 years, the release said. It currently has 48 residents, who will need to be relocated, and more than 100 staff members, who will be laid off.

Why is Linn closing?

Like many other nursing homes in Rhode Island, Linn is grappling with low reimbursement rates that haven't kept pace with inflation.

Most of the facility's residents are covered by Medicaid, according to a detailed FAQ that was provided to residents, families, and staff. With rising food, utility, and staffing costs, the facility is spending about $411 per day to care for each resident. But on average, it receives only $255 in reimbursement.

As a result, Linn has been losing $100,000 a month since the first quarter of 2023, the nursing home said.

Six other nursing homes in Rhode Island have gone out of business in recent years, the FAQ page notes. Nonprofits like Linn that serve a high number of low-income residents covered by Medicaid "feel the crunch more than corporate-owned entities with more revenue streams from related businesses."

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How the nursing home tried to stay open

Top officials from Linn and Alderbridge went public about the facility's financial struggles last winter and aggressively lobbied for an increase in Medicaid reimbursement rates.

The nursing home's pleas did not go unnoticed: Gov. Dan McKee's proposed budget for the upcoming year calls for a 14.5% increase that would take effect in October 2024.

But that change, which still awaits approval by the General Assembly, would only translate to an average increase of $36 per resident per day, according to Linn's Thursday news release. It hasn't happened fast enough.

"We advocated for legislators and state leaders to move this rate increase up to June or provide Linn with an emergency budget allocation, knowing that our operational funds would run out by then," states the FAQ page. "But our requests were denied."

The nursing home says it also received charitable donations, but only enough to cover several months of operating cash.

Could a pivot to assisted living help?

Earlier this year, Linn's leaders proposed a solution to the nursing home's financial woes: Converting one floor of the building into "The Loft at Linn," an assisted-living facility that would specialize in caring for patients with dementia and Alzheimer's disease.

Medicaid reimbursement rates would be higher for residents in the assisted living facility, which would also be likely to attract patients who pay out of pocket, providing a source of revenue to offset the ongoing losses.

But that change has to be approved by the state Health Department, which has yet to sign off on the application that Linn and Alderbridge say was filed back in March.

“State approval for our application for the memory care program is currently going much slower than expected, and time has nearly run out to cover our operational expenses," Richard Gamache, Aldersbridge's CEO, said in a statement. "We can no longer afford to wait, so closure is the inevitable and responsible step."

Department of Health spokesman Joseph Wendelken said in an email that Linn asked the department to "hold on processing their license as an assisted-living facility until they can start getting Medicaid reimbursement as an assisted-living facility," a process that involves working with the Executive Office of Health and Human Services.

He did not immediately respond to a follow-up inquiry about when the licensing process was put on hold.

Could RI leaders have done more?

The nonprofit still intends to move forward with the assisted-living concept on the second floor of the building and said that some workers may be re-hired at the Lofts at Linn.

But barring a windfall, it will run out of money to keep operating the nursing home on the third floor of the building, which will be forced to close.

Linn begged state leaders for emergency gap funding "to keep us afloat until our application can be approved," but to no avail, Gamache said.

SEIU 1199 New England, which represents workers at the nursing home, said in a statement that it was "incomprehensible" that Gov. Dan McKee's administration would deny providing emergency funding.

Linn is one of Rhode Island's few remaining non-profit nursing homes, and has consistently provided high-quality care and maintained appropriate staffing levels, the union said. Meanwhile, the Medicaid rate increases that are set to go into effect will "primarily benefit out-of-state corporations that own the majority of our nursing facilities."

"This cash infusion has no built-in accountability measures to ensure funding goes to direct care instead of enriching corporate shareholders," the union said. "We urgently need Governor McKee to propose a real plan to end our nursing home crisis, not issue more executive orders and blank checks to for-profit nursing homes who are already making millions of dollars in profit.”

Olivia Da Rocha, a spokeswoman for McKee, said that the governor's proposed budget for the upcoming fiscal year also includes $10 million of funding that would be available to nursing home providers from July until the October rate change — essentially bridging the gap until the new rates go into place.

That money would be distributed "based on the number of Medicaid beds days from the 2022 facility cost reports, provided at least 80 percent is dedicated to direct care workers," she wrote in an email.

This article originally appeared on The Providence Journal: Linn Health and Rehab in East Providence is closing. Here's why.