Park Royal Health and Rehabilitation Center in Longview will close in September, citing a shortage of state financial support that is shuttering many other nursing homes across Washington, the center announced Monday.

The 50-bed nursing home at 16th Avenue and Delaware Street is operated by EmpRes Healthcare Management. According to a press release, 38 seniors will be discharged and relocated in the next couple months.

“We are most concerned about those residents, who will be forced to move from this area because of a shortage of beds in Longview,” said Kate Fiola, EmpRes regional operations director, in the press release.

Fiola said Park Royal employees will work with the state Department of Social and Health Services to help prevent patient trauma that often results from such closures.

Park Royal’s planned closure is the 17th nursing home closure in the state since 2017 that cited the rising gap between Medicaid funding and the actual cost of caring for patients, according to the Washington Health Care Association.

About 60% of residents in Washington skilled nursing facilities are on Medicaid, said Robin Dale, CEO of the association. Residents who pay for their stay in facilities are rare, and Medicare payments have decreased as well, he said. Medicaid payments are based on estimates of 2016 costs that have not been adjusted for inflation or increased staffing costs, Dale said.

New minimum wage levels in particular have driven up payroll expenses, he said.

“This results in insurmountable losses for facilities like Park Royal,” he said. “We fear there are more nursing home closures on the horizon.”

Dale said based on 2017 data, the direct care shortfall was about $43 per day per patient. That shortfall is going to get worse because the direct care rate is adjusted every other year, he said. The rate will be behind almost four years by the time it gets updated in 2020, Dale said.

The association told the Legislature that a rate adjustment was needed this year to prevent “significant” nursing home closures, but it was not brought up in the session, he said. “They’re going to have to address this,” Dale said. “The only question is how many facilities will close between now and then or between now and 2020.”

Dale said the Legislature needs to consider annually updating the direct care rate factoring so providers can keep pace with increasing costs. Competition for staff is the main driver of increasing expenses, he said.

“When you’ve got a facility being underfunded but trying to compete with hospitals, clinics and other settings, it makes it extremely difficult, especially when skilled nursing centers are the only providers required to have number of staff and at same time can’t find staff,” he said. “It creates a vicious cycle.”

It was not clear at press time what will happen to the Park Royal building.

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