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Grand Marais provider asks legislature to reclassify part of nursing home as hospital to restore reimbursements
Summary
North Shore Health CEO Kimber Rolstead testified on HF1912 seeking a legislative change to reclassify half of a nursing home unit as hospital swing-bed care to increase Medicare/Medicaid reimbursement and keep the only skilled nursing facility in Cook County open.
Representative Roger Scribe presented House File 1912 and called Kimber Rolstead, CEO and administrator of North Shore Health in Grand Marais, to testify about financial losses at the hospital and attached nursing home.
Rolstead told the committee the nursing home has operated at a steady loss for decades — averaging about $1.5 million annually and exceeding $2 million in the current year — and that reimbursement rules force cost shifting between hospital and nursing-home cost centers. She asked the committee for a targeted legislative change that would allow Medicaid to reimburse swing-bed care at a hospital-level swing-bed rate rather than a nursing-home case-mix rate by reclassifying half of the facility on paper as a hospital unit. “There will be no cost to the state of Minnesota,” Rolstead said, explaining the request is intended to adjust internal accounting and reimbursement rather than expand services.
Committee members asked technical and federal-approval questions. Representative Bierman asked DHS to comment on whether such a change would require a federal waiver or CMS approval. Elise Bailey, budget director for the Minnesota Department of Human Services, said DHS would need to work further with the author and the facility because the department had not previously done this exact type of rate reclassification and federal approval would be required. Rolstead said she had already met with CMS and state agencies and that other states (North Dakota, Hawaii, Kansas, Montana) use similar approaches.
Members stressed the hospital’s role in the community: North Shore Health operates a critical access hospital with 16 beds, a nursing home with 37 licensed beds, emergency services and ambulance responses, and is the only skilled nursing facility in Cook County, meaning residents would otherwise travel two hours or more for care. Representative Scribe and several members urged DHS to continue working with the facility to find a solution.
The chair laid HF1912 over for possible inclusion in an omnibus bill; the committee did not adopt a statutory change in this hearing.
