Mike Shepard, consultant with the Shepard Group, confirmed the August 17, 2019 closure of the The Oaks at Mena Assisted Living. The immediate release provided to us stated, "The Ouachita Senior Community Development Limited Partnership, owners of The Oaks at Mena Assisted Living, have announced the closing of The Oaks At Mena effective at midnight Saturday, August 17, 2019 due to insufficient operating revenue brought about by a reduction in Arkansas Medicaid reimbursements which took effect July 1, 2019 with an additional reduction scheduled in the future."
“The issue boils down to two things. First, DHS (Department of Human Services) and the state of Arkansas have restricted the number of Medicaid admissions going on the third year to 1200 applicants at any one time statewide. This is a CMS waiver program. When you go back to when the Assisted Living Program was formed in 2001, the state assured us that all of the Medicaid programs would remain viable. This assurance was necessary because the providers would have to invest millions of dollars to provide the buildings. When they restricted the slots, they created the start of the pressure. Then with the rate cut, which we argued and were able to get reduced to 16 percent rather than 22 percent, was still below our cost. Small facilities like The Oaks, with only 30 apartments, cannot survive at these reduced rates. You have restricted admissions and reduced rates. You just cannot cover your overhead,” explained Shepard.
He continued, “The facility is a non-profit community corporation. It is not like a privately owned facility that can go out and borrow money or the owners could invest. So, especially in the rural market, where there is not a lot of private pay, it is just devastating. The Oaks will just be the first of many that will end up closing, which will be devastating to the assisted living community for Arkansans that need Medicaid service. It’s all about saving money so you can pass on tax cuts. We are all disappointed.”
Shepard commended State Representative John Maddox for the diligent efforts made to reverse the cuts but stated, “The political lobby is so strong with the Nursing Home Association that we have just been unable to impact…. When folks leave assisted living, their next place of residence is the nursing home. This helps the nursing home, but it hurts the assisted living facilities, the residents, and their families.”
“I was notified late Tuesday night about the closure of The Oaks Assisted Living Facility. I was very disappointed to hear the news. I have worked for two years now with DHS trying to do all that I could to assist The Oaks,” stated Maddox. He continued, “I have worked closely with the staff at The Oaks throughout this and they have been great to work with. Unfortunately, we were not successful in keeping the facility open. It is my understanding that there is bed space available in our other local facilities that should be able to accommodate all of the residents at The Oaks. It is my hope that all of the residents can be placed as seamlessly as possible and I will do anything I can through the state to assist if necessary. I did call DHS first thing this morning to discuss the placement of the residents. If I can assist any of the residents or their families in any way I would be glad to assist,” explained Maddox.
“We have been fighting hard since October and has been very frustrating. It’s all about the families. It’s a shame you have to go out of business. It’s a loss of 30 jobs which creates an economic impact in the community, then you have the challenge of 28 families whose loved one have needs.”
In regard to placement of residents, Shepard shared that Peachtree Mena Assisted Living has availability as well as Dalton’s Place Assisted Living in Waldron, Arkansas. “We will be able to accommodate quite a few of them,” said Shepard. Shepard explained that both assisted living facilities were privately owned and have not received the direct impact as The Oaks. “We are able to inject capital to keep the doors open of both Dalton’s and Peachtree,” shared Shepard. Dr. Dick Black, of the Ouachita Senior Community Development (OSCD) Limited Partnership, stated in a phone interview that placement has been found for almost all residents which included the above named facilities and within the community of Mt. Ida and Glenwood. “We are doing everything we can to help our residents stay close to their families.”
Staff members will have an opportunity for employment at either the Peachtree or Dalton’s, but “we would not be able to absorb all of the employees. It will still be a negative impact for our staff members,” said Shepard. According to Black, the Arkansas State Employment office will be on location at The Oaks at 2 p.m. on Thursday, August 8 to provide additional assistance with job searches as well as provide information on unemployment benefits.
The Oaks at Mena Assisted Living was constructed in 2010 and opened their doors in 2011. Arkansas was one of eight states to have received a grant in 2002 from the Robert Wood Johnson Foundation which was awarded as part of the Coming Home Project. “Creating affordable assisted living is the goal of the RWJF grant. The grant is an extension of the Coming Home Program started in 1992 by RWJF and the NCB Development Corporation (NCBDC),” detailed Herb Sanderson, Director Director of the Department of Human Services’ Division of Aging and Adult Services. The Coming Home Program helps communities, especially rural communities, develop affordable assisted living residences that integrate and coordinate health, social and personal care services and housing for frail or chronically-ill older persons.” It was through the availability of these funds that promoted the OSCD board to secure the funding.
Since the opening of The Oaks, residents were ensured to receive a comfortable and pleasant environment for those approaching life’s end. Some services provided for residents included three home-cooked meals each day, nutritious snacks, an active social and recreation program, weekly housekeeping and linen service, scheduled transportation for local medical care, appointments, all utilities paid and shopping and community services.
Due to the nature of the grant and funds allotted to the project for elder care in an underserved rural community, the laws prevented the The Oaks to offer selected bed by private payment. According to Black, the building will be turned back over to the Arkansas Development Finance Authority. “We are greatly saddened by the fact that we have reached changes in state policies and reimbursement rates and so on that have forced us to close our doors. It’s a disappointment to all the people who have worked for the last 20 years to make the facility what it is today,” concluded Black.
Other assisted living facilities will see an additional reduction in January 2020 and again in July of the same year.