Nursing Home on Providence’s East Side Closing, Citing Ongoing Financial Problems and Coronavirus Pandemic

Rhode Island’s nursing home industry has claimed its first casualty of the coronavirus pandemic with the closing of a financially-ailing 57-bed facility on Providence’s East Side.

Hallworth House Rehabilitation and Nursing Center has announced plans to close its doors by the end of August. The nursing home’s officials have submitted a closure plan to the state Health Department which includes plans to relocate its 23 residents.

“The facility had lost more than $1.3 million in the last two years while maintaining high standards of care, but the COVID-19 pandemic made it impossible to continue,” Dr. Patricia Nolan, chair of the Hallworth House board, said in a statement. Nolan was director of the state Health Department from 1995 to 2005.

The closing follows a sharp decline in the number of patients in the nursing home’s 14-bed rehabilitation unit following the state’s stay-at-home order, Stephanie Igoe, administrator of Hallworth House, said in an interview Wednesday. The four-story building previously dedicated an entire floor to its rehab unit, she said, which included a gym.

“I’ve had to close the floor as of May 22,’’ she said. “So I’ve been running on two floors. And that was really very telling of what was happening in the market and what was happening with COVID.”

Patients in short-term rehab are typically covered by Medicare, the federal insurance program for people 65 and older. Losing those patients was a big financial loss to the facility, she said. That’s because Medicare generally pays higher reimbursement rates – often twice as high – as Medicaid, the state and federal insurance program for low-income people and those with disabilities.

“Over the last few years our Medicare census has dropped,” Igoe said. “And I do believe that’s due to technology and in-patients going home (from the hospital) for homecare and having their rehab done there, instead of having it done in a skilled nursing.”

James Nyberg, executive director of LeadingAgeRI, which represents the state’s nonprofit nursing homes, said in an email that the facility’s closure “demonstrates the financial struggles that the entire industry is facing” as federal Medicaid reimbursement doesn’t cover the cost of care. “Something needs to change,’’ he said, “in how the industry is reimbursed to support its viability.”

Founded in 1968 after a bequest from Robert Q. Hallworth, the building is owned by the Episcopal Diocese of Rhode Island. In 2000, Igoe said, an addition was built for office space.

But the building’s age and small rooms, some with shared bathrooms, Igoe said, would likely require significant upgrades to meet new federal standards for infection control which industry watchers say are inevitable in the wake of the pandemic.

Hallworth House, which had 51 residents in mid-April, has had 28 residents who have tested positive for COVID-19, according to a corrected version of the statement released Wednesday afternoon. Of those, 12 have died. Another five residents remain positive and asymptomatic.

The nursing home had “rigorous infection-control protocols in place when its first resident was diagnosed with COVID-19,’’ Igoe said in a statement. “Despite a sufficient stockpile of personal protective equipment, some 20 staff members were infected, but all have since recovered.’’

Hallworth House has a five-star rating from the Centers for Medicare & Medicaid Services, on Medicare.gov, which is described as “much above average.’’

Of the state’s 85 licensed nursing facilities, 52 facilities, or 61 percent, have had outbreaks of the coronavirus, according to state Health Department data.

The decision to wind down operations now, before a possible “second wave” of the virus, Igoe said, enables the nursing home to offer “very generous” severance packages to all of its employees. The severance includes one week’s pay for every year worked. Some employees, she said, have worked there 20 or 30 years.

Igoe said nursing home staff are also working with the residents, their families and the state to relocate the 23 current residents.

“We will work with every family to find a suitable home for their loved ones,” Stephanie Igoe, Hallworth House’s administrator, said in a statement. “We deeply appreciate the dedication and professionalism of our staff during this difficult period. They will receive a generous severance package, and our assistance in finding new positions elsewhere.”