Northern Bay Residential Living Center, a 42-bed assisted living facility in Penobscot, is facing closure. FILE PHOTO

Northern Bay Residential Living Center faces closure



PENOBSCOT — Barring an unexpected development, this Sunday could see the end of Northern Bay Residential Living Center, a 42-bed assisted living facility.

For eight years, the owners of the facility, an organization called Eagle Landing Residential Care (ELRCare), have failed to make their organization financially viable.

Since 2008, the facility has been under receivership — its day-to-day operations managed by an outside entity while ELRCare sorted out its financial issues.

Those issues were never resolved, and last month Judge Michaela Murphy of the Business and Consumer Court in Bangor ordered ELRCare to find new buyers for the facility by Jan. 15. As of press time, no buyers were interested.

“This is an unfortunate situation,” Maine Department of Health and Human Services Commissioner Mary Mayhew said Tuesday. “Decisions could have been made many years ago where I believe there had been interest potentially from other possible companies.”

Court documents show that ELRCare’s financial difficulties were widespread. Prior to 2008, several Northern Bay Residential Living Center residents had lost weight, and vendors stopped supplying food there because of unpaid bills.

At least three different companies, including Sandy River Group and Armstrong Consulting Inc., have acted as receivers for ELRCare at different times since 2008, to no avail.

“At one point the receiver was picked by the owner,” Mayhew said. “There were significant issues that surfaced as a result of that.”

Once the deadline passes on Sunday, ELRCare staff will focus on finding new homes for the 33 residents living there. That task could be difficult, considering how many nursing homes have closed in Maine over the past several years, including in Winthrop, Lubec, Pittsfield and Calais.

“The process hasn’t started yet; we’re doing background research,” said Marjorie Love, an administrator at Northern Bay Residential Living Center.

Luckily, a few of the residents have families in the area. Others say they are willing to relocate farther away.

“I believe there’s a shortage of assisted living facilities in the area,” Love said.

The reason so many nursing homes have closed across Maine is that many of them are underfunded.

According to Mayhew, on average 60 percent of the revenues in a nursing home are paid for by Medicaid, the federal and state health insurance program for low-income people.

Unfortunately over the years, many nursing facilities were reimbursed by Medicaid based on their costs from several years ago rather than present costs, which was financially unsustainable.

Since 2011, the LePage administration has invested an additional $90 million in nursing facilities — a 47 percent increase — but even that burst of funding cannot undo some of the damage.

“When you leave nursing facilities under-reimbursed for years, you set in motion a decline,” Mayhew said. “Even when we’ve brought these additional investments to the table, there were still nursing facilities that were subsequently closed because they’ve been hemorrhaging for years.”

Mayhew said many family-owned nursing homes also closed due to the complexities of modern-day health payment plans and regulations.

“These are complicated organizations with compliance issues, with regulations, with sophisticated billing that they have to be able to navigate,” she said.

Mayhew explained those complicated backroom operations entail independent nursing facilities consolidating under the umbrella of a private, for-profit or a private nonprofit corporation.

“That creates an administrative efficiency,” Mayhew said.

Still, the residents of Northern Bay Residential Living Center are faced with a dilemma.

“People here have formed connections,” said Marybeth Judy, a Blue Hill resident who volunteers at the facility and who wrote a letter to the editor of The Ellsworth American urging readers to pay attention to the issue.

“I don’t know the economics, but it seems like there ought to be a lot of eyes on what’s happening,” she said in a telephone interview. “We need a facility like that in this area because of the whole demographic of Maine.”

David Roza

David Roza

David grew up in Washington County, Maryland, has reported in Washington County, Oregon, and now covers news in Hancock County and Washington County, Maine for The American and Out & About.
David Roza

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