The Village of Butte is seeking to save the local nursing home from closing, but a regulation requiring a certificate of need to change ownership is standing in the way. (Courtesy of Shanna Brooks)

LINCOLN - Regulations and a state law are blocking a small Nebraska village from saving its nursing home from closing.

That's what a state legislative committee was told Wednesday concerning the Butte Senior Living Facility, a 40-bed nursing facility scheduled to close at the end of the month.

Scott Brewster, chairman of the Butte Village Board, told the Examiner that for the good of his rural town and surrounding communities, and to retain the 50 jobs at the facility, a state law requiring a "certificate of need" to transfer ownership of the nursing home should be repealed.

"This is vital to the communities in our county so that it can remain viable for generations to come," Brewster said of Boyd County, a ranching and farming area of about 1,700 residents along the South Dakota border.

The impending closing of the Butte nursing facility has already had an impact on Brewster's family. His father in law died only a week after being moved out.

Brewster's wife, Britanie, tearfully told the Legislature's Health and Human Services Committee that her father had to be relocated 2 1/2 hours away from Butte due to the impending closing of the local nursing home. A second nursing home resident also died after being forced to move.

Currently, 21 rural counties in Nebraska lack a nursing home, Britanie Brewster said, with two more scheduled to close this spring.

Advocates for the current certificate of need law, however, say repealing the law is the wrong solution. They said that to save rural nursing homes from closing -- 50 have closed since 2015 -- the state needs to increase its reimbursement for caring for residents on Medicaid, something Nebraska has resisted doing.

Jalene Carpenter of the Nebraska Health Care Association, which represents nursing homes, called it "disingenuous" that Gov. Jim Pillen supports repealing certificate of need requirements but would not include more money to keep nursing homes open.

"We're trying to solve a problem by addressing the wrong solution," Carpenter said during Wednesday's hearing.

Legislative Bill 437 would repeal the Nebraska Health Care Certificate of Need Act. That law, for decades, required health care organizations to prove a "need" for building a new facility or expanding one, and to obtain approval, in the form of a "certificate of need," from the State Department of Health and Human Services.

Essentially, this functions as a moratorium on adding new nursing home beds unless a nursing home provider buys the capacity from an existing facility.

In the case of the Butte nursing facility, its current owner has rejected attempts by the community to purchase it. Because of the moratorium, lawmakers were told, Butte would need to "buy" excess beds from elsewhere in the state, which could make buying the local nursing home cost prohibitive.

The certificate of need law, passed 50 years ago, was intended to prevent overbuilding and duplication of medical facilities and equipment and keep health care costs down. Over the years, concerns have grown that requiring a certificate of need has become a barrier to improving and expanding health care.

Due partly to that concern, some health care facilities have been exempted from the Nebraska law, such as hospitals. Last year, rehabilitation facilities were also exempted.

State Sen. Merv Riepe of Ralston, a former hospital administrator, introduced LB 437. He told the Health and Human Services Committee that the current law was "anti-marketplace" and allowed those already in the health care business to prevent new competition.

"The concept was good, but it didn't work out," Riepe said.

Twelve states in recent years have repealed their laws, he said.

"States without certificates of need have seen increased competition, lower prices and increased services, especially in rural areas," Riepe said.

LB 437 was introduced on behalf of the Americans for Prosperity, a conservative, anti-regulation group whose representatives said the law amounted to "protectionism." One study, the group said, indicated that repealing the law had reduced health care costs in that state by $235 per capita.

But representatives from Madonna Rehabilitation Hospital and Bryan Medical Center predicted that repealing the certificate of need law would increase costs for them by exacerbating the current shortages of nurses, forcing them to spend millions on contract nurses to fill openings.

The state, they said, is already short an estimated 5,400 nurses, and if the situation worsened, the quality of health care would suffer.

Pender State Sen. Glen Meyer -- whose town lost its nursing home recently -- asked opponents of the bill what they'd say to the people of Butte.

"Tough?" he asked.

Korby Gilbertson, the lobbyist for the Health Care Association, said no one wants to see a facility close, but the nursing home in Butte wouldn't be shuttering but for shortages of staffing and funding.

"I think it's naive to think that someone else can open that business and be successful," she said, given the inadequate level of current reimbursement rates.

Carpenter, the president and CEO of the Health Care Association, added that Butte has the option, under the current law, to seek an exemption from having to "buy" beds from other facilities.

The Brewsters, meanwhile, said that Butte just wants a chance to keep an important employer and health care service open.

Britanie Brewster said that the facility provides $2.5 million a year in payroll, and if it closes, the next closest nursing home is 25 miles away, forcing long drives to see loved ones.

"We're not looking for the state to fund our nursing home. We're just looking for the state to give us an option ... so we can compete," she said.

The committee took no immediate action on the bill Wednesday. Riepe said the committee would discuss the bill Thursday.