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South Bend nonprofit Logan feels 'left behind' in COVID-19 relief while revenue takes a hit

South Bend Tribune - 6/10/2020

Jun. 10--Ever since March 25, clients of the nonprofit Logan haven't been able to go to jobs at Logan Industries, or games and gym time at the charity's Hannah and Friends Neighborhood or therapy at its autism centers.

People with developmental and intellectual disabilities are among the most vulnerable to an infection with the coronavirus, Logan CEO Matt Harrington said. They tend to have other medical conditions that the virus could complicate.

So to avert the health risks, he said, Logan officials have kept day services closed, even as their work is legally considered "essential." It isn't clear when the day programs will resume.

But this means a steep loss of revenue that the agency draws in reimbursements from the federal government's Medicaid waiver and insurance. Harrington calculates a funding gap of almost $1.44 million from March 1 through June 30.

To offset that, he's asking state and federal officials for a piece of the COVID-19 relief that other agencies have received.

"It's as if we have been left behind in help from the federal government," he said, noting that a national advocacy group has started a campaign for COVID-19 emergency funding for disability services, called #ForgottenFaces.

Logan is too big to qualify for a forgivable loan from the federal Paycheck Protection Program. The program, which is overseen by the federal Small Business Administration, was intended to serve small employers -- based on their revenue and having fewer than 500 employees.

Since the day programs halted, Harrington said, Logan has temporarily laid off 254 of its 584 mostly full-time employees while still paying their health benefits. Of those, 43 have been reassigned to jobs in residential programs. Staff still provide around-the-clock care for 121 clients who live in 32 homes and apartments throughout the community, including Logan's own group homes.

But, along with the CARES Act and other COVID-19 legislation, Congress also appropriated $175 billion in emergency relief for health care providers in what's called the Provider Relief Fund.

On June 1 and 5, U.S. Rep. Jackie Walorski, whom Harrington said he'd reached out to for help, co-signed a letter with other legislators -- and then a letter of her own -- to U.S. Health and Human Services Secretary Alex Azar expressing their dismay that $100 billion of the fund hadn't yet been distributed. They urged Azar to distribute the dollars, including to help those with intellectual and developmental disabilities and brain and spinal cord injuries.

Harrington said he also hasn't gotten a clear answer from Indiana'sFamily & Social Services Administration as to why it didn't seek more relief for Medicaid waiver programs from the federal government's "Appendix K" program, designed for emergencies.

When asked, FSSA officials pointed to FSSA Secretary Jennifer Sullivan's announcement on June 3 that the state had applied for and secured flexibility in using Medicaid waivers through Appendix K.

But Harrington counters that, under Appendix K, the state didn't request reimbursement rate increases or "retainer payments" to offer the significant financial boost that organizations like Logan need.

Also, the FSSA did secure grants that the feds passed to the state for COVID-19 relief for home- and community-based services that provide adult day care and "habilitation" -- specifically for those who had to suspend services.

Logan staff have been seeking answers as to how and when that aid will come, Harrington said. FSSA officials told The Tribune that guidance is coming soon.

'We were financially healthy'

There are few local charities of Logan's size.

Goodwill Industries of Michiana also didn't qualify for the Paycheck Protection Program because it has too many employees. But CEO Debie Coble said the schools that it runs, Goodwill LEADS, did qualify for PPP and got about $536,000 to help just the schools.

She said Goodwill Industries is "almost back to normal at this point," with stores at 50% capacity and by doing "most of our mission work ... virtually."

Oaklawn, a mental health care provider with 870 employees in St. Joseph and Elkhart counties, also didn't qualify for PPP, but it hasn't had to lay off staff, CEO Laurie Nafziger said.

Because it serves a different clientele, she said, it was able to tap into extra aid from Medicare. Its therapists and psychiatrists also have continued to see clients through telehealth while -- thanks to a temporary exception -- still drawing reimbursements from Medicaid, Medicare and private insurance.

"That has helped us tremendously," she said but added that Oaklawn will still finish the year with an operating loss.

If Logan can't secure the extra funding, Harrington said, it would eventually have to cut the scope of its services, though it hasn't reached that point yet.

"We were financially healthy coming into this," he said.

From March 1 through June 30, he estimates about $1 million in lost Medicaid waiver reimbursements, $2 million in lost insurance payments for autism therapy services and $75,000 lost from its canceled Nose-On luncheon.

He points to a total of almost $573,000 in expenses for unemployment claims, health care premiums for laid-off staff and supplies for COVID-19 measures, among other things.

On the flip side, Logan reports that it has saved about $2.4 million in wages for laid off staff, borrowed $600,000 from a line of credit and raised almost $366,000 from 95 donors for its emergency fund.

None of its clients have been able to go shopping or to other public places because of the pandemic. Family members can visit with them outside, wearing face masks, or take a walk but can't go for trips in a car.

Harrington said Logan is starting to think about how it might redesign its processes so that the adult day services can be brought back safely, but there aren't any target dates yet.

Autism services for kids, who have fewer risks from other medical conditions, are slowly starting to come back.

So far, he said, Logan hasn't seen any positive cases of the coronavirus among its staff and clients.

jdits@sbtinfo.com

574-235-6158

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