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If your mother does not fall into the above groups then Assisted Living or Memory Care would be where she would reside.
I have to ask is anyone POA? If there is a POA why would the POA allow discharge from a facility and let someone take her into their home? If the POA is you I am sorry for hitting you with the blame.
Anyway....depending on the dementia placing mom in Memory Care or Assisted Living would be the way to go from here.
*Some places if mom is not walking and depends fully on the wheelchair she would probably be in Skilled Nursing simply because of the potential for the use of equipment to transfer her.
I relate it to having children in reverse. We have babies and get so excited about all there little mile stones. Instead of watching my babies take there first steps, I'm watching mom taking her last.
Let you self grieve the losses.
Others in my family want to believe that moms degenerative spine, is "just a little sciatic", they are in for some surprises down the road.
I have two nieces that got angry with me because I wouldn't assume the role of POA for their mother. One refused to take on the responsibility for her mother and would rarely go visit her. I haven't visited either because over the past twenty five years my sister and I haven't been on good terms. The only way I could get back in their good graces is to allow them to freeload on my time and energy because they are all too busy.
Your niece learned a valuable lesson about allowing an elder to manipulate you into taking on the impossible. People need to stop making bad decisions on emotions alone and start using their common sense. No one human being is cut out for this type of caregiving for the long term.
Feeling sad is a valid feeling.
Trying to avoid uncomfortable feelings or trying to fix her Grandmother's health.. she tried. But now she knows - she cannot do either.
See how things progress. Near the end of the rehab stay there is often a care update meeting. (If not offered, ask). The Physio can guide you to what level of care will suit going forward.
It IS sad to see a strong person become frail. It's ok to feel sad.