- The American Health Care Association and the National Center for Assisted Living released a memo describing the financial crisis of the nursing home industry. The memo focuses on Medicaid’s underfunding, the significant resources required, and the potential collapse of the industry.
- HHS announced today that an additional $35 billion in Provider Relief Funds will be distributed from the $175 billion allocated from the CARES Act. $15 billion will be distributed to Medicaid and Children’s Health Insurance Program (CHIP) providers. The money will be distributed to eligible providers that did not receive a payment from the initial $50 billion distributed based on Medicare fee-for-service activity. $10 billion will be distributed to ‘safety net hospitals’ which are hospitals with the following three criteria: a) Medicare Disproportionate Payment Percentage (DPP) of 20.2% or more; b) average Uncompensated Care (UC) per bed of $25k or more; and c) profitability less than 3%. $10 billion will be distributed to hospitals in COVID-19 hotspots.
- The Paycheck Protection Program was amended with new legislation – most notably, companies now have 24 weeks to spend the money (as opposed to 8 weeks) and the requirements to spend the money on payroll is now 60% (rather than 75%).
- CMS detailed increased penalties for nursing homes that do not provide adequate infection control. Since not all facilities have had surveys to assess their infection control policies, CMS is incentivizing states to perform these surveys in the coming months via an $80 million fund set aside by the CARES Act. Also in this press release, CMS released the initial results of how COVID-19 is spreading in nursing facilities. “Early analysis shows that facilities with a one-star quality rating were more likely to have large numbers of COVID-19 cases than facilities with a five-star quality rating.” The press release then pivoted to discuss CMS’ intention on increased penalties in an effort to “prevent backsliding, improve accountability, and ensure prompt compliance.” CMS also issued a memo to the State Surveyors which outlined how fines for poor infection control could receive fines ranging from $5,000 to $20,000.
- HHS’ OIG will audit whether the first $50 Billion in Provider Relief Funds were distributed in accordance with the CARES Act. This audit will review HHS’ actions, not individual provider actions. It will be interesting to see whether this delays payment of future Provider Relief Funds or not.
- The association of mainly not-for-profit SNF operators detailed State-by-State actions to support providers. “It is notable that Medicaid historically has not paid nursing homes (or other aging services providers) for the full cost of care to the people they serve. This shortfall in Medicaid rates likely exacerbated the financial strain on Medicaid providers like nursing homes as the pandemic began and underscores the need for enhanced federal and state support to this group,” LeadingAge wrote.
LeadingAge: Listing of States SNF Assistance through COVID-19
- Many states will likely need to cut expenditures given rising Medicaid costs and unemployment costs caused by the pandemic. This article from The Hill reports how Governors are eyeing Medicaid rate cuts to providers as a potential way to help balance state budgets. To avoid these cuts, the federal government is being called upon to increase their share of Medicaid funding. The House of Representatives passed legislation on Friday that would in part increase the federal government’s share of Medicaid funding, but the Senate is likely to draft their own bill. With state fiscal year end approaching June 30th, this topic will likely stay in the news for some time.
- The Kaiser Family Foundation (KFF) did an analysis of how HHS distributed the $175 billion in ‘provider relief funds’ from the CARES Act and the Paycheck Protection Program and Health Care Enhancement Act. Non-Medicaid heavy hospitals were favored by the calculation used to determine distributions. This is largely due to the fact that HHS utilized Medicare statistics to distribute the relief fund payments rather than Medicaid statistics. KFF point out that “an alternative methodology for distributing the funds based on patient volume or that increased the size of the grant for providers that are more reliant on public payors such as Medicaid would have distributed the funding more evenly and less skewed by higher revenues from private insurers.”
- State surveyors have visited almost seven thousand nursing homes, or 44% of the nation’s total nursing homes, since CMS focused surveys on infection control in March. CMS’ Nursing Home Division director Evan Shulman said there has been solid progress but three major areas of “sporadic noncompliance” linger on: a) hand hygiene; b) use of PPE; and c) resident cohorting. Mr. Shulman indicated the issues relative to PPE were improper use and not the lack of supply.
Additional details from Skilled Nursing News
- No concrete news yet on when visitors will be allowed at SNFs, but CMS draft plans were leaked a few days ago. For facilities with a small percentage of residents with COVID-19 cases, they would have to have no new cases for 14 days before some restricted visitors are allowed. For facilities with larger outbreaks, they would have to have no new cases for 28 days before some restricted visitors are allowed. CMS did not comment on the plans as they are not yet finalized.
- New York Governor Andrew Cuomo announced new nursing home regulations yesterday, most notably that Hospitals can no longer discharge patients to SNFs unless the patient is COVID-19 negative (which is a 180 from his previous guidance back in March); new PPE guidance and that workers at New York SNFs must be tested every two weeks. SNFs that do not comply may lose their license.
- A SNF in Maryland was fined $10,000 per day after a state survey outlining the facility did not properly slow the spread of COVID-19. Increased fines and penalties are expected in other states as more surveys are performed.
Maryland SNF fined $10k per day after survey
- The star rating system for nursing homes has been significantly affected by the COVID-19 pandemic. The health inspection survey, a main component of the five-star rating will be excluded from the rating beginning on March 4 and ending at some point when the COVID-19 situation changes.
- News broke that Oregon’s Department of Human Services ordered the emergency suspension of a SNF’s license due to infection control. A few weeks ago, state surveyors observed that staff were not adequately washing their hands, did not receive proper training on how to slow the spread of the infection, and were not properly social distancing. The facility had a high percentage of residents ultimately become infected with COVID-19. Residents were either hospitalized or transferred to other facilities. The facility has 90 days to request a hearing to object to the suspension.
Oregon SNF License Suspended due to Inadequate Infection Control
- News broke that Ohio’s Attorney General issued a ‘COVID-19 search warrant’ to an ALF. Agents from the health care fraud unit were sent to the facility after the attorney general’s office received tips about the facility. The attorney general has not disclosed specifics on the situation.
Ohio ALF issued a ‘COVID-19 Search Warrant’ from Ohio Attorney General
- New Jersey Governor Phil Murphy said, “The industry does not have it within themselves to make the changes they need. If they had, they would have done it already,” and that, “change will be coming.” Specifics were not immediately available but the industry is bracing for additional oversight.
New Jersey Governor Signals More Oversight to SNFs
- $50 billion of a total $175 billion of the Provider Relief Fund payments from HHS has already been distributed: the first batch of $30 billion was deposited on Friday April 10th and Friday April 17th, while the second batch of $20 billion was deposited on Friday April 24th and Friday May 1st. This $50 billion was tied to Medicare activity, which leaves many healthcare providers waiting for their turn. Here’s Skilled Nursing News reporting on the current “waiting game” that SNFs are enduring.
- CMS announced on Friday COVID-19 reporting details for nursing homes. Providers are required to submit weekly data about confirmed and suspected COVID-19 infections and deaths to the CDC. The first weekly reporting is due no later than this Friday, May 8th. SNFs must report information on both residents and staff. Here is Skilled Nursing News’ take on the announcement.
- CMS announced yesterday that a new independent commission will conduct a comprehensive assessment of the Nursing Home Response to the COVID-19 pandemic. CMS Administrator Seema Verma said the commission will, “provide recommendations to further enhance efforts at the federal, state and local level, and help strengthen the Nation’s response to Coronavirus and keeping residents safe in nursing homes.” The commission will meet in late May to make recommendations on three key tasks: a) maximize quality of life for residents; b) mitigate COVID-19 transmission; and c) infection control compliance. This commission, tasked with addressing patient safety in nursing homes, is a response to the mounting public pressure around the skilled nursing industry.
- The White House COVID-19 Task Force announced that FEMA will be shipping to every nursing home in the United States a supply of PPE (surgical masks, gowns, face shields, and gloves) in early May and again in early June. Specifics were not yet announced.
- Healthcare providers do not have to apply to receive HHS Relief Fund Payments. To that end, some closed hospitals received their portion of these funds and will have to work with HHS to pay it back. On the other side of the coin, there may be providers with 2019 and 2020 Change of Ownerships (CHOW) that may not have immediate access to the Relief Fund Payments. Medicare providers for whom HHS did not have adequate data on file will need to submit their revenue information to HHS via their website to receive their portion of the Relief Fund Payments.
- The federal government announced on Sunday that the Medicare Accelerated/Advance Payment Program (AAPP) was suspended. CMS halted AAPP after paying $100 billion to healthcare providers and suppliers. In the press release on CMS.gov, no new applications will be reviewed due to the “historical direct payments made available through the HHS Provider Relief Fund.” As announced by HHS last week, $50 billion of $175 billion in Provider Relief Fund payments have been distributed thus far.
- On Friday, CMS released staffing data for nursing homes in an effort to provide more information to local and state governments to make decisions on personal protective equipment. The information is based on 4Q19 data and may not be indicative of current staffing levels. Also announced on Friday, CMS will update Nursing Home Compare on Medicare.gov with new data on April 29, but that the inspection results will not affect buildings’ individual star ratings as CMS suspended non-emergency surveys in March.
CMS Releases Nursing Home Staffing, Census Data to Help States Make PPE and Testing Decisions
- New York governor Andrew Cuomo announced additional regulations on New York SNFs yesterday. A new requirement is that nursing homes must immediately report to the state Department of Health (DOH) the actions they have taken to comply with recent regulations amid the ongoing COVID-19 pandemic. The DOH will inspect facilities that have not complied with these directives and could levy $10,000 fines per violation and facilities can also face the loss of their license. In his press conference, the governor admitted that additional testing and supplies were needed for nursing homes, but balances that comment with a warning that they must comply with regulations. “This is a very intense situation for nursing homes; we get it. But they still have to perform their job, and do their job, by the rules and regulations.”
- The NIC released their survey findings for last week. About 85% of SNFs indicated census decreases in the last month with 40% seeing a 10% or more decrease. The driving factors behind this trend were as follows, “Reasons cited by respondents include fewer hospitals discharging patients to post-acute care settings for rehabilitation therapy as hospitals defer elective surgeries due to the pandemic, and positive or suspected COVID-19 related moves of residents to isolated units. Nearly one-half of organizations with any nursing care beds cited an organization-imposed ban on move-ins, and nearly one-quarter cited a government-imposed ban on admitting new residents.” Not only are SNFs experiencing decreased revenue, but also increased operating costs. Operators have seen some relief from the federal government with the HHS Relief Fund Payments, but to date, these receipts were primarily distributed to Medicare providers. Additional relief is still needed for primarily Medicaid providers like the long term care community.
- The CARES Act included $100 billion in Provider Relief Funds. Last week, $30 billion of the $100 billion was distributed to providers based on 6.2% of their 2019 Medicare receipts. Yesterday, the Department of Health and Human Services (HHS) announced an additional $40 billion of this fund will be distributed beginning Friday, April 24th.
- The legislation that the Senate passed and is currently awaiting a vote from the House includes an additional $75 billion to be added to the Provider Relief Fund. This article from Skilled Nursing News indicates how Skilled Nursing Facilities are still awaiting substantial relief because their revenue is primarily generated from Medicaid residents.
- Hospitals in Indiana and Upstate New York will resume elective surgeries next week. In both instances, both areas won’t be back to ‘business as usual’ right away. For example, Governor Andrew Cuomo’s plan allows hospitals to perform outpatient procedures only, not inpatient procedures. Cuomo’s plan also requires those seeking elective surgery to test negative for COVID-19 before undergoing a procedure. Each state, and likely region will have its own parameters for getting hospitals back up and running to ‘business as usual’.
- As announced on Sunday, SNFs will soon have to start submitting COVID-19 data to the federal government. This article outlines some pitfalls as the requirements may not align with existing state and local reporting requirements. The requirement was announced a few days ago but it is not in effect yet as the reporting parameters and web portal are still in development.
- Last week there was rather morbid news from a New Jersey nursing home that fueled national headlines. One of the owners of the nursing home was involved with Skyline Healthcare, which famously grew and then filed for bankruptcy. This update from Skilled Nursing News summarizes how some states are seeking stricter legislation after Skyline’s demise. Maybe more states will follow suit post COVID-19.
- These days it is easy to find negative press on SNFs but much harder to find positive news. This article outlines how Maryland state surveyors inspected the facility last Friday and determined that, “the staff and leadership of this facility are doing a fine job controlling their outbreak,” and the facility’s, “isolation unit appears well designed and your residents appear well cared for.” The report states that the facility could use additional testing kits and personal protective equipment to help combat the outbreak of COVID-19.
Positive Press for a MD SNF
- A south suburbs Chicago hospital that closed last year is almost ready by the Army Corps of Engineers to be used as an alternate care site to handle COVID-19 patients. The facility will function as hospital overflow and people will not be able to drive up to the facility to receive service.
Chicago Hospital Reopening
- Per new, expected CMS guidance, nursing homes will now be required to notify the CDC, residents, and resident families of all COVID-19 cases at the facility.
Required notification per CMS
- CMS released a 3-page document outlining how facilities should provide non-emergent non-COVID-19 healthcare in Phase 1 of the White House’s plan to reopen the country. Region by region, state by state will reopen non-COVID-19 healthcare at their own pace once the facilities, workforce, COVID-19 testing and supplies (personal protective equipment) are adequate.
When Non-Essential Surgeries & Medical Procedures will Resume
- After the SBA’s $350B payment protection program (PPP) ran out of money, the Federal Reserve is implementing a new $600B loan program, the Main Street Lending Program. These funds are not forgivable like the PPP program, but do offer a low interest rate and favorable payment terms. These loans will be available to companies that were profitable prior to the pandemic.
Additional financial assistance is on the way
- The current structure to support nursing homes consists of complicated Medicaid and Medicare rules, complicated state and federal legislation, and complicated business structures. Adding COVID-19 to all of that creates the perfect storm.
The hurricane-force winds of the COVID-19 crisis blew the whole structure down
- In addition to the horrific toll on human life and health that COVID-19 has had on the long-term care industry, the financial toll will be felt for months to come.
Projection: SNFs to Lose $6 billion
- To get real time information on where in the county there are COVID-19 outbreaks in nursing homes, CMS is going to be requiring providers to report outbreaks directly to the Centers for Disease Control & Prevention. This is in an effort to help respond to future infections before they spread within a facility.
Providers to report cases directly to CDC
- Surveyors are finding that nursing homes are not following long-standing, required infection-control measures such as proper hand-washing protocol and proper use of personal protective equipment. Compliance with these guidelines are vital to protect residents and prevent compliance issues with CMS and state governments.
CMS is continuing to conduct targeted infection control inspections
- As noted in many articles, nursing homes are currently experiencing vast shortages of personal protective equipment and quick, accurate testing kits. This is quickly creating a litigious environment. SNFs need to be vigilant in documenting every step they are taking to provide care for residents.
PPE Shortages to Play Central Role in Future Nursing Home Lawsuits
- The President of the American Seniors Housing Association (ASHA) is frustrated by the lack of priority that senior care facilities are experiencing in receiving rapid COVID-19 tests. ASHA and Argentum, another industry group, have been working together to improve this situation.
Slow Assistance to Senior Housing Providers
- Last week CMS started disbursing funds to health care providers from the first $30B of the $100B COVID-19 stimulus package. Although the funds were first announced as ‘no strings attached,’ there may actually be strings attached. After a more detailed review, the funds are only to be used for healthcare related expenses or lost revenues specifically related to COVID-19. Healthcare providers will need to be vigilant in providing support for COVID-19 related expenses or losses in revenue if they want to keep this money.
Recent Stimulus Funds May Actually Have Strings Attached
- COVID-19 related deaths at nursing homes are rising at alarming rates. The actual death count is likely even higher due to those who have passed away without ever being tested. Experts are attributing the increase in deaths to staffing shortages, lack of testing, and lack of protective equipment.
Nursing Home Death Updates
- SNFs are being criticized for their handling of COVID-19 residents. However, one of the best ways to fight the COVID-19 outbreak is to increase testing. SNFs are not only experiencing a lack of testing and a shortage of protective supplies, but several states are also requiring that nursing facilities admit patients suspected or confirmed to have COVID-19.
Testing Nursing Home Residents
- The Department of Health and Human Services (HHS) received $100B to assist in financial relief initiatives. CMS announced the first $30B will be distributed to providers based on historical Medicare revenue.
CARES Act: HHS $100 Billion Fund Payout – No Strings Attached
- CMS has expanded the Accelerated and Advance Payment Program (AAPP) and provided $34B in the last week to healthcare providers. However, it must be noted that this is a loan that providers will be required to pay back through recoupment beginning 120 days after disbursement.
CMS announced they have already delivered $34 billion in Advance/Accelerated Payments – Strings Attached
- Providers struggle to obtain enough personal protective equipment and access to testing as is required by CMS’ new standards. They are asking CMS, members of the White House Coronavirus Task Force, and state governments for help in obtaining resources and funding to pay for the additional cost of those requirements.
Providers Need PPE & Testing to Comply with recent CMS Guidance
Compliance May Cost SNFs $10K+ per Day
- Due to the lack of preparedness, inadequate testing, and confusion on how the virus spreads, cases of COVID-19 in long-term care facilities have surged.
How Public Health Failed SNFs
- This article describes how an inpatient hospital in Syracuse, NY experienced a 41% decrease in census in the past 30 days. Without elective surgeries the past several weeks, census decreased considerably. Hospitals in non-“hot spots” may experience similar decreases if they took similar precautions in an effort to be in front of COVID-19 patient surge.
Hospitals without COVID-19 Surge
- This is a comprehensive update on how the Senior Living industry may be impacted by the outbreak. Operating expenses are increasing, whether it be for personal protective equipment (PPE) or labor costs. SNFs will see similar impacts. The effect on cash flow and net income could be substantial and will need to be watched carefully.
Deep-dive on how this is impacting costs for Senior Housing (ALF, IL, etc.)
- The state and federal governments are offering financial incentives to SNFs to turn their facilities into COVID-19 treatment facilities or to add COVID-19 wings to handle the surge in COVID-19 patients. This has not been received well by many family members or providers who feel that the incentives won’t cover the increased costs to staff the facilities.
COVID-19 Only SNFs
- Life Care Center of Kirkland, which currently has an overall 5-star rating on Nursing Home Compare, was the site of the first COVID-19 outbreak in the US. They were hit with a $611M CMP from CMS’s federal investigation.
- This article depicts the harsh realities that nursing homes are facing across the US due to this pandemic.
SNFs and COVID-19
- From a financial standpoint, Fitch Ratings outlined how REITs are dealing with the pandemic. They suspect most US healthcare REITs have ample liquidity but expect them to limit risk by reducing acquisitions and postponing development. Mergers and acquisitions across most industries, not just healthcare, may be quiet for a period of time until more certainty is restored to the marketplace.
Fitch Ratings: COVID-19 and REITs
- Due to the COVID-19 pandemic, many managed care plans have made changes to admission procedures. One change has been to suspend the prior authorization requirement for admission to a SNF. This change is not uniform across all managed care organizations (MCOs) and many MCOs question whether claims without pre-authorizations will actually be paid.
Managed Medicare Uncertainty
- CMS is cutting back regulations in an attempt to give providers more flexibility. This allows hospitals to temporarily expand outside of their normal walls including transferring patients to other facilities such as ambulatory surgery centers, inpatient rehabilitation hospitals, hotels, and dormitories, while still receiving hospital payments under Medicare.
Medicare Changes to address ‘Patient Surge’
- This article explains the confusion around whether therapy services in SNFs are considered “essential.” Some providers classify therapists as “essential visitors,” while others have told therapists to stay home. Another issue around therapy services relates to PDPM. The change to PDPM caused many providers to switch from one-on-one therapy to group therapy to reduce costs. With the ban on group activities, therapists have been forced back to a one-on-one approach.
Therapists – Essential or Non-Essential
- CMS announced measures to help protect SNF residents against the spread of COVID-19. These measures included banning most visitors and group activities such as dining and group therapy. CMS also waived the three-day inpatient hospital stay rule to receive 100 days of Medicare inpatient coverage in SNFs. This change is most likely to prepare for the fact that SNFs may soon be called on to provide relief for overburdened hospitals.
CMS Bans Most Visits to Nursing Homes