Medicaid’s Behavioral Health Benefits Can Boost SNFs’ Bottom Lines

As long-term care providers grapple with reimbursement pressure, some skilled nursing facilities are seeing success by adding behavioral health services to their roster of offerings.

But to do that, they have to navigate a host of regulatory and staffing hurdles, the former of which can vary in intensity from state to state.

Of 230 Colorado nursing centers, just 27 are able to take on patients who need behavioral services, Doug Farmer, president & CEO of the Colorado Health Care Association & Center for Assisted Living, said Monday at the 2018 American Health Care Association Convention & Expo in San Diego. And many of those locations are operating at capacity.


“Funding by itself is not our major issue,” he noted. “It’s regulatory for us.”

Elaborating on this point, he noted that Colorado’s regulations for behavioral health care attempt to ensure both resident safety and security, as well as the the provision of a homelike atmosphere. Those two components don’t come together easily, Farmer said.

Still, there are payoffs. For one thing, the demand is high.


“There is a significant population that needs the care, and we’re searching for options,” he said. “They’re very difficult to place, and to date, there are still very few centers in Colorado that are willing and able to care for this population.”

The reimbursements Colorado provides for behavioral health allow the Vivage Senior Living: Denver North Care Center to provide the activities, outings, and other services that help improve the lives of the residents, according to administrator Tami Kendall. The 83 bed-skilled nursing facility is currently 95% Medicaid funded, and the average resident age is 63, though the ages range from 30 to 87.

The Supplemental Behavioral Services Program has several requirements that facilities have to meet, some of which might be more difficult than others. In a world of staffing shortages, facilities interested in receiving behavioral add-ons to their Medicaid rate through the program have to have enhanced staffing. This includes having a social worker presence and training programs that range from crisis intervention and behavior management to psychotropic medication training.

Facilities also need to have a good relationship with local mental health providers. More than that, they need to have a completed agreement with such centers to provide treatment.

This component is crucial for success in the program, Kendall said, especially emphasizing the need for 24-hour crisis services.

“Having this piece is what makes some of these folks safer, and not having this, in my opinion, makes it much more dangerous,” she said.

The costs of the program include a $15,000 monthly budget for the care team, which combines social and activity work, a $4,000 training cost for crisis intervention that recurs every three years, and the costs in both dollars and hours of employee training.

In Colorado, the add-ons come on top of a fairly generous average Medicaid rate: $227.50 per day for Medicaid residents, compared to a national average of $208 in the second quarter of 2018, according to the National Investment Centers for Seniors Housing & Care (NIC).

*The total add-ons in dollars for the 27 Colorado facilities that take part will be $5.5 million for 2018-2019, Farmer said.

For states that don’t have such a generous Medicaid rate, behavioral health can still be a lifeline. In the state of Washington, SNFs have begun to add behavioral health services, or have changed operations from skilled nursing to behavioral-focused assisted living, to deal with the pain of low Medicaid rates. In Arizona, which only has a managed Medicaid program and where occupancy is trending sharply downward, SNFs are taking a similar track, according to Larry Litman, the president and owner of consulting firm Healthcare Systems & Services.

While traditional skilled nursing patient days have dropped sharply in Arizona from 2011 to 2017, specialty days have gone up by more than 80,000 in the same time frame, he said. While there is no data indicating the proportion of behavioral health days in that total, Litman noted that just a few SNFs in the state provide ventilation, bariatric, or other specialty services.

And when it comes to behavioral patients, SNFs in Arizona could have an ally in managed care organizations — if they provide a means to move patients from acute care to a lower-cost setting.

“By moving their population into lower-cost settings, they can absorb population growth,” he said. “In this case, SNFs are seen as part of a solution.”

*An earlier version of this story gave the number of add-ons as “$5.5 billion,” rather than the correct number of $5.5 million. Skilled Nursing News regrets the error.

Written by Maggie Flynn

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