Now that you’ve had a chance to check out our top predictions for 2019, it’s time for a look back at the stories that shook the skilled nursing industry over the last 12 months.
In some ways, the year represented a continuation of the trends that dominated 2017 and the rest of this decade: Reimbursement pressures, closures, and bankruptcies made headlines all year long. But we also began to see the way forward in 2018, with the rise of regional powerhouses and innovative medical specialties previewing a future in which the SNF space isn’t dominated by custodial care.
Of course, we’d be remiss to ignore the ripple effects of the Patient-Driven Payment Model (PDPM), introduced this year and fast-tracked for implementation next fall. Operators and investors will likely spend the next decade or more sorting out the implications of the new reimbursement structure, with PDPM serving as a driver from everything to building sales to complete overhauls of providers’ medical capabilities.
Most-Read Stories of 2018
Skilled Nursing Operators Face Down ‘Unsustainable’ $2 Billion Cut — Far and away the most-read story of 2018 on Skilled Nursing News, this piece from February perfectly illustrates the fear and anxiety that has defined the industry in recent years. When the Senate unveiled its spending plan for the year, the 2.4% Medicare market basket increase came in under the industry’s expectation of around 2.7% — prompting real anger and concerns about what it might mean for the year ahead. Curiously, those concerns seemed to vanish once the 2.4% boost became firm reality and PDPM entered the scene, making this story a curious relic by the summer and fall.
CMS Overhauls Skilled Nursing Payment Plan, Increases Rate by $850 Million — The Centers for Medicare & Medicaid Services (CMS) ensured that 2018 would be remembered as a landmark year for providers and investors alike with the April announcement of PDPM, the new Medicare reimbursement structure for skilled nursing. In the same move, CMS trumpeted that 2.4% market basket increase, which will boost overall Medicare cash by $850 million in fiscal 2019, and claimed that PDPM will save providers $2 billion per year through lower paperwork and reporting burdens.
Skyline Healthcare Collapsing in South Dakota, Could Dissolve Soon — Digging through the avalanche of alerts that come into our inboxes every day, reporter Maggie Flynn tracked the unraveling of Skyline Healthcare, a New Jersey-based chain that emerged from seemingly nowhere to dominate the Midwest — only to collapse in spectacular fashion over the spring and summer. While Skyline wasn’t the only company to flame out in 2018, its rapid-fire rise and fall illustrated simmering problems in the industry as chains expand into new territories where regulators may not necessarily be prepared to weed out operators with fundamental issues.
Speech Therapy Poised to Take Center Stage in Skilled Nursing Under PDPM — The new Medicare payment model specifically focuses on the provision of therapy in SNFs, with a general goal of reducing unnecessary interventions and more closely linking reimbursements with complexity. Speech therapy appears to have an outsized role in the way providers will be paid moving forward: Unlike physical and occupational services, reimbursements for speech don’t decline over time under PDPM, and therapists told SNN that the benefits could extend to providers and patients alike.
Senior Care Centers Files for Bankruptcy, Blaming ‘Expensive Leases’ — Senior Care Centers was a late entrant in a year that also saw the bankruptcies of HCR ManorCare and Orianna Health Systems, but it was enough to boost the Dallas-based provider into the top five stories of 2018 on SNN. The move came after landlord Sabra Health Care REIT (Nasdaq: SBRA) reported not receiving rent since May and announced a plan to sell off all of its Senior Care Centers properties by early 2019; fellow landlord LTC Properties (NYSE: LTC) also urged SCC to reject its leases in bankruptcy so the real estate investment trust (REIT) can move on with new management.
Editor’s Picks: Alex Spanko’s Favorite Stories of the Year
In a Regional Era, ProMedica and Welltower Go National with QCP, ManorCare — The verdict on the year’s megadeal — Welltower Inc.’s (NYSE: WELL) acquisition of HCR ManorCare’s real estate in conjunction with new operator ProMedica — probably won’t come back for years. But whether or not it eventually proves fruitful to the REIT and its new partner, the transaction represents a bold, creative vision of the future: a vertically integrated hospital and SNF network that uses its existing capabilities, including an in-house Medicare Advantage plan, to eventually pitch its services to outside partners.
Skilled Nursing Providers Have One Shot at Payment Success Under PDPM — The headline specifically refers to the increased importance of residents’ initial assessments once PDPM takes effect, but it’s become a general truism the more the industry digs into the details. Accurately determining a patient’s needs and then providing the care will become essential to success, but providers also only have one shot — between now and October 1 — to optimize their operations for PDPM. A little more cynically, operators also might only have one shot at seeing increased reimbursements under the system before CMS wakes up and institutes cuts once the feds have a chance to break down the early provider behavior data.
Operators, Telehealth Providers See Skilled Nursing Promise in New CMS Proposal — Medicare currently pays for telehealth services only in rural SNFs, but 2018 saw the early signs of change on that front. CMS unveiled a flurry of proposals designed to make remote health services more accessible, including a rule that would expand physician coverage to include virtual check-ins and a plan that would allow Medicare Advantage providers to cover telemedicine directly with government dollars. It’s likely only a matter of time before CMS pulls the trigger and begins offering universal telemedicine coverage in nursing homes, and the benefits for providers could be significant if the technology helps them reduce hospitalizations and other costly interventions.
Reporter’s Picks: Maggie Flynn’s Favorite Stories of the Year
Skyline to Exit Skilled Nursing Space as Another State Takes Over – Skyline’s collapse in South Dakota drew by far the most views, but it was covering Pennsylvania’s takeover of the troubled company’s Keystone State facilities that proved the most interesting. Over the course of reporting on the takeover in Pennsylvania, it became apparent that one of the potential buyers of Skyline’s New Jersey facilities had ties to the collapsing operator. The New Jersey facility transfers were overshadowed by the more dramatic Midwest takeovers, but they still merit attention and serve as a fitting coda for coverage of the fall of a very strange company.
As Big Skilled Nursing Players Sell, a New Generation of Operators Rises – One of the earliest trends that emerged in covering the skilled nursing field in 2018 was the purchase of nursing facilities by individuals with a low profile who often hailed from the East Coast. Later in the year, SNN explored this phenomenon. It was a crash course in the realities of the nursing home market and how that plays out among smaller operators. It also provided a look at how unexpected trajectories open up for those in the skilled nursing field, particularly those early in their operating careers.
CMS Peels Back Curtain on Why Providers Receive PBJ Audits – Payroll-based journal (PBJ) staffing data proved to be a surprisingly hot topic for SNN readers, in part because of many questions that still surround the new process. After hearing multiple conference attendees ask about the audit process for PBJ data, SNN decided to dig into the details. The resulting reporting led to discussions with PBJ experts and some answers from the government about a process that looms large in the heads of many skilled nursing providers.