After Skyline, Mission Health Sees New Opportunity in Skilled Nursing Turnarounds

When Mission Healthcare Communities took over 15 distressed skilled nursing facilities in the state of Kansas last year, it leaders didn’t consider turnaround projects as a specific focus of its business.

At the time, the Tampa, Fla.-based Mission had one goal for the properties: to stabilize them and get them ready for new ownership.

The Skyline properties are still in receivership and not formally part of Mission Health’s portfolio. But the company has made a point of bringing in consistency, support, and services, so that the facilities will be ready for new ownership — whenever that transfer occurs, according to Tina Thomas, Mission’s senior vice president of operations, and Karen McDonald, vice president and chief clinical officer.

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Skilled Nursing News sat down with Thomas and McDonald to talk about the state of the Skyline portfolio, what the effects of the turnaround have been for Mission, and how the operator is getting ready for broader changes, including the Patient-Driven Payment Model (PDPM).

It’s been a little more than a year since Mission took over the Skyline portfolio in Kansas. Can you talk about the status of those buildings now?

McDonald: We still have them. We continue to manage them every day. We manage them well, we provide the support services to them, we provide consistency. But they still are in receivership. They have great employees; they were good sites and they just needed a home for a period of time, and that’s been us. I’ve thoroughly enjoyed working with the Skyline buildings.

The people who work in those buildings are Kansas people who work in Kansas.

I know there was a different set of properties Mission had taken over that were also a turnaround situation, but I didn’t get the impression turnarounds were a distinct business line for you.

McDonald: They were not.

Thomas: It keeps falling into our laps.

Now that you’ve done them a couple of times, will they become more of a strategy for Mission Health?

Thomas: Before Skyline, there was Deseret; again, kind of the same failed operations.

McDonald: The state called us on them. They called before they went into receivership, and they said, “Can you come operate these buildings?”

We said, “When?”

They said, “In two weeks.” So we got in the car, and we went and saw every building in Kansas, toured them, and what we found was a core staff — this is the Deseret communities, and many of them are still with us — who just needed a consistent home to be with. They’ve been great; we’ve had them for four years now, and they’re doing very well. We’ve had the majority of them have bronze quality awards from the [American Health Care Association].

We’ve taken these buildings from needing culture, to four years later applying for national quality awards and being deficiency-free, which never occurs in the state of Kansas. And we had three last year.

The Deseret facilities are no longer in receivership, right?

McDonald: They’re Mission Health-managed, we call them a Mission Managed.

Thomas: Yes. They’re a part of us, and then we expanded into Wisconsin and Minnesota right after that, 2014 and then 2015.

McDonald: In ’14, we took on the 15 Deseret buildings. Just as we thought we were getting settled, we were told we were getting this big acquisition in Minnesota. It came in January, and then we got another one in July, [in Wisconsin] that was three properties. So it was a whirlwind, just getting those buildings and getting them settled.

Have you run into any challenges in managing SNFs across so many different states?

McDonald: No, because our people who work in those states know those states. For example, our regional vice president in Kansas has been on the Kansas Health Care Association board, and Tina used to be on Care Providers of Minnesota, and we’re active in those states because we have local people in those states who are local. But centrally, I think our person who does clinical reimbursement, I think he understands all five of our states intimately.

Would you go beyond five states, do you think?

Thomas: Oh, sure. I think as we look at different opportunities and different states, it’s: Can we make it a local business? Do we have the resources? And is it a state that makes sense for us?

I think [president and CEO] Stuart [Lindeman] and the owners are very strategic about the businesses that they look at, and it’s not “grow to grow”; it’s strategic growth for a region, purposeful. So it makes sense for us.

How do you define a building that makes sense?

McDonald: From my standpoint, it would be the support. We used to have a building in Nacogdoches, Texas. Well, it didn’t make sense to have a nurse assigned to Nacogdoches — I would take it on because my nurses are based in Georgia or in Tennessee or in Kansas. Having one building in Texas didn’t make sense.

To me, it’s where you get synergies. Now could we be in Missouri? Absolutely. We have synergy for that because we’re in Kansas. Wisconsin makes sense; we have Minnesota. Tennessee-Georgia, that’s a drivable distance. So it’s just a resource utilization place for me.

And there are some states that are highly litigious and hard to do.

Thomas: Yeah. From a reimbursement perspective, regulatory perspective — those are the things we look at to see if it makes sense.

Are there common features you see in facilities that are on the market or looking for a buyer?

Thomas: This is, I think, a big topic in our profession. Stuart’s been kind of vocal about this, too — that as out-of-state providers go into different states that they’re not familiar with, how do they get vetted before they go into the state? If they don’t buy the properties, if it’s a lease type of deal, how do they make sure that the agreement is appropriate for both sides?

Because a lot of times, we see that going upside down. And then they’ve over-promised and then they can’t make the lease payments, and then can’t pay payroll, and all of the things that go along with that.

McDonald: Very urban providers taking on very rural [facilities] is hard.

You’ve mentioned the vetting of out-of-state owners, and Kansas did pass a law overhauling the regulations on that front. Is there a similar movement in any other states?

Thomas: I know Minnesota — when we stepped into that state, the owner, the operator, and the manager go on the nursing home license, which I think is a big deal. And other states are talking about it. I think Nebraska’s looking at it.

McDonald: Well, that’s because it was all from Skyline. They touched so many states: South Dakota, Nebraska, Kansas, Arkansas, Pennsylvania. The states are now saying, “Wait a minute, they’re not going to make their payroll on Friday, and we need to do something because we’ve got 100 of our beneficiaries sitting in there.” And they’re the state’s residents, if they’re on Medicaid. And they need to continue operating.

Moving away from Skyline, we’re just a few months away from the arrival of PDPM. How is Mission preparing? Is anything going to change for you?

Thomas: We have a vice president of clinical reimbursement who’s –

McDonald: -second to none.

Thomas: –probably one of the best we’ve ever worked with, and he started talking about this as the rule was coming out and started to train up on it. In our space, it seems like every 10 years, there’s a major shakeup in reimbursement or whatever it is, so we’re going through it again.

There will be kind of a survival of the fittest, and I don’t think it’s a game-changer, so to speak. This is really is going to be getting reimbursed for what we’re doing.

McDonald: Going back to the nursing model: We kind of relinquished our payment system into the therapy model, and we’re going back to being nursing communities. Not that we won’t have therapy, because we will, but we have a director of clinical innovations and she creates programs so we’ve done [tracheostomy services], sepsis. Parkinson’s is just about done, chronic obstructive pulmonary disease, respiratory stuff.

We create the assessment so that when somebody’s diagnosis is triggered on admission they get this protocol — so we’re able to make sure that we’re looking at the right things that we need under PDPM to capture those costs.

On the same side, we’re doing the nursing education, documenting our [electronic health record] all the way up to the time that they discharge. Then we’re doing the calls post-discharge. A nurse does the first call, because if somebody’s going to come back in the first 48 hours, it’s going to be for an illness.

After that, we let the social worker do it and have them call, because during PDPM, we want this full continuum from pre-admission: knowing what they’re coming in with, get the protocols in place to take care of them, capture that information to get paid, then on the back-end, make sure they either stay home or come back — not languish out there [and] go to an emergency room.

Does that entail any changes in how you work with hospitals?

McDonald: We have to get the discharge document almost immediately. We need those diagnoses on admission. It really matters. If someone has Parkinson’s, we need to know from Day 1. Sometimes we’ll get a discharge order from the hospital, we’ll get their orders, and then they wait to dictate their progress note, and we might not get it for a day or two.

We need it on admission.

Do you have to go to them to talk about this?

Thomas: Sure, and then how to integrate into the system — which is a big deal in the space too, because interoperability is crazy.

How have they been reacting?

Thomas: I think it’s the same. We’ve been having those conversations because we want the information as soon as we can get it, and we’ve got liaisons in the field that can help drive that communication and drive the paperwork.

McDonald: The hospitals want to discharge these folks too, with these high nursing needs. A lot of skilled nursing — not necessarily us — had gone to the therapy, the nice safe place for their residents. We actively made sure our nurses are trained in IVs and trachs all along, so we’re not scared of that. And I think the hospitals know that, and that’s really what’s going to help us.

How about Mission’s plans for the rest of the year — are there other plans for properties in distress?

McDonald: Well, I think that’s a business line for us. It fell in our laps, but we do a pretty dang good job on it. We have 20 in that area right now, plus a temporary management.

That’s a little different from the usual line of SNF work.

Thomas: It is a little bit different. And I think that’s why Stuart structured it a little bit differently, too. So he’s got the ops person, we’ve got the clinical team when that business grows and expands — because it’s not a forever business.

There is opportunity, and we do a nice job of stabilizing, holding in place, and then for Mission, in general, I think strategically we see growth, but again: prudent growth and what makes sense. And in the post-acute space, it makes sense to diversify a little bit.

This interview has been condensed and edited.

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