Bottom Line: Golden LivingCenters’ New CFO Sees Common Ground Between SNFs, Hospitals

Bridging the gap between hospitals and skilled nursing facilities has been a hot topic for providers in the nursing home world for some time.

But even as partnerships on patient data and care transitions move forward, there are other ways a hospital and a SNF might be able to find common ground, according to Larry Heydon, the new chief financial officer at Golden LivingCenters — Indiana.

The company has 23 locations offering services that range from skilled nursing to hospice.

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Heydon joined the SNF provider earlier this month after 11 years at Johnson Memorial Hospital in Franklin, Ind., as president and CEO; he also served as the hospital’s CFO for six years.

He’s entering the skilled nursing world on the cusp of a major Medicare reimbursement overhaul, in a state that has made use of creative programs to help boost Medicaid reimbursement to SNFs.

Skilled Nursing News caught up with Heydon to talk about his plans for Golden LivingCenters, the state of preparation for the Patient-Driven Payment Model (PDPM), and on what the acute and post-acute sides of health care have when it comes to financial pressures.

SNN’s regular Bottom Line series profiles chief financial officers and other executives who focus on the business of skilled nursing. Know someone who’d be a good fit for a Bottom Line Q&A — or want to nominate yourself? Drop editor Alex Spanko a line at aspanko@agingmedia.com.

Why make the move from acute care to post-acute? What drew you to this role?

One part of the answer is the finance side has always intrigued me, with my upbringing [at Johnson], and I always stayed very close to the financial aspects of operations. And as I was looking at opportunities here, I knew I wanted to stay in central Indiana. I tell folks, I’ve been married 29 years and there’s a reason why: My wife’s very content to live in central Indiana and it’s where we raised our kids.

So my whole goal was to stay in central Indiana as I looked at opportunities, and while at Johnson, we had the fortune to collaborate with many long-term care facility partners — a lot of collaboration related to the managed care aspects, lot of collaboration related to training and education, and so forth.

Through that, I developed a network of contacts, and as people found out I was looking at my next opportunity, I was obliged to contact Golden Living and lo and behold, there was a very important shift within a month.

I decided: This sounds pretty intriguing, and hit my main objective to stay in central Indiana. Plus, this is a very progressive organization that allows a lot of opportunity on many fronts, not just the financial side.

I hope to do more on the revenue side than I hope to do on the expense side. I think that’s where our current president, Wesley Rogers, really sees the opportunity for me to enhance things is on the revenue side, given my connections to the hospitals, given my connections in general to the state of Indiana.

What have you seen on the acute care side of business that you’re looking to use in your work with Golden Living?

There are so many parallels between the acute side versus the post-acute side. We’re all facing reimbursement struggles, trying to maximize reimbursements out there. Obviously, there’s a big focus to reduce utilization — whether it’s hospital stays, whether it’s long-term care days. So the same pressures are out there.

Different opportunities are involved, but at the same time, still the same opportunities to make sure we document properly, maximize what services we do provide. So many times we provide a great service, and it’s only as good in the eyes of the payers as how well we document. So much like we had to do on our hospital side, obviously we need to document and make sure our nurses, our caretakers do their part to get properly recognized for that effort.

You’ve touched on the similarities of what acute and post-acute face; what are some of the differences?

The post-acute side is much like the acute side was 20, 30, 40 years ago, where most of the business was on the inpatient side. There was extended length of stay — 20 days, 30 days. Now the acute has gone more to an outpatient basis, where you have that focus on the outpatient care; length of stay averages around three to four days.

So coming to the long-term care side, the mind has to adjust to: Yes, we are taking care of patients on a longer-term basis, there’s a different set of dynamics involved with that. And in the end we’ve got to realize that the family’s going to be more involved in the decision-making, that the family’s going to play a greater role to make sure their loved ones are properly taken care of.

What are some of your top priorities coming into this new role?

A lot of hard work’s been done over the last few years to stabilize the operations. A lot of hard efforts have been done before my arrival to make sure the emphasis is on documentation and make sure we maximize our reimbursement.

Honestly, my arrival is going to add more input to how we address the labor market. Obviously, supply/demand is not in favor, related to the number of nurses that we need and so forth. So I’ll be able to add insight to that, make sure that we go about this in a very factual-based way [and] do the right thing to retain employees that don’t jeopardize the overall operations through that.

Also I’ll look forward to the top line, the revenue side — trying to increase those referrals from the hospitals that I obviously corresponded with, interacted with for many many years.

And outside that, just continue to learn the system make sure the end users have the day-to-day needs met to make sound decisions. Our culture is one where each of the admins are to be their own CEO, but we know they’re not necessarily accountants in nature. So our job is to make sure they get the data they need to make sound decisions, and we as an organization have a proper level of information out there among the 23 homes that we oversee.

Skilled nursing is gearing up for the implementation of PDPM, and it’s a major change. What are some of the things that you’ll be keeping an eye on at Golden Living over the next several months, in terms of the financials?

Luckily CMS did give us advance time to prepare. It was not dropped upon us, and CMS, to their credit, they allowed input and feedback before the official change takes place. So with that, we know what we’re facing.

The preparation, the training — I found out day one on the job, that this is being emphasized. Just over the last three days, we’ve been traveling across the state where we’re having these regional PDPM sessions going on, with in-depth training that’s occurring with the top leadership. So there’s definitely a focus on this.

What I’ve learned, and I think our teams learned, is yes, there’s a change involved; it’s going to require additional documentation steps. The current RUG system is one that requires documentation, but there’s less factors at play; this adds quite a few more factors in play. It’s a higher emphasis on the nursing documentation. The previous system put a lot of emphasis on the therapy documentation, the therapy scoring. It’s equal, if not more, on the nursing side.

So a lot of these things, we’re already doing. We just have to increase the intensity of the documentation, but going out of the gate, with this 10/1 day facing us, I think we have an overall good handle on it. It’s definitely been emphasized as an organization.

Have there been particular areas of focus?

When you look at the framework on the therapy side, the physical therapy, the occupational therapy, that’s actually pretty well similar to what we’re doing now. On the speech therapy side, there’s more factors involved; those extra steps have to be taken on the speech therapy side.

Nursing is pretty straightforward, similar to what we have been doing — but one of the key areas has been the NTAs [non-therapy ancillaries], trying to make sure we maximize the NTAs, because there’s a lot of reimbursement involved there. It can be a big component.

The factors they use to determine payment can range from one to four, so you have a chance to really maximize the weight based off of how well you understand the factors at play. So I would say NTA is a key area of focus for us to maximize.

Moving to Medicaid, does Golden LivingCenters participate in any way in Indiana’s upper payment limit program for Medicaid? What are your thoughts on that program and the role it plays for Golden Living?

Without getting into the weeds on this, I can tell you that yes, Golden Living does participate. I think 99% of the homes in Indiana do participate in the program. Indiana’s a state that generally does have an upper hand, compared to other states, because the base Medicaid reimbursement is a little bit higher. It still does not cover costs; obviously this program allows that cost to be better covered. The purpose of the program is to recognize that the aging population and disabled population require the same level of services as the higher-paying categories.

So through this program, we are seeing the actual quality increase. We’re seeing clear measures of that — with the various surveys, various scoring that goes on, that quality has increased because of the evolution of the UPL program in the state of Indiana.

What are some of the big-picture issues that you’ve focused on in the nursing home world, and then how are you thinking about them as you go into this new role? What are you thinking about for the future, and what are you trying to prepare for?

I think it all starts with the volume, this increased focus by the federal government to decrease utilization. The number of beds across the nation definitely are high; at the same time, we know we have an aging population. So trying to find balance on what is affordable for our government versus what needs to be provided to this aging population is going to be key.

We feel that we are going to have to look at every one of our homes, look at the excess capacity that we may have and try to figure out what to do with that excess capacity. There may be consolidation opportunities, there may be other opportunities out there.

But right now, we’re growing the census at the homes, so that’s not even on the radar right now. It’s just a matter of trying to maximize the vacant beds that we have, which are slowly but surely being filled. Then the biggest part of that is then trying to get the labor in place to meet the increased needs.

But I think we’re always going to face volume challenges, just because the government feels — whether rightly or wrongly — they just feel that there’s too many beds out there, in use.

When you say you’re growing census, is that primarily rehabilitation patients coming off of a hospital stay? Or is it an increase of those with long-term care needs?

It’s definitely an emphasis on those long-term care patients. Obviously we’ll take and work very hard to maintain the hospital referrals for those short rehab stints, but the focus is definitely on more of the long-term care community referrals that are out there.

Obviously that involves relationships; it involves the knowing where the referrals points are, [and having] stable staff in place to go out there and foster those relationships.

We see a lot of development on the transitional care front, so is the plan to keep that long-term focus, or target short-term rehab? How are you balancing those two?

You’ve hit the key word there: It’s balance. [We] definitely do not put an emphasis on the rehab care versus the long-term. If anything we may be tilted more recently towards the long-term care side, but both sides present opportunities, and it’s a balanced approach.

And that goes to infrastructure improvements; we recognize that we have to account for needs on both sides — equal dedication to both sides from an infrastructure standpoint.

This interview has been condensed and edited.

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