Genesis HealthCare (NYSE: GEN), one of the largest post-acute operators in the U.S., reported one confirmed case of the COVID-19 disease at one of its facilities, in an otherwise optimistic fourth-quarter and year-end earnings call for 2019.
The Kennett Square, Pa.-based operator, which has hundreds of skilled nursing facilities and assisted and senior living centers across the country, has taken heightened steps related to infection prevention to tackle the threat of COVID-19 — the illness caused by the novel coronavirus that has swept the globe since late last year and shaken the economy at nearly every level.
Specifically, the operator has set up internal e-mail hotlines that are monitored in real time, educated employees on the illness and on its travel and sick policies, and restricted visitation to all Genesis facilities, with arrangements under way to set up videoconferencing between family members and residents, according to Dr. Richard Feifer, senior vice president at Genesis and chief medical officer at Genesis Physician Services.
*The provider has also implemented enhanced screening, with all entrants — employees included — directly assessed for symptoms of COVID-19 by taking temperatures and asking questions about symptoms and travel history before they are permitted into facilities. In addition, Genesis has set up hand sanitizer dispensers in each patient room.
“All that said, at this time, we have a single confirmed case of COVID-19 in one of our 387 centers,” Feifer said on the call. “Rest assured, we are working diligently to minimize any potential spread, but we are also preparing should any more of our facilities experience the coronavirus.”
That one facility “obviously has an admission ban,” but in terms of the company’s wider census, there isn’t yet a material impact, Genesis CEO George Hager said on the call. But he noted the full effects of the virus are still playing out on both a national and company level.
As the coronavirus pandemic unfolds, Genesis is working with local departments of public health — the operator has locations in 26 states — to follow their protocols and guidelines, with the goal of slowing the virus’s spread.
During a Friday press call, Centers for Medicare and Medicaid Services Administrator (CMS) Seema Verma noted that one of the ways to help ease hospital burden would be for SNFs to take on overflow from hospitals, a move the government is trying to facilitate through a waiver of the three-day hospital stay requirement for Medicare coverage of SNF care.
Genesis has been hearing from its hospital partners that the goal is indeed to discharge patients to create capacity, and so it is working closely with its hospital partners to make sure that patients transferred present no risk — and that the centers that would take them have no infection risks, Feifer said.
In terms of its longer-term outlook, Hager emphasized that while COVID-19 presents short-term concerns, Genesis sees overall improvement for 2020 as a whole. He particularly touted the success of the LTC ACO, Genesis’ venture into value-based reimbursement through the Medicare Shared Savings Program (MSSP), which announced a slew of outside partnerships at the end of 2019 and the beginning of 2020.
The LTC ACO has contracted with more than 75 primary care providers serving the residents of those new facilities, and it is designed to pass on no downside risk, Hager noted. The ACO expects to bring on 3,000 additional lives by the end of this year, he added.
“LTC ACO presents a unique and meaningful opportunity for growth in the future,” he said.
Genesis was also upbeat about how it is faring under the Patient-Driven Payment Model, which took effect for SNFs on October 1, 2019. After operating for five full months under PDPM and adjusting for the 2.4% market-basket increase, Genesis has seen an increase of about 5% in its average Medicare rate per patient day from the prior Resource Utilization Group (RUG) system, Genesis chief financial officer Tom DiVittorio said on the call.
“On the rehab side of PDPM, we successfully met our goal to offset — dollar-for-dollar — the impact of third-party contract pricing changes, by adjusting our labor model and better leveraging more cost-effective modes of delivery, such as group and concurrent therapy,” DiVittorio said. “These actions also serve to reduce the cost of delivering therapy services in our own Genesis SNFs by $6 million in Q4 2019, or 80% of the annual run-rate savings we anticipate.”
Overall, Genesis is optimistic about PDPM, he said.
“Although it’s still early in the transition, we are increasingly confident that PDPM is a viable reimbursement model for the future, a model that more effectively accounts for the broad array of medical complexities and care needs of our patients,” DiVittorio said on the call.
Genesis reported a net loss of $11.4 million for the fourth quarter of 2019, and a net income of $14.6 million for the full calendar year.
*After publication of this story, Genesis clarified that the script for its earnings call was outdated, and the story has been updated to reflect the operator’s current screening procedures.