As Admissions Stall and Aid Dries Up, ‘Losses are Coming’ for Nursing Homes in ‘Bleak’ First Half of 2021

The steps taken by regulators to cut red tape for skilled nursing facilities during the COVID-19 pandemic have been extremely helpful in stabilizing operations, and the financial support from various rounds of stimulus funds has kept balance sheets steady.

But with COVID-19 surging again in many parts of the U.S. and occupancy seemingly flatlining, the future could be dire for SNF providers, according to a panel of experts on a webinar hosted by Skilled Nursing News and sponsored by pharmacy technology provider SRX.

“Industry-wide, we’ve had someplace between — any of the numbers you look at, we’ve had 10% to 20% drop in census across the board,” Jay Moskowitz, the president and CEO of Vivage Senior Living, said on the webinar on Tuesday. “Not all through loss of life, but the patients who are not coming into our facilities anymore due to COVID. [That] could take years to recover. So even though we’ve gotten help from the government, I don’t know if that’s going to be enough to get us through the challenging time that we have up ahead.”

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Vivage operates roughly 30 facilities in the state of Colorado, which until a few weeks ago had a very strict policy on any kind of positive result for COVID-19; when one staff member tested positive in the state, a 14-day lockdown was required. That changed three weeks ago, he said, but it was still a major hurdle.

The lack of visitation represents a census challenge unto itself, explained Steven Boulware, managing partner at Priority Management, which operates SNFs, long-term acute care hospitals, and one assisted living facility in Texas and Louisiana. People who might have moved into a nursing home, or placed their loved one in a facility during more normal times, are now afraid that doing so will mean they never see that person again.

And hospital referrals, which ground to a halt when elective surgeries were suspended during the spring, have not rebounded. A September study from the Washington, D.C.-based consulting firm Avalere Health found that while hospital discharges were on track to return to their pre-pandemic levels, discharges to the SNF setting were on pace for a lasting decline compared to hospital volume and discharges to home health.

One of SRX’s business lines is rebate administration, which gave the technology company a window into its clients’ census, co-founder and CEO Scott Taylor said on the webinar.

“What we saw was in April, everything fell off a cliff,” Taylor said. “And then we started to get a little bit of hope on our clients’ behalf, because June, July, August, all were on an upward trajectory. The slope wasn’t super steep, but it wasn’t de minimis either. The admissions numbers were coming back up. And now it’s flattened out.”

The federal support from the Provider Relief Fund created by the CARES Act have helped providers survive thus far, but even those have questions attached, as Boulware noted.

“We got the stimulus, which is great, but we don’t know exactly how — is it going to be taxed, are we going to be able to hold that on our balance sheet through next year?” he said. “I can tell you, the losses are coming. They’re starting to come now for us, and I’m looking — unless something happens with census — a pretty bleak first quarter, second quarter of next year … Hopefully, they’ll allow us to use the stimulus to offset next year, because this year has not been horrible. Next year could be really bad, financially, for us.”

Striving for continuity, preparing for ‘an inquisition’

Amid the aftermath of the recent election, a top priority for the nursing home lobby will be maintaining continuity from the Trump administration to the Biden regime, Clifton J. Porter II, the senior vice president for government relations, at the American Health Care Association (AHCA), stressed on the webinar.

And while providers have to consider what they need in the short term, they have to be thinking about the potential repercussions, he said.

“There is going to be an inquisition after all this is said and done,” Porter warned. “There is going to be a look-back. There’s going to be an evaluation. The government is going to look at this very closely.”

Boulware had discussed staff bonus payments as an example of strategies to retain workers, and Porter stressed the importance of making sure any government funds used in this way are “traceable and documented.”

If Porter has discussions with a member of Congress — or needs to participate in a hearing — being able to say the stimulus funds were used to pay staff or buy personal protective equipment (PPE) will make it easier, he said.

“I always like to say to all the operators on the phone: Always think about, if I had to be at a hearing, if I have to sit at the dais at a hearing, could I effectively defend and provide support for the actions that I took? If the answer is ‘yes,’ then you’re taking care of me. If the answer is questionable, you need to re-evaluate your strategy a little bit,” he said.

And even before the hearings, SNFs will be facing a serious uphill battle within their own communities, Moskowitz said — even if a future vaccine proves successful.

“It’s going to take our industry a long time to rebuild consumers’ trust that we can provide a safe environment for their loved ones,” he said.

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