HUD’s Rosewood Crackdown, Counting on ‘Parking Lot Guy’: Overlooked Stories of 2020

The year 2020 will be forever marked by a disease named for the year prior to it, especially for the skilled nursing sector.

COVID-19 dominated the headlines at outlets and publications ranging from here at Skilled Nursing News up to the New York Times.

In a deluge of updates and regulatory changes, keeping track of what was going on week to week and month to month became a herculean task, and the top stories of the year highlight our readers’ need to be aware of the most pertinent regulatory and financial updates.

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But there were other stories in the sector, sometimes overlooked in the tidal wave of hard news updates, that shed light on some of the challenges the sector faced beyond the immediate crisis of the pandemic — and suggest some ways SNF providers can chart a path forward.

SNN has rounded up some of those stories that didn’t necessarily generate thousands of views or feature major headlines. They were chosen because no matter what they covered, they illustrate critical issues springing from the past and reaching into the future — but issues just far enough away that they run the risk of being overlooked or forgotten.

‘HUD Tightens the Screws’

In 2019, the New York Times covered the largest loss in history for the Department of Housing and Urban Development’s (HUD) loan guarantee program for SNFs.

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That story zeroed in the $146 million default of the nursing home chain Rosewood Care Centers, and put Section 232 of the National Housing Act — which began in 1959 and authorized the federal government to insure mortgages for nursing homes — into a bright spotlight.

The government responded, as this February 19 story illustrated.

“What Rosewood did, in HUD’s mind — it’s a 180. Anything that was a gray area, or not as heavily investigated — those days are long gone,” Joshua Rosen, senior vice president and managing director at HUD lender Walker & Dunlop, said at the eCap health care conference in Doral, Fla. “If you’re a one-star building, if you have survey issues, if the abuse tag is up — a bridge lender may not put the stop sign on you. [With HUD] I don’t want to say it’s a non-starter, but it’s a very difficult, comprehensive process to get those deals done today.”

At the time of the Rosewood default, HUD pointed out that the that defaults represent less than 1% of its overall senior housing and care lending portfolio. But it expanded its vetting process to encompass the holistic performance of a potential borrower’s portfolio and operational track record, and there is no reason to think it will become less stringent for future borrowers in the aftermath of COVID-19.

Keeping the Spotlight on Nursing Homes

By April, it was becoming apparent that COVID-19 was a natural disaster unlike anything health care had ever seen before — the word “unprecedented” got a workout over the course of the spring — and its effect in nursing homes particularly virulent.

The first major outbreak in the U.S. took place in a nursing home in the state of Washington, with a staggeringly high toll.

The first case was identified on February 28; by March 9, the facility was linked to 129 positive COVID-19 cases, including 81 of the 130 residents, 34 staffers, and 14 visitors, according to the report; the death toll of 23 that date represented 27.2% of residents and 7.1% of visitors, though there were no deaths of staffers.

Over the course of spring, outbreaks in SNFs began to rise — and eventually, so did deaths. And as March turned into April, nursing homes were beginning to fall under increasing scrutiny and criticism.

SNN editor Alex Spanko called on SNF providers to seize that scrutiny and criticism in this April 27 editor’s take, pointing out that the financial and clinical realities of nursing homes are often overlooked — not out of malice, but only seeing one aspect of the sector.

“Instead of shying away from the spotlight, and hoping it’ll go away with a few carefully worded ‘no-comments,’ post-acute and long-term care leaders must grab the microphone and not let go until the media glare invariably drifts elsewhere,” he wrote. “My current fear is that the wide network of stakeholders in senior care — operators, residents, regulators, lawmakers, lawyers, families, and anyone under the age of 65 today who might need that kind of care in the future — won’t learn much of anything from this crisis.”

The spotlight hasn’t gone away, but the lessons learned have been uneven. A few weeks before that editorial was published, headlines from the New York Times to NBC News and USA Today were estimating the death toll at nursing homes to be anywhere from 2,000 to 3,000, with clear horror at the numbers.

By the end of November, the death toll in nursing homes was estimated at at least 100,000. And though operators have a much better understanding of COVID-19 now than they did in the early months of the pandemic, and the federal government has sent both financial and testing support to nursing homes since, the reviews of both SNFs and the government’s performance has been mixed, to say the least.

Operators have unquestionably done heroic work over the past several months of the pandemic, work that is easily overlooked by the U.S. health care system’s overall structure around acute care. But they have to find ways to ensure that they make their voices heard, to show the problems they face and advocate for solutions — for their own sake and the sake of the patients they serve.

‘Parking Lot Guy’

Data became a byword for health care providers in COVID-19 as the best way to illustrate outcomes and operations generally. And there is definite value to hard numbers for securing help on such critical items as staffing hours, personal protective equipment (PPE) stockpiles, and testing access.

But sometimes a good story is worth a thousand data points. And no story better illustrates the wild struggle for PPE during the thick of the pandemic than that of one non-profit senior living provider’s best vendor.

“Amid a global pandemic that laser-targets vulnerable elders, one of the most reliable PPE sources for a provider in the New York City suburbs is a man whose name remains unknown even to its CEO,” begins this May 7 story. “He is simply “Parking Lot Guy.”

And it was Parking Lot Guy who became a critical source of PPE for the nonprofit Jewish Home Family, which provides skilled nursing, assisted living, and other senior care services in Bergen County, N.J.

“He’s actually met with us in parking lots,” Jewish Home Family CEO Carol Silver-Elliott said during a virtual event hosted by trade group LeadingAge. “We’ve been able to take a deep breath and wire money to bank accounts we’ve been told to wire money to, and the supplies thankfully have appeared — and have also been of good quality.”

CMS Formally Scraps MFAR

Going into 2020, one of the most pressing issues for providers in a handful of states was the Medicaid Fiscal Accountability Regulation (MFAR), which was proposed in November 2019.

The rule put billions of dollars at stake for SNFs that depended on various Medicaid supplemental payment programs to bolster low rates for skilled nursing care. Provider opposition was vociferous — the comment deadline on the rule was actually extended from January 17 to February 1 of this year to accommodate those who wanted to weigh in — as was the Center for Medicare & Medicaid Services’s (CMS) opposition to the opposition.

The debate over MFAR went on even after COVID-19 upended the SNF sector; an aid bill proposed in May contained a provision that would have kept the government from enacting the regulation during the pandemic, and in July, a range of organizations called for MFAR to be revoked as part of a push to bolster Medicaid.

In September, CMS came around.

Overcoming Vaccine Skepticism

With an emergency use authorization (EUA) from the Food and Drug Administration (FDA) granted to Pfizer’s (NYSE: PFE) COVID-19 vaccine on December 11 and Moderna’s (Nasdaq: MRNA) (assuming it will be approved by the time this is posted) on TK TK TK TK, the end of the long-term care sector’s ordeal is in sight. That’s because the Centers for Disease Control and Prevention endorsed prioritizing both health care workers and long-term care facility residents for the first rounds of shots.

But that assumes they want to be vaccinated. And at least front-line staffers are extremely hesitant about being the first in line, according to Lori Porter, the the CEO and co-founder of the National Association of Health Care Assistants (NAHCA).

For frontline staff traumatized by the toll of COVID on both their patients and their coworkers, as well as the institutional stumbles of the federal government on many levels, there is concern about the speed at which the vaccines were developed, and uncertainty about what information can be trusted, she explained.

“My concern is not necessarily the vaccine, if it’s proven safe,” Porter told SNN. “My fear is that if we don’t educate them, if we allow the facilities to provide the education on the vaccine, there is a trust issue. CNAs do not trust their leaders.”

Trust cannot be built overnight, and SNFs have very little time; the partnership between the federal government and two major pharmacy chains to distribute COVID-19 vaccines is already in motion.

How soon SNFs come out of their 2020 nightmare depends in large part on how well they can address their staffs’ concerns — without alienating them still further, and while stressing the paramount importance of using every tool possible to keep themselves and residents safe.