Diversified Service Lines Make SNFs Better Positioned for Post-Pandemic World

Skilled nursing facility operators and others in the senior care industry with diversified service lines are in a better position to care for residents at this point in the pandemic — and in the future.

Operators with a diverse payer mix also have an edge, long-term care experts told Skilled Nursing News.

Broadly, operators have worked to expand their reach to other parts of the aging population through partnerships or outright ownership of various care assets, with Medicare Advantage (MA) and managed care organizations viewing such expansion in a positive light.

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Enrollment in Medicare Advantage has doubled over the past decade, according to the Kaiser Family Foundation, with nearly 40% of all Medicare beneficiaries enrolled in MA last year.

Additionally, Paycheck Protection Program (PPP) loans and other COVID-19 relief funds are anticipated to sunset as vaccination campaigns continue, meaning operators will need new service lines to help offset pandemic-related occupancy disruption.

SNFs received $7.4 billion in CARES Act funds last year, according to data released by the Department of Health and Human Services (HHS).

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Palliative care patients and those looking to receive care at home are potential new clients for leaders in the nursing home industry, as these services closely align with skilled nursing care, Ryan Beddingfield, chief clinical officer of PruittHealth, told SNN.

The family-owned, Norcross, Ga.-based operator has an existing home health service line and palliative care program, officials said.

Pruitt manages more than 180 skilled nursing centers across Florida, Georgia, North Carolina and South Carolina. The operator offers post-acute care, home health services, hospice, therapy, pharmacy and infusion therapy across the Southeast.

“Those individuals who are in between that gap, but not necessarily hospice-appropriate patients, just individuals with chronic conditions that need assistance through the palliative care programs, … we’re seeing an increased demand in palliative care,” Beddingfield said.

Operators like Pruitt are getting in on the medication supply chain too — the company is set to complete its medication supply warehouse by September.

Pennsylvania-based Bedrock Care Group plans to extend services to include hospice and home health care while keeping skilled nursing as its core business, COO Jaime Verger told SNN.

“You’re always, as an operator, feeding yourself with your own population continuously,” said Verger. “Your assisted living is fed by your independent living, your independent living is fed by … home health, memory care or an enhanced care unit is fed by your regular assisted living.”

Offering more in the continuum likewise helps with marketing, Verger added. The model of care is attractive for aging individuals that don’t want to worry about switching providers if they have to get more or less intensive care, or see a specialist.

Skilled nursing provider Marquis Companies has been building a diverse offering of services for years now, adding home health, a long-term care pharmacy, a therapy company and, most recently, a special needs insurance plan (I-SNP) to its 25 SNFs and assisted living facilities.

“By having many, many parts of the continuum, that allows us to drive some efficiencies,” Steve Fogg, chief financial officer for Oregon-based Marquis, told SNN. “It allows us to improve the experience for residents, because they have commonality of services from an organization that they know.”

Fogg did say that it’s been challenging to have so many pieces of long-term care in play over the past 18 months.

“As leaders, we have to be knowledgeable and versed in all of these pieces, versus if we just specialize in one. I think that probably keeps (other operators) from doing what we’ve done as well,” Fogg said.

Having an insurance plan that markets to all of its residents across the continuum has helped from a payment perspective, the Marquis CFO said.

Added Fogg: “It helps to fund those physicians and nurse practitioners that are now employed by us in our buildings every day. They’re providing all of those services to the residents and managing their care needs in entirety, something that we never used to do in our industry until we were able to start this insurance plan and provide the economics that allowed us to afford that workforce.”

Out of these service lines, Marquis has focused more on its pharmacy and therapy platforms within the past five years.

“We have developed some new facilities as well but our revenue growth hasn’t been as great on the facility side as our pharmacy and therapy businesses,” Fogg explained.

Payors, reimbursements and the continuum

Ownership, or partnership along multiple continuum lines, helps operators market to Medicare Advantage payers, Fogg said, adding that the business model is more attractive than just an individual provider or a single service in the continuum.

“Now it’s about being able to gain market share with Medicare Advantage payers, it’s about improving the residents’ experience with the goal of driving more market share because we do have all of these services together,” Fogg said. “For us, it’s not as much about the revenue that you might get from multiple sources, it’s more about making sure that you can be economically viable.”

Managed care groups are attracted to operators who have multiple service lines and are able to consistently deliver quality outcomes, Verger noted.

“When we have the whole continuum of care, [we] really have more capabilities controlling some of those outcomes,” said Verger.

In an industry that has faced margin pressure from lower Medicare reimbursement for the past seven to eight years, it’s heartening to see President Joe Biden’s plan to move more dollars to promote home-based care, Fogg noted.

The move translates to increased importance in this particular service line by the current administration.

Biden in March proposed a $400 billion plan to bolster Medicaid coverage for home-based care; it’s part of the $2 trillion American Jobs Plan.

“At this point we still don’t know exactly what that looks like … we’ll have to see how the reimbursement improves or changes to be able to make up for this initiative,” the Marquis CFO added.

Creating a post-COVID environment

Beddingfield said Pruitt’s home health care arm will be more sophisticated in terms of equipment and specialists that would usually be found in an acute care setting.

“We’re really looking to create an environment that’s more conducive to the challenges that were posed by COVID,” said Beddingfield. “We have partnered with respiratory therapists that can go in and help with COVID patients having had lung damage, difficulty breathing, and they’re trying to recover from the virus.”

Pruitt currently partners with a company to provide therapy equipment to home health patients too.

The pilot program is in a proof of concept stage for Pruitt — eventually there will be reimbursable codes for such equipment, but right now the company pays for at-home therapy tools.

“We’re trying to take a different proactive approach from the typical home health benefit to really bridging that gap for individuals who need services that could go beyond what home health has been in the past,” said Beddingfield.

With a doubling in the number of seniors in the U.S. in the coming years, Beddingfield doesn’t believe home health care will come close to overshadowing acute care in a skilled nursing facility. There will be more than enough individuals who need these various stages of senior care, he argues.

According to the Population Reference Bureau based out of Washington, D.C., the number of Americans aged 65 and older is projected to be 95 million by 2060; this demographic was reportedly 52 million in 2018.

“We’re going to have 40 million additional seniors, and we’re going to have to restructure the health care system so it meets those needs,” said Beddingfield. “I do see skilled nursing facilities getting back to a previous COVID [occupancy] threshold. … There’s going to be so much demand.”

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