This article is sponsored by Reliant Rehabilitation. In this Voices interview, Skilled Nursing News sits down with Chris Bird, CEO of Reliant Rehabilitation, to learn about how the rehab world is transforming with respect to SNF partnerships. He explains how Reliant ensures quality outcomes while minimizing avoidable therapy expenses. He also shares his outlook on rehab business models in a post-pandemic world.
Skilled Nursing News: Chris, you have been CEO of Reliant Rehabilitation for over five years. What are the most important career experiences that you draw from in your role today?
Chris Bird: I fell into health care through a hospital turnaround consulting firm shortly after I graduated from college. I have taken on progressively larger operational roles in the health care provider space with large, public companies like DaVita, Tenet and Kindred. I also served as the CEO and COO of several private-equity-backed companies in various niche segments, such as dental and urgent care. I think all those experiences contributed to where I am today.
Specific to my role at Reliant, this is my second go-around in the contract therapy post-acute space. I previously served as the president of Kindred’s Peoplefirst Rehabilitation Division and ran the combined Peoplefirst and RehabCare business after Kindred acquired RehabCare. That deal created the largest contract therapy company in the country, with over 20,000 employees and more than a billion dollars in revenue.
I was a board member with Reliant in 2017 when we made the decision to go a different direction with the company, and I subsequently was asked to serve as the CEO. Reliant had grown to be a nationwide therapy company organically, not growth by acquisition. I wanted to help take the company to the next level. The rest is history.
Relative to the pandemic, what has changed in your world as a rehab provider? Where do things stand now in terms of your SNF partnerships?
Bird: The pandemic has illustrated the importance of having a therapy partner that can adapt patient care practices and protocols in an environment where guidance from CMS, the CDC, OSHA and other state and regulatory authorities evolves constantly. We’ve been in the thick of it with our customers, dealing with COVID infections, restrictions, precautions and all the challenges that come with this pandemic.
We feel a shared responsibility for the welfare of our caregivers and residents, which has strengthened our partnerships. In a highly regulated industry, those partnerships have never been more important in delivering high quality outcomes regardless of the challenges we collectively face.
How does Reliant ensure quality outcomes while minimizing avoidable therapy expenses?
Bird: Great question. The reality is that contract therapy is a highly competitive, price-sensitive business. Supply and demand keep pricing within a reasonable band. High-cost provider typically get replaced because pricing is readily available and transparent, and that model is not sustainable after a certain point. Conversely, pricing below a certain reasonable threshold just to win the business is also not sustainable. You simply can’t run a business where your expenses exceed your revenues.
With that in mind, as the old adage goes, “There really are no shortcuts.” I think that’s apropos for our business. If a provider is singularly focused on reducing expenses and finding the lowest cost provider, they certainly can accomplish that objective, but at what cost?
I would like to believe that therapy matters, not just in terms of quality, but also quantity in the eyes of referral sources, family members and patients alike. Census has not recovered to pre-pandemic levels, and an exceptional therapy program with robust clinical and compliance systems helps attract new patients.
Simply put, therapy remains a critical element of patient recovery, and it certainly can be an important part of a provider’s value proposition. I think being too aggressive on pricing or utilization is shortsighted and our partners get that.
There is a lot of chatter in the industry about alternative therapy models. Is a full-service model still relevant in a post-PDPM world? Going along with that, what is your outlook for the future of the business model?
Bird: In my opinion, the industry will continue to be largely divided between skilled nursing facilities that outsource therapy and those that manage it in-house. Since PDPM and the transition of therapy from a revenue to a cost center, we’ve seen some providers explore other options, such as joint ventures and management models.
We stayed away from JVs because we questioned their legality, not to mention the liquidity challenges with that particular structure. As it turns out, the OIG agrees with our position and issued a formal opinion letter stating that the JVs violated the federal anti-kickback statute. The providers that went down that rabbit hole need to unwind them before they run afoul with the OIG.
As for the management model, I’m not sure why any provider would utilize this model for more than a couple of months before taking it in-house or fully outsourcing to a contract therapy provider.
Management companies don’t employ the therapists, so they have limited authority to manage them without risking their contract. They can’t afford to have a bunch of therapists complaining about them. They also have no skin in the game when it comes to keeping therapy wages and other expenses from ballooning since they don’t own the P&L. And they don’t indemnify the customer for the delivery of care or the documentation to support that care, so the SNF provider ultimately bears all the risk.
Full-service contracts, on the other hand, take full responsibility, accountability and ownership for all those things. Ultimately, skilled nursing providers must decide whether they want to take on the cost and associated risks of employing, supporting and managing the therapy teams.
Some providers underestimate the value of having this expertise outsourced and overestimate the complexity of taking therapy in-house as a core competency.
That said, I would argue that full-service, contract therapy partnerships have never been more valuable in ensuring care delivery is consistent based on patient type or diagnosis. That it is defensible given the considerable scrutiny therapy is under today and will continue to be going forward.
What are you looking forward to as a therapy partner in the months to come?
Bird: Our industry has been in an environment with little support for long-term care, and much criticism from Washington, D.C. and the media. We are impressed with the resiliency of our SNF partners and the thousands of health care workers who have been dedicated to caring for some of the most vulnerable members of our community.
Our customers, partners and contract therapy companies like us have been the safety net for so many of these vulnerable patients. Looking forward, we’re all supportive of transitioning to more home-based services. However, the home care resources and infrastructure simply aren’t there today, and they are not sufficient to handle all the patient care needs of our post-acute care population.
In addition to investing in more home-based options, which I think needs to happen, we also must fund and support the infrastructure and reimbursement needs of skilled nursing facilities, as well as assisted living and independent living facilities. I have no doubt that contract therapy will continue to play an important role in all those settings moving forward.
Entering 2021, no one knew fully what to expect in the skilled nursing industry. What were some of the biggest concerns to you in the industry last year, and what impact do you believe they will have in the long-term-care industry in 2022?
My biggest disappointment is how little attention has been given to the impact of the public health emergency on ancillary health care providers, such as contract therapy companies. The financial impact on contracted long-term care workers has been significant, and little has been done to mitigate that impact. In addition, there has been no substantive discussions about how to keep vital therapy employees from leaving post-acute care.
In stark contrast, substantial reductions to the physician fee schedule used for billing outpatient therapy services were only partially mitigated in another eleventh-hour temporary funding measure that provides a one-year delay and ensures additional disruption to this sector. Even less attention has been given to the 15% reduction to reimbursement for outpatient services provided by therapy assistants, which became effective January 1.
It is difficult to reconcile the significant contributions and pressing need for long-term caregivers with untenable annual therapy reimbursement cuts that continue to undermine the ability to staff and provide this critical care going forward.
Editor’s note: This interview has been edited for length and clarity.
Reliant Rehabilitation provides physical, occupational and speech therapy to skilled nursing facilities. To learn more about how Reliant Rehabilitation can help your organization, visit Reliant-Rehab.com.
The Voices Series is a sponsored content program featuring leading executives discussing trends, topics and more shaping their industry in a question-and-answer format. For more information on Voices, please contact [email protected].
