Majestic Care CEO: We Challenged Ourselves to Operate Differently, Are Growing Through ‘Scary’ Times in Skilled Nursing

With the federal government’s nursing home reforms, possible cuts to Medicare and staffing shortages occurring while COVID-19 challenges are ongoing, running a skilled nursing operating company can be “a little scary at times.”

That’s according to Majestic Care CEO Bernie McGuinness. The Indiana-based operator manages 27 skilled nursing facilities and seven assisted living centers across three states.

“I think we’re starting to try to recover, and different areas of the country are recovering quicker than others, but we’re nowhere near where we need to be as an industry,” McGuinness said on a recent episode of the Skilled Nursing News podcast Rethink.

When the COVID-19 pandemic hit, Majestic Care was only about 18 months old. Soon thereafter, like many in the industry, Majestic started facing persistent staffing issues that wouldn’t abate.

McGuinness and the leadership team launched the Majestic Difference, an employee focused benefits program that featured incentives such as perfect attendance bonuses, cell phone plans and, in some locations, subsidized housing.

“I’m hoping that the benefits and the things we continue to challenge ourselves [with] as an organization, I hope that they continue to make the difference for our care team members. I believe that’s how we have to respond to the pandemic,” he said.

Highlights of McGuinness’s podcast, edited for length and clarity, are below, and if you like what you hear, be sure to subscribe on Apple Podcasts, Google Podcasts, or Soundcloud.

On how the 4.6% Medicare cut proposed by Centers for Medicare & Medicaid Services might impact Majestic Care and the industry as a whole:

To take a cut of this magnitude to the best payer type that you’re going to see in a skilled nursing facility … it’s going to hurt, it’s going to force certain providers to make some tough decisions. We are going to have to figure out where we can make that up.

We already have many facilities and distressed facilities that we’ve acquired that are still on their journey back in recovery — and looking at their financial performance, making sure that we’re able to stabilize the financial performance of those buildings while trying to absorb this cut to our Medicare payment. It just doesn’t make sense. I think some of the recalibration is flawed.

I just would have to say that it comes at the wrong time and, I’ll speak for Majestic Care here, it will hurt us as an organization. It could be anywhere from $6 to $8 per patient day. Those are real dollars for us that pay an invoice or help us make payroll in different buildings. So we’ll have to look at our costs. We’ll have to go back to some of our vendors, we’ll have to look at our contracting, our pricing, all of those different items, we’ll have to look at our budgets as we prepare for the ‘23 budgets towards the end of the fiscal year here.

On the innovative efforts Majestic Care has undertaken to recruit and retain staff:

I’d say this has been our biggest priority over the last 12 months. When COVID-19 hit, we were a young organization about 18 months old. We did see our staffing numbers impacted right away, whether it was with the masks, COVID-19 being in facilities, people were scared, all you heard on the news was nursing homes and COVID-19 and deaths. It was a scary time to be an LPN, a nurse, a dietary worker in a skilled nursing facility, and we saw that initial decrease in the number of staff that we had.

As the pandemic went along, it just wasn’t getting better. So about a year ago, we pulled our executive team together and we really challenged ourselves as an organization: How do we respond to this new workforce, this new modern workforce, because we were noticing it’s not just skilled nursing, though I think we’ve been impacted harder than most professions.

So we challenged ourselves — what do we need to do different? Let’s quit burying our head in the sand, let’s quit thinking that it’s just going to recover on its own. We’ve taken a more analytical approach to recruiting. We’ve expanded our talent acquisition department.

We also looked at ways in which we could do a better job as an employer providing benefits to our care team members that really positively impact their life so that we’re more than just a job, that we could be a career. So we put together what we call the Majestic Difference. We’ve taken our direct care nursing wages up over 22%. So we’ve adjusted those frontline wages to be competitive in our market to recruit the best, to recruit from our competitors, but also those non-clinical areas so that we can recruit away from other industries and see if we can have people returned back in skilled nursing.

In addition we looked at other benefits … We put in a perfect attendance bonus, we moved all of our facilities into weekly pay to try and help our care team members make sure that they had cash flow coming in on a weekly basis. We just think that that’s a benefit we hear from our frontline staff that they very much enjoy. Then we said, ‘Hey, if you show up, whether you’re part-time or full-time, to every shift this week, and you work every shift … we pay each direct care team member $5 more an hour.’

In addition, we looked at other what we would call fringe benefits. We came up with Majestic mobile, it’s part of the Majestic Difference package. We have an employee perks program called Panda [ECS] that helps get discounts on anything from movie tickets to amusement park tickets to 40% off scrubs for the Majestic Care team members, all through a website.

Every full-time care team member who hires on with our organization, on their first day of employment receives a brand new Android smartphone on the T-Mobile National Network for unlimited talk, text and data. As long as they’re employed, we continue to pay that for them. That’s been a big hit.

Then we’ve gone into some urban markets now … and we’ve partnered with some apartment complexes in Columbus, Ohio, Cincinnati, Louisville, Fort Wayne, Ind. We have some apartment complexes that will offer anyone who works for Majestic Care 20% off their rent.

So I think we’re trying to respond in a way that helps not only us recruit staff, but then retain those care team members who answer that call every day, who provide good care, who show up to work every day for the shifts [that] are scheduled, and let them know that they’re working for a company that cares about their well-being and continues to add different items into our benefit package.

On whether there’s a place for federal staffing minimums in skilled nursing:

Right now I don’t know where we find the staff. I’m not opposed to the minimum federal staffing if it comes with solutions and a collaborative approach and has reimbursement that meets the needs of that staffing requirement. I think we’re looking at staffing wrong. I think we need to define, what is direct care staff?

With any directive from the federal government, I would like the answer of who’s going to pay for it. We need to talk about the whole array of ways in which we can attract staff back into the workforce, and not just be punitive and throw out an arbitrary number that is backed by zero support but only teeth to be punitive.

I understand the staffing minimums and what’s driving that from patient advocacy groups. I understand that it’s about quality and getting the care and making sure that our residents have the staff there … I think that’s everyone’s goal, but we need to have real discussions with the federal government, with CMS, with our legislators and try and figure out real approaches to a problem that didn’t just come up because of the pandemic, it existed prior. I call it the second pandemic, the staffing challenges right now.

On Majestic’s future growth plans and service lines or investments skilled nursing operators should set their sights on:

We’ve acquired five buildings at the end of the year and just one here to begin Q2. We’re trying to be strategic in our growth, we’re looking at cluster markets, we’re looking at expanding our footprint, building our markets to scale so that we have the proper nursing support to help our facility leadership, but also the ability to have shared staffing … and growth of our internal float pool that we’ve talked about in the past.

It’s easier to do when you have three or four buildings within an hour of one another. It also gives you some market presence with your referral sources. It allows you to define and put in some specialty clinical niches whether it’s in-house hemodialysis units, short-term rehab unit, private room memory cares, respiratory, ventilator care, behavioral care, you can put in defined clinical niches — meet the needs of the local health care community, your referral sources. You can look at some efficiencies in your operational management and oversight, and you can look at some shared staffing opportunities to help the burden of the workforce in which we’ve talked about. Majestic Care continues to look to grow well, we’ll close a few more buildings here this year that makes sense for us strategically.

As we look long-term, the managed care penetration within our payer types – whether it’s through Medicare Advantage replacement plans or through managed Medicaid products in different states – we also think that coming to the table with a healthy amount of residents in key markets, being able to meet those things will help us we sit down at the table and and look at contracting and the ability to service these communities and be reimbursed fairly for the services in which we provide from the managed care providers.

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