An already risky move to turnaround a building on the Centers for Medicare & Medicaid Services’ (CMS) Special Focus Facility list may become an even greater challenge. Those that have taken on the task say recent punitive restrictions could mean less operators will opt to purchase these types of facilities in future.
In turn, especially in rural areas, that could translate to less access for residents in need of skilled nursing or long-term care — in the event facilities close.
Steve LaForte, Cascadia Healthcare’s director of corporate affairs and general counsel, said CMS’ slew of regulations, without any context or nuance around the different facilities serving different communities, could ultimately disincentivize operators from taking on SFF properties.
“Nothing in what was released last week is about collaboration,” added LaForte. “There’s nothing about incentivizing, saying we’re going give an operator a longer time to turn it around … there’s not a lot of operators who are clamoring to take over one of those buildings.”
The federal agency plans to churn facilities through the program at a faster rate by implementing harsher penalties, according to a memo released by CMS last week. The hope is more facilities can enroll in the program if others graduate faster.
Additionally, SFFs with immediate jeopardy (IJ) deficiencies on any two surveys could risk federal Medicare and Medicaid funding termination, along with escalating enforcement if the building continues to show noncompliance with “little or no” effort toward improving performance, according to CMS.
CMS is also calling on states to consider staffing levels when admitting facilities to the SFF program.
Setting the stage
LaForte and now retired administrator Debbie Mills shared what exactly it took to bring an SFF building on the brink of closure to a four-star property with zero agency use and accolades from the American Health Care Association (AHCA).
In the case of Wellspring Health and Rehabilitation in Nampa, Idaho, that transformation took four to five years. Timelines are crucial when it comes to building the workforce, along with other essential tasks needed to turnaround a facility. That makes the CMS updates on staffing and faster movement through the program all the more concerning, LaForte and Mills said.
In 2016, the property was a one-star building with a staggering 95% of staff being brought in through agencies. The state told Cascadia that Wellspring was on the “fast track” to getting shut down, according to LaForte.
“It was being written up multiple times over a series of months in the fall of 2016 over the horrific lack of care that was being provided,” he said.
Cascadia purchased Wellspring in 2017 with the expectation that the property would fall under the SFF list within a month.
“It takes you a couple of years to turn a building that’s in that much distress, when you have to replace 95% of your workforce. Along the way, there were periods where you took two steps forward and one step back,” he said.
Even in the pre-pandemic labor market, reducing that much agency use was a “high hurdle,” he said.
CMS’s updates don’t allow room for “one step back” anymore.
“Once you get one building decertified, you’re on CMS’ radar in a really bad way, and it impacts your ability to get financing, if you have leases with other landlords,” LaForte told SNN. “I think you have to take that totality. If people aren’t going to take these buildings, they’re going to close and that ultimately impacts access.”
The immediate impact will be felt in rural America, he said, where CMS already knows there is a health care delivery issue.
Now defunct Orianna Health Systems served as operator prior to the transaction; Orianna liquidated its assets as part of a Chapter 11 bankruptcy plan, which wrapped up at the beginning of 2019.
Cascadia, with funding from CareTrust REIT, decided to take on the property given its ventilation unit – the only unit available to the community for 300 miles. If that property closed, residents in need of a ventilator would have to drive across state lines to a facility in Utah, he said.
“We were sort of operating on a shoestring. We were new, we were small. We didn’t have a big back office to support us. But we did it. We did it out of a sense of heart and culture,” said LaForte. “Now we thankfully have the luxury of a little bit more heft behind us where I think that we would consider things in a different way.”
Cascadia now has 37 properties across Idaho, Washington, New Mexico, Arizona, Montana and Oregon.
Race against the clock
Lending to its credibility at that time, Cascadia was about to graduate another property out of the SFF program as well when speaking with the state to acquire Wellspring. Coeur d’Alene Health & Rehabilitation was the only SNF in the state to be in the SFF program in 2016.
“The truth was, we wrestled with it because we didn’t want to stub our toe. At that point, we were a company with four buildings, three of them already were turnarounds and we were going to take on three more turnarounds,” added LaForte. “We were graduating a building from special focus and we were going to take on the next special focus – but the opportunity to do good, the opportunity to preserve the care for the community was too incumbent upon us not to take on the challenge and not take on the duty to serve the community.”
The rush to improve care quality started with bringing on a veteran administrator like Mills, who served in various leadership roles for Avamere and Kindred Healthcare. Retired as of March, Mills comes on as an occasional consultant for Cascadia.
Under her leadership from 2018 to her retirement this spring, a certified nursing assistant (CNA) was promoted to a recruiting role for Wellspring, huge efforts were taken to improve infrastructure – everything from new paint to pulling out rugs – and most crucially, bringing the vent unit in-house.
“That respiratory department was a contract and we bought them out. That was a big deal. They wanted to be bought out, they wanted to be part of our team,” said Mills.
The promoted CNA, Johanna Sobranos, is still in her role today and works with Mills to bring in CNAs that may have left the field to do something else, finding talent through Facebook and previous work relationships.
Wellspring was very “top heavy” as well, she said; there were a lot of highly skilled nurses working in offices instead of making rounds on the floor. The building converted from paper charts to electronic medical records too.
“We removed [nurses] from the offices and had them on the floor working. It took a village, it really did,” said Mills. “It is a lot of work and commitment and time on everybody’s part. If CMS wants to see these buildings succeed, they need to support and not be so punitive.”
‘Setting the system up for failure’
SFF updates, along with the Biden administration’s other unfunded mandates, leave operators at a disadvantage if reforms aren’t coupled with meaningful reimbursement increases, he said.
“If the goal is to make the quality of care better and you have facilities that were identified as having problems, how do you work together to create a better system? If it’s all just stick and no carrot, that seems like we’re setting the system up for failure,” explained LaForte.
Still, that doesn’t mean Cascadia, which got its start doing turnarounds in Idaho, would turn down an SFF property on sight. The team would “at least entertain” the possibility of taking on another SFF, while also seeing how things play out with the most recent updated regulations.
“Do we have to think twice or a third time about whether or not we want to do it in this environment? Probably. Does it mean absolutely we wouldn’t do it? No. I think we would still consider it,” he said.
Companies featured in this article:
