The Quotes That Defined Skilled Nursing in 2022 — and Hint at What’s Ahead

The top quotes of 2022 memorably captured some of the biggest skilled nursing issues of the year, from “shocking” payment policies to “colossal” regulatory issues to “transformative” changes.

The quotes below not only serve as reminders about what transpired over the last 12 months, but touch on many issues that are still pressing as 2023 approaches. These issues include low COVID vaccination rates, regulatory changes being pursued, and operational headwinds that are blowing hard.

So, taking stock of what some top industry and governmental leaders said in 2022 should help skilled nursing providers evaluate how they fared over the past year and consider how to hone their go-forward strategies.

“Ensuring that providers take steps to avoid transmitting a dangerous virus to their patients is consistent with the fundamental principle of the medical profession: first, do no harm.” — U.S. Supreme Court majority opinion, Biden v. Missouri, January 13, 2022

The year began with a major SCOTUS ruling that upheld the COVID-19 vaccine mandate for health care workers.

And as 2022 draws to a close, vaccination issues are again driving headlines, generating legal rulings and causing concern among providers.

High uptake among nursing home residents for the initial doses of the COVID-19 vaccine helped turned the tide against the virus. The CDC even announced an end to indoor mask requirements for some nursing homes earlier this fall.

But CMS officials recently warned that far too few nursing home residents have received the latest COVID-19 booster. And data points are once again trending in bad directions for both residents and staff, according to a Dec. 15 AARP analysis, which stated:

“More than 1,000 nursing home residents and staff died from COVID-19 during the four weeks ending Nov. 20, according to the analysis, an increase of 200 deaths from the previous four weeks. Meanwhile, cases among residents were up 19%, with roughly 1 in 26 testing positive. Staff cases rose 9% during the same period, with 1 new case for every 37 residents.”

The Biden administration is making moves to improve vaccination rates in long-term care facilities. Providers have spoken about vaccine fatigue and the need for more action from hospitals, to vaccinate patients prior to discharge.

Meanwhile, a group of state attorneys general is challenging the federal vaccine mandate for long-term care workers. Montana’s attorney general is leading the charge; in another case, a judge recently held that the vaccine can be mandated for health care workers in Montana’s hospitals and clinics.

So, after another year in the shadow of COVID-19, familiar battles are still being waged, including the fight over vaccination.

“As Wall Street firms take over more nursing homes, quality in those homes has gone down and costs have gone up. That ends on my watch.” — President Joe Biden, March 1, 2022

The Biden administration issued a proposal for comprehensive nursing home reforms in late February, ensuring that 2022 would go down in industry history. During his State of the Union address on March 1, Biden mentioned the reform push and spoke out against the “take over” of nursing homes by “Wall Street firms.”

This remark has resonated throughout the rest of the year, as CMS has started to roll out new public information about nursing home ownership and federal lawmakers have introduced bills requiring more transparency. And some transactions — including a recent deal involving Welltower (NYSE: WELL), ProMedica and Integra Health — have raised more questions about ownership disclosures.

Biden’s use of the broad term “Wall Street firms” in his SOTU also was telling. The White House singled out “private equity” investors for particular criticism, but nursing home industry leaders have pointed out that private equity firms have been shedding their investments in the sector, not aggressively “taking over” facilities. Noted commentator Howard Gleckman wrote that the administration is “two beats behind” the actual ownership trends in the sector. And leaders with large capital providers similarly took issue with how the administration is defining private equity and the threatened crackdown on these investors — particularly as the sector requires capital to stabilize from COVID challenges.

“It’s shocking on its face, and then in the overall context of everything else they’re talking about, it’s exponentially shocking.” — Steve LaForte, director of corporate affairs and general counsel for Cascadia Healthcare, April 12, 2022

In early April, CMS dropped the proposed 2023 Medicare payment rule for skilled nursing, which included a 4.6% cut related to the Patient-Driven Payment Model (PDPM) that would equate to a $320 million reduction in Medicare funding.

Provider outcry was swift. And LaForte echoed many other voices of protest when he alluded to “the overall context” of the cuts. That context included a severe staffing shortage, historically high inflation, and the requirements and proposed regulations being pursued by the Biden administration.

The industry rallied and emerged with a win, with CMS phasing in the PDPM cuts in the final rule.

However, the battle showcased the constant struggle facing skilled nursing providers. They are alternately lauded and vilified by lawmakers and policymakers, subjected to enormously rigorous regulations but are chronically underfunded, and have to constantly advocate to win resources even while dealing with complex operational dilemmas each day on the front lines.

“A colossal waste of time.” — Seema Verma, consultant and former CMS administrator, May 10, 2022

Few public figures have been as openly critical of the White House’s reform agenda as former CMS Administrator Seema Verma, which was in evidence when she described the efforts to increase ownership transparency and go after private equity as “a colossal waste of time.”

“We’re not sitting here trying to figure out who owns home health or who owns dialysis facilities or who owns providers. We’re kind of going through this exercise just in nursing homes because somehow we think that that’s going to increase quality of care,” Verma told Skilled Nursing News in an exclusive interview during the Synergy Summit conference in San Diego.

While her political alignment makes her a natural antagonist to the current administration, she was a consistent voice throughout the year offering a counterpoint on various hot topics of importance. Also at Synergy, she spoke out about the need for survey reform.

“We need to move away from a problem-finding system to a problem-solving system, because the punitive approach to fines can no longer be the only strategy to which we resort,” Verma said during her presentation.

She advised industry stakeholders to bring constructive ideas to policymakers rather than simply “attacking” regulations, and offered some reasons for optimism about winning support.

“No policymaker wants to support regulation that’s going to put nursing homes out of business,” she said.

“When things are challenging there’s no better time for disruption and so that will be an exciting byproduct of how we change and how we leverage some of these challenges.” — ProMedica President Senior Care & Healthy Aging Angela Brandt, June 14, 2022

Brandt made the statement above in the wake of ProMedica Senior Care reporting a $124.3 million loss in Q1 2022. Clearly, the organization was facing a challenging time — and ProMedica was not alone in this, throughout 2022.

And Brandt was not alone in expressing determination to meet challenges by disrupting the status quo of nursing home operations.

For instance, recruitment and retention initiatives, cutting-edge building design and even innovation in financing mechanisms generated headlines in the last year. Leaders with Signature HealthCARE and Brickyard Healthcare spoke about the need to drive innovation and make “magic” despite the “madness” of staff burnout and labor shortages, unfriendly regulations and inadequate payment rates.

From changing how rounding is done, to leveraging new technology with the right “implementation etiquette,” Signature Chief Medical Officer Arif Nazir and Brickyard Chief Strategy Officer Wanda Prince described efforts at change and the need for an “innovation mindset,” while on stage at SNN’s CLINICAL event in May.

But embracing disruption is not enough to keep every facility or provider organization on solid financial footing. About five months after Brandt’s comments, ProMedica announced its imminent exit from 147 skilled nursing facilities held in a joint venture with Welltower. The plan is for these facilities to be operated by various regional companies going forward.

Such dispositions and closures were also a big part of the skilled nursing story in 2022, and given current economic conditions and the operating climate, this trend will continue into the new year.

“It’s just transformative.” — Lorie Morris, SVP of Assessment Coordination at Prestige Healthcare, September 7, 2022

The countdown is on to Minimum Data Set (MDS) changes that were postponed due to COVID-19.

In early September 2022, CMS quietly released a draft version of the nursing home comprehensive item set version 1.18.11. While little fanfare accompanied the release, the document created a bang among nursing home professionals.

The removal of Section G, in particular, spurred Morris’ comment about the “transformative” changes on the way, and widespread questions about how state-level reimbursement will be determined.

CMS has provided few additional details on the MDS updates, but officials did recently set Q2 2023 as the likely release period for the draft RAI manual.

The big MDS changes come against a backdrop of changes and challenges related to the MDS coordinator role, which were detailed in SNN’s most-read story of 2022.

“I think the end of the public health emergency … will be the end of the line for a lot of operators. So, I would expect at some point mid-next year to see more distress.” — Mark Lamb, outgoing Chief Investment Officer, CareTrust REIT, November 9, 2022

Debate over the renewal — or expiration — of the COVID-19 Public Health Emergency stretched throughout 2022. While the federal government opted to keep the PHE in place, nursing home owners and operators had to confront what its eventual end will bring.

Indeed, certain PHE-related waivers did end in 2022, including the allowance for non-certified nurse aides to work longer than four months while preparing for exams. The expiration of the TNA waiver caused heartburn this year, despite the option for states to request waiver extensions.

The end of the PHE also could affect telehealth usage, the ability of other clinical positions to fill in for some physician duties, resumption of QAPI efforts and the need for three-day qualifying hospital stays, among various other areas.

As Lamb’s comment suggests, the end of the PHE also could change merger and acquisition dynamics. Already, many nursing homes are losing money, and the end of the public health emergency will only increase distress by eliminating flexibilities currently in place — while also signaling to capital providers that their expectations should also be normalized.

The result could be falling prices, opening up the field for REITs like CareTrust to make investments in 2023, Lamb proposed.

While buyers are eager to make deals, a more troubled market could make 2023 a painful year for many industry stakeholders — but working out COVID-related distress hopefully will result in a stronger sector one year from now.

“We all have to compete, and we all have to play harder.” — Dwight Brown, CEO of Homebase Medical

Brown leads a home-based care company, but he was referring to the entire post-acute and long-term care continuum when he spoke of competing harder.

That’s because the rise of value-based care has created new imperatives, as health systems and insurance companies seek to keep costs in check by keeping older adults healthier for longer periods of time. In this effort, they are taking steps to directly control more of the continuum, including by making massive acquisitions of home health providers.

But skilled nursing companies should see themselves more as potential partners for health systems and payers, not as acquisition targets, American Health Partners CEO Michael Bailey said at the Aging Media Network CONTINUUM event this month.

To be a strong partner, skilled nursing providers must be able to deliver proactive and sophisticated care and furnish the data that demonstrates key outcomes, such as fewer hospitalizations.

And providers should also be thinking about how to amplify their voices and influence among provider networks, and ensure that they are receiving fair financial rewards for their contributions to shared goals. Becoming an insurer, such as through launching or joining a provider-owned institutional special needs plan (ISNP) is one option.

Furthermore, providers that are in value-based frameworks must be sure that they take a person-centered approach and educate staff appropriately, former CMS Administrator Mark McClellan said at the recent AHCA/NCAL Population Health Management Summit.

While the shift to value-based care is not easy, the new paradigm is exciting — at least, in the perspective of AHCA/NCAL CEO Mark Parkinson.“Value-based care through the population health management model is the most exciting thing I’ve had the chance to be a part of in my 30 years in the industry,” he said at the Summit.