In Wisconsin, an industry task force found that out of 345 nursing homes in the state, there have been 262 changes in administrator positions and 228 changes in director of nursing positions since January 2022.
“Now, there hasn’t been a change in every facility, some facilities have had multiple changes, but almost 500 changes in the administrator and director positions is very, very alarming,” Rick Abrams, CEO of the Wisconsin Health Care Association, told Skilled Nursing News.
Abrams led the survey task force that was formed in 2021 to get a better sense of trends and patterns in the state’s survey environment.
Abrams links the turnover in key nursing home jobs to burnout caused by Wisconsin’s survey process, but the challenges of operating in the state also extend to reimbursement issues — and some providers, including Villa Healthcare — are deciding to leave the state.
“I am personally familiar with at least two or three operators that I believe are on the brink of insolvency and bankruptcy,” CEO of Villa Healthcare Mark Berger told SNN. “I don’t know that they’ll go on the record with how badly they’re struggling. But they are, and ultimately we’re making the decision to exit the state.”
Villa, which operated a number of nursing homes across the state concentrated in the Southeast area surrounding Milwaukee, left Wisconsin at the end of 2022.
Wisconsin is far from the only state that presents particular operating challenges for nursing homes. Industry stakeholders in Montana last week implored state lawmakers to increase Medicaid rates, citing numerous facility closures. And a nursing home executive flagged the challenging litigation environment in Kentucky, in a conversation with SNN last week.
But Abrams and operators such as Villa are vocal about the dilemmas facing operators in Wisconsin, and the situation there highlights how differences and disparities across and within states are driving changes in the nursing home landscape as providers struggle with a staffing crisis and other headwinds.
‘In some states we do so well, in some states we do so poorly’
The Wisconsin survey group formed in 2021 was intended to address immediate concerns with the survey process, to explore alternatives to the current process and develop strategies to address immediate concerns and longer range reform goals, Abrams said.
The group studied data from the Wisconsin Division of Quality Assurance, which is in charge of administering nursing home surveys. They found that a small region surrounding Milwaukee in the southeastern corner of the state received the highest percentage of recertification surveys with immediate harm or jeopardy for the past three years.
State operators and administrators said there is significant variance between some states and other states, and even regional differences within states.
“As a multi-state operator, it’s hard to imagine that in some states we do just so well and in some states we do just so poorly,” Villa’s Berger told SNN. “We have the same operating teams and infrastructure in one state versus the other, so, you will see that disparity usually is driven by dysfunction or a subjective process interpretation by specific regional teams.”
Wisconsin State Survey Agency Director Otis L. Woods told SNN in an email that there has been no shift in CMS guidance since the pandemic and while operators may want a more “collaborative” survey environment, DQA is required to meet CMS standards as outlined in the State Operations Manual and federal memos, and does not have the authority to change the federal timeframe for correction.
“Survey trends between regions need to be evaluated over a long period of time and take in account the number of surveys conducted, size of the facility, number of residents in the facility, etc., assigned to each region to evaluate regional findings,” he wrote.
Still, operators are searching for timely answers for why many are struggling to keep up.
Berger said that beyond Wisconsin, many of Villa’s facilities are located in CMS Region Five, which includes Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin.
“Region Five from the CMS perspective, has probably led the country … when it comes to high level tags with high level scope and severity. And that’s been ongoing for a number of years already,” he said.
In 2021, 15.3% of recertification surveys in Wisconsin yielded actual harm citations in 2021, according to the task force’s report. This was the 11th-highest percentage across the 50 states. Colorado ranked No. 1 with about 38%, while the national average was 7.2%. Michigan, Indiana, Illinois and Ohio all ranked within the top 20 highest percentages.
Wisconsin fared better in 2021 with regard to the percentage of recent surveys with immediate jeopardy, ranking 18th-highest in the nation with 5.1% of surveys. Of the 56 recent surveys with harm or immediate jeopardy citations, 80% were from the state’s southeastern region.
Minnesota had the third-highest percentage of recent surveys with IJ, at 9.7%. Michigan came in at No. 8, Iowa ranked No. 14 and Illinois was No. 19. All these states were higher than the national average of 3.1%, while Ohio did better at just 1.2%.
IJ citations did spike in 2021 in Wisconsin. The total number of IJ citations rose from 61 in 2020 to 92 in 2021, while the number of facilities with an IJ citation increased from 41 to 59.
Providers in Wisconsin have expressed concern with survey practices in recent years.
“Over the last two years, [surveyors] put me in double-timelines, where they have come in and given a citation without time to complete my plan of correction and have that approved before they come back in again and cite me again,” Brynna Urich, a former administrator in Wisconsin, told SNN.
Urich left her administrator position, citing the survey process as one major factor in her burnout.
Reimbursement rates
In November 2022, the Wisconsin Department of Health Services announced that Medicaid cost coverage for nursing homes would increase from 77% for fiscal year 2022 to 91% for fiscal year 2023. The state also promised more than $500 million in payments and incentives to nursing homes, and more than $275 million in payments and incentives to hospitals.
Berger said that since that money is allocated towards the direct rate, it doesn’t necessarily mean that operator’s rates go up by a significant amount.
“They put that money into a pool and they raised a ceiling of what that rate can be,” he said. “Ultimately, if it cost me $150 a day to operate that facility, and they’re now giving me a 12% increase, they’re not giving it to me on my $150.”
Berger said this leads to under-reimbursement of about $50 a day.
The troubles for operators in Wisconsin go beyond the survey process, with Berger saying that reimbursement may be an even bigger issue.
“I think in the state of Wisconsin what leads to the pain there is the regulatory and the reimbursement,” he said. “I think reimbursement probably has been the leading cause and reason for why so many operators have not been able to make it there.”
The two biggest components to the rate are direct cost reimbursement and the support cost reimbursement, he said.
“And when you constantly have to fund shortfalls on all your support components of the facility, which are just as important as the direct care components, you’re ultimately going to continue to run short,” he said.
The middle road
Abrams maintains that a large part of his role is keeping an open dialogue with the Wisconsin Division of Quality Assurance, whether it is to address immediate concerns or to find a better way for the future.
“We respect the fact that our state survey agency has a job to do, but we continue to work with them to to the degree that they can humanize, if you will, the survey process because the punitive and draconian nature of the process is driving good people out of the sector,” he said.
Aaron Topper, President of AA Healthcare Management, which operates 16 facilities across Wisconsin and Illinois, including 15 skilled nursing facilities in Wisconsin, said his facility’s outcomes often hinge on the relationship with surveyors.
“Don’t don’t give us a free pass,” he said. “But potentially, at least be open to dialogue, suggestion, or additional information, different interpretations, things of that nature. When you have that dialogue that opens the playing field for all parties involved to collaborate and work ultimately towards what we believe the goal of the regulation is.”
Topper said that smaller, local operators might fare better in the state than large, multi-state operators do. Although 18 facilities is no small number, it is nowhere near the 30, 40 or 50 facilities some of AA’s competitors in the state operate.
“We try to keep that mom-and-pop feel, and have more of a hands-on approach, which I think helps us,” he said.
He also believes that AA’s turnover rate is better than many competitors, with administrators staying on for a year or two, whereas other organizations are seeing administrators depart within six months.
For former administrator Urich, survey burdens and reimbursement challenges together are hitting hard, not only burning out staff but threatening the viability of businesses. Seven facilities closed between 2021 and 2022, while more than 2,000 beds had been taken offline since the start of the Covid-19 pandemic.
“This has had huge financial impacts on skilled nursing facilities when we are already struggling to just stay afloat,” she said. “There’s been multiple closures in Wisconsin and there’s continuing to be more and more because they just can’t financially live.”
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