COOs at Touchstone, Trilogy, iCare Pursue New Initiatives in SNFs to Surmount Some ‘Big Worries’ 

Skilled nursing COOs face a slew of challenges, but are also focused on seizing new opportunities to drive clinical quality, expand revenue streams and differentiate their companies in the marketplace. All this, while keeping a close eye on regulatory and reimbursement headwinds.

“The opportunities that are out there as we come out of this public health emergency, I think they abound,” Leslie Cunningham Campbell, COO for Texas-based Touchstone Communities, told Skilled Nursing News. “The opportunity to align and be the solution within the markets to make lives better are out there – we’re very optimistic and excited despite a couple of big worries at the forefront.”

Todd Mehaffey, COO for Louisville, Kentucky-based Trilogy Health Services, doesn’t want to kid anyone. It’s still going to be a tough couple years for the sector as less-than-ideal rent structure to landlords and labor constraints continue across multiple markets.

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He believes true opportunity lies in improving quality of care and the quality of workplace culture.

“It never fails. Providers and operators with the highest quality and the highest engagement for their employees and the best customer service seem to fare well in our space from a financial perspective,” said Mehaffey.

And as iCare Health Services COO Mike Landi lays out his plans and priorities, he is keeping one aspect of the skilled nursing industry in mind: “One thing you can count on is change.”

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New year, new initiatives

Touchstone, iCare and Trilogy are all pursuing clinical initiatives, including adding additional service lines, targeting unique patient populations, and exploring new payment frameworks.

Touchstone brought on a corporate medical director in the new year, the first the company has ever had, in order to better engage its medical directors to facilitate care across the spectrum and take costs out of the overall health care system.

To that end, exploring Medicare Advantage Special Needs Plan (I-SNP) participation and a new hospice company are other main directives in 2023, Campbell said. These initiatives started as concurrent paths alongside managing the pandemic for the past several years.

Touchstone also has a newly constructed brick and mortar location that opened last year in Penitas, Texas, and is in the process of breaking ground on two additional locations early this year. They will likely open in 2024. The operator also purchased a facility in Tyler, Texas, in Q4 2022, bringing the company’s number of SNFs to 28, all in Texas.

All initiatives are meant to reposition the company for success as the sector comes out of the pandemic, Campbell said.

“We finally began to see that come to fruition with all of the groundwork that we’ve laid through 2022,” Campbell said of the initiatives. “We’re really looking at how we can implement and participate in evidence-based approaches, innovative approaches to care, using our medical director and other partners.”

Just as Touchstone named its first corporate medical director, Trilogy named its first-ever chief medical officer this year. The provider is focused on offering additional service lines across its portfolio, including dialysis and stroke programs. Internal growth in these service lines means they can come online for residents fairly quickly.

“Those initiatives are what will fuel us into the remainder of this year in the next year or two going forward. It’s exciting to see those programs develop and mature, as we offer those services to the communities,” said Mehaffey.

ICare is continuing to deepen its focus on serving incarcerated patients within its justice-involved program beyond the current two facilities that offer this option. The iCare team started working with the state to take “aging in place prisoners” needing skilled nursing care, and it’s also an initiative to de-densify the prison system in Connecticut.

Census at these two facilities is higher than the company average at more than 90% to 95%. ICare operates 12 SNFs between Connecticut and Massachusetts, and the company is open to more growth in the New England area.

“We are looking at other locations or other programs within our existing communities to relieve that [census] pressure,” said Mike Landi, COO for iCare Health Network in Connecticut. “One thing you can count on is change in the industry. Hopefully that presents opportunity for our [aging in place prisoner] population being more recognizable in regulations, more recognizable in reimbursement.”

Biggest challenges

Anticipation surrounding the end of the public health emergency colliding with the looming federal staffing mandate poses the biggest and most immediate challenge for operators, the COOs said, all behind the ever-present backdrop of staffing shortages.

Focusing first on the three-day stay waiver attached to the PHE, Campbell said its removal could mean potential transfer trauma for patients better left in one place to recover. In other words, the requirement for a Medicare beneficiary to stay at a hospital for three days when clinicians know they need to go to the nursing home from the beginning can cause undue stress on the patient.

The waiver has also helped Touchstone with revenue mix.

“It’s been a win on all fronts, a win with taking costs out of the system, a win with the benefits and impact to the patient … it’s helped us from a revenue perspective,” said Campbell. “What happens when that goes away? It definitely puts additional strain on the operations.”

In terms of the federal minimum staffing proposal this spring, Mehaffey said its potential effect on operations will be “fraught with peril.”

“[Federal staffing minimums] seem arbitrary. They’re not really service line or acuity based, they are just numerical,” said Mehaffey. “That’s been a headwind for some time, labor in general. However, with a new staffing guideline being proposed, I think it’s going to make that climb even that much deeper for most providers.”

Another big cause for stress, at least for Texas operators, is the uncertainty surrounding Medicaid rate increases. Legislation timing is running up against the end of the PHE in the state, with any decision not due to come down the pipe until September, Campbell said.

Texas is one of five states that hasn’t officially built in Medicaid increases to support operators once FMAP funding dries up. For Texas, that’s $19.63 less per day for nursing.

“What doesn’t go away, however, is the increase in costs that the pandemic has resulted in over the past two years,” said Campbell. “Inflation of wages, the use of contract labor premium rates, the impact of the cost of necessary [personal protective equipment] PPE … that results in a very significant disparity absent the continuance of that $19.63. That’s a big worry, it’s a big challenge.”

Top priorities in 2023

Not surprisingly, occupancy and workforce recovery are top of the list for nursing home operators.

“With the exit of many senior leaders over the past two years, we’re really focused on growing our own leaders for the future,” said Campbell.

For Touchstone, leadership turnover has been felt primarily with administrators and directors of nursing. While the team didn’t experience a mass exodus during the height of the pandemic, they’re now hearing from these leaders that retirement is coming sooner than later, Campbell said.

“They anticipated, two years ago, working 10 more years – now they’re anticipating working five more years … the scary fact is that unless we do something to develop our own, we’re going to be in a pinch two or three years from now,” noted Campbell.

Mehaffey said 2023 is all about improving quality of care at existing underperforming facilities and turnaround properties for Trilogy.

“Our number one priority this year is getting our bottom performers moved up the list,” said Mehaffey, adding that newly acquired facilities will mature and staff will be more seasoned as the year progresses. “That’ll be a big lift to the organization to see those do well.”

Landi said the iCare’s team’s “number one focus” is hiring and retaining top talent at every level, and will continue to be top priority in the near future. Mehaffey echoed Landi’s thoughts on staffing saying that headwinds are high when you’re trying to be an employee-first organization.

The team at iCare has spent a significant amount of time collaborating on wages and benefits, and finding creative ways to make shifts and schedules more attractive to staff. Landi said iCare also takes advantage of its facilities being in close proximity to each other in the state when it comes to hiring and recruitment.

Staff recruiting and retention is “software driven” as well, he said. The Connecticut operator uses health care hiring app Apploi to streamline its applicant process, and enable prospective employees to better understand the perks and benefits of the job.

“In Apploi, I messaged [about] 100 CNA applicants that applied over the past year to one of our communities; you’re receiving dozens of responses over a very short period of time, interview on the spot,” said Landi.

Company culture will need to prioritize work-life integration moving forward, Campbell said, versus a competition between work time and personal time. It’s difficult to establish flexibility among the nursing home workforce when leaders are on call 24/7 and administrators and DONs, along with other leaders, need a safety net.

Embracing the needs of leaders’ families must also be a top goal, Campbell said. Providing dinners on special occasions or making sure these leaders have time to spend with their families are among steps that can make a difference.

“Work and life aren’t competing. They’re more integrated,” said Campbell. “You don’t feel guilty when you’re at home and you don’t feel guilty when you’re at work, because we have this nice integration and flexibility to afford a focus on both.”

For iCare, culture and purpose can be one and the same, especially for staff who work at facilities offering the parolee program. Many have worked at the first facility to offer the program, 60 West, since its inception in 2013, Landi said.

“We’ve been fortunate to hire passionate staff about that, who want to be involved in that program and care for that population. That population certainly carries with it a lot of stigma,” said Landi. “There’s full transparency of what we do, who we are and what our mission is. We’ve been fortunate to find staff who are equally as passionate.”

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