Elmbrook CEO Coble: Nursing Home Operators Must Prepare for End of Fee-For-Service Medicare

Oklahoma-based Elmbrook Management has doubled in size since 2018, and now is in the process of transforming from a skilled nursing provider into a population health management organization.

Doing so is necessary to prepare for the future, as fee-for-service Medicare is rapidly being eclipsed by managed care models, Elmbrook CEO Tom Coble said on the latest episode of the Skilled Nursing News RETHINK podcast.

“Providers need to be thinking about, well, we’re probably approaching 50% managed care now, and so how are you going to get paid? And how are you going to deliver services?” Coble said.

Coble has long been on the forefront of integrating nursing homes into value-based payment frameworks, having launched a Medicare Advantage Institutional Special Needs Plan (ISNP) in 2005. On the podcast, he spoke about the progress that skilled nursing operators have made in value-based care, and the frustrations of “unnecessary regulations” that are still in place related to ISNPs. He also spoke to current staffing challenges and Elmbrook’s initiatives to improve recruitment and retention, as well as the company’s growth and transformation.

Highlights of the podcast, edited for length and clarity, are below. Subscribe to Rethink via Apple Podcasts, Google Podcasts, or SoundCloud.

SNN: On a scale of 1 to 10, with 10 being the worst, how bad would you say the staffing situation is right now for your facilities?

Coble: We operate across 13 buildings in nine rural counties in Oklahoma. So staffing can be a 10 one day and not the next … it varies by county. But I think … it’s starting to settle down a little bit. I’d say it’s probably five to six, on average.

Any initiatives that have moved the needle on recruitment and retention?

We ended up going out and proactively trying to partner with all the nursing schools in our area. We have partnered with Langston University, who has a satellite nursing school here in Ardmore, Oklahoma, where our home office is.

They had plenty of students wanting to come in, just could not find instructors. So we went out and we found nurse practitioners that wanted to not only teach but also to do clinical, hands-on work in facilities. And we hired them. And so they work part time, when Langston is in session, as instructors, and also then work for us and do clinical work within our facilities.

And we also are in the process of partnering with a junior college here in the area that has an RN program, to provide clinical space for them to do more hands-on nursing, and also with the LPN schools that are run through our career tech system here in Oklahoma.

So we have gotten very proactive with those programs and talking with them about what we do in skilled nursing facilities. Skilled nursing has changed so much that what happens in our buildings is a lot different from what the students think.

And then on top of that, we’ve established a lot of scholarships we’re giving to qualified students who want to go [to school] — and not only our staff, but potential students coming into those nursing programs. So, we’re just trying to do anything we can to get people interested and into the programs. And those are starting to pay off. We’ve had those go on now for almost two years. And that’s why it’s starting to help ease the pain for us.

Besides staffing, what are you most focused on at the moment in your role as the leader of Elmbrook?

We’re starting to transition our company from a skilled nursing organization into a population health management organization.

And so, I’m in the process of trying to develop, at the state level, the opportunity for us to become a home- and community-based provider and using our facilities as the hub for the services and where they happen, but also developing relationships out on not-for-profit campuses where we’re opening medical clinics, so that we can provide services into those communities and help them out.

As you know, everyone wants to remain at home as much as possible. So we’re trying to develop a network and a system where we can help those communities take care of their members, or people living there, and help fulfill their promise.

When you say you’re creating medical clinic clinics at not-for-profits, is that on the campuses of not-for-profit senior living organizations?

The first ones that we’re working on are here in Ardmore, and we’re going in and opening clinics where their members can come and see nurse practitioners for their care, do outpatient therapy, we can do some IV therapy and those types of things, without having to leave the campus.

Transportation is a terrible problem, getting it coordinated and taken care of. So if you can move people around on the campus, and treat them without them having to be taken out somewhere in the community, it’s much easier and really helps coordinate it a lot better.

I assume this strategy is related to the work you’ve done for many years in the Institutional Special Needs Plan (ISNP) Medicare Advantage space, so maybe we should rewind. For those who don’t already know, can you share the story of why and how you founded your first MA plan?

Sure. I came into the nursing home business from the oil and gas business. I was sitting behind the business office desk in a 126-bed skilled facility here in Ardmore, on March 1 1993, as the co-owner, having never worked a day in health care in my life. It was a pretty good leap.

The facility that we had purchased was Medicaid and private-pay only, so it was not even Medicare certified at that time, like a lot of other facilities here in Oklahoma. We became Medicare certified on January 1 in 1994. So, we were able to do that very quickly.

And once our staff was trying to start IVs, and we had a couple of nurses that could do PICC lines … once you could see those talents work, then you start to realize that your residents are going to the hospital to be treated for something that you could actually treat in the facility.

And my background coming into this had been in systems, and going in and reworking systems and updating them. So it got me to thinking, what if we could take care of these residents? And at that point in time, it was Medicare Plus Choice, before Medicare Advantage came about in 2004. And we did an analysis of all our [Medicare] admissions in one year out of this facility, and the results were that we thought that 70% of our hospital admissions could have been avoided, if we’d been allowed to just treat in place without sending them to the ER. And I think that tends to hold even to today. And so that’s how finally, when the MMA was passed that authorized Medicare Advantage, we were one of the first in, because we’d been working on it a long time and were ready to go.

To circle back to the current strategy about transforming into more of a population health organization, to what extent is the Medicare Advantage program underpinning that move?

The ISNPs are the foundation to this whole program.

The thing about ISNP that I don’t know if most people think about it [is] the ISNP allows us to change the Medicare benefit structure for the members we serve. And so, a person who’s 65 and typically on Medicare, they’re vacationing with their grandkids at the beach or on cruises, or over in Europe, they’re very active. And that person needs a whole different set of benefits than a person who is 85 and living in a skilled nursing facility.

When you’re able to go in and waive a three-day stay, where you can skill them in place and then add additional benefits that meet their needs within the facility … that’s what we’re trying to do, is get this benefit package in place. So if someone does require a higher level of care, we’re able to enroll them into the ISNP and help use those benefits to manage their care properly in a way that delivers proactive preventative medical care, rather than waiting on someone to get sick enough to be treated.

You’re talking about transforming into a population health company. I think that might be daunting to some skilled nursing operators who feel confident about their ability to deliver care in the skilled nursing facility setting, but then they think about entering this world of value-based care in a bigger way. Do you think that once you start down that path, you’re going to have to become a provider of home- or community-based care, you’re going to have to become a provider of primary care in a clinic setting?

The most daunting thing I’ve heard in a long time is some people talking about having everyone in some form of managed care model by 2030, 2033. We’re almost starting the federal [fiscal] year ‘24 here in a few months. So what happens when fee for service is gone?

Providers need to be thinking about, well, we’re probably approaching 50% managed care now, and so how are you going to get paid? And how are you going to deliver services?

So for me, if you just sit back and look at how you fit in … and particularly if you’re in a rural area — if you’re in a high-density urban area, you might be able to get by with focusing on one specialty — but in these rural areas, there’s no one to provide the home- and community-based services.

… I think everybody’s capable of doing it. It’s just, I think, having the ability to see down the road and actually buy into the fact that fee for service is going to be gone. And we’re headed into a managed care world that is going to be value-based driven and quality [driven], and being able to put the pieces together to get there. It is — it takes a lot to start putting this together.

It’s mind boggling to think about such a big change … Do you think [phasing out fee for service] is a realistic goal and operators need to treat it that way?

I don’t know if 2030 is a realistic goal or not. But I know that everything that they’re doing, CMS is doing, particularly out of CMMI [Center for Medicare and Medicaid Innovation] — they’re being very proactive about this, and they’re pushing very hard trying to get these different models in place. Once you get the tipping point out there, you get to 60% or so, it could fold up in a heartbeat. I think it’s going to happen, and our organization wants to be prepared to provide those services and take that risk when it does.

What are you most pleased with in terms of how ISNPs or Medicare Advantage generally has grown and developed within the skilled nursing and nursing home space, going back all the way to those early days, 2005 or earlier?

I have been trying to convince everyone, since 2005, that this is something everyone needs to look at. And it’s taken a long time to get there. But when you’re really introducing a new model that completely changes what’s been done for all these years, it’s very hard to do. I’m very happy now that we really have got a lot of companies going and AHCA has got a Population Health Management Council going, and a lot of the state associations are putting together their own networks, and looking for ISNP companies to partner with their members.

It’s really starting to take off, and I’m very pleased that it finally has, and that this model puts the nursing facility in charge, you’re taking risk, you’re being very proactive. You’ve gotten nurse practitioners in your buildings, your physicians are in your buildings more over time. And it just completely improves, improves quality. And the family’s satisfaction improves with it. It’s taking care of the person at the right time, in the right place, with the tools necessary to give them a high level of care.

When we’re talking about the model, what you’re talking about is skilled nursing operators having some sort of ownership and going at risk in an ISNP, and having some control over the benefits and the financial upside, versus working with the managed care payers in a market and accepting the rates, whatever they can negotiate.

That’s exactly right. This is about providers going at risk. But they’re going at risk given full control. They’re not going in and paying them less than what Medicare pays. They have the ability to actually earn more. So this is the model we’re talking about. It is not traditional managed care, it is completely different.

What’s been most frustrating to you or where do you still see the most room for improvement in terms of the ISNP model within the skilled nursing space?

There are still a lot of rules, regulations that CMS has that we’re working to get changed; it goes back to what works for a 65-year-old Medicare recipient, you don’t need to do all those things for a skilled nursing resident that’s a member of a plan. CMS is really starting to be open and recognizing the difference that we provide in these plans versus other Medicare Advantage. As this continues to move along, it looks like maybe we’ll get a little traction, see if we can get some of these unnecessary regulations that we’re having to go through. Some of it has to do with network. And so, being able to take care of our members of our plans.

Imagine you’re talking to an aspiring nurse. What’s the story from your career that you would choose to tell that person in an effort to get them excited about focusing specifically on the skilled nursing, long-term care space?

There are so many examples, I don’t know if I can just pick one out. But when talking to future nurses, or current nursing students, I talk to them about, this is a calling. And it really is a calling, whether you’re a nurse, or if you’ve been a housekeeper or anyone in a facility for a long time, you’re there and you bond with the residents that come to us for care.

To me, it’s biblical, and the Bible, in Matthew 40, where Jesus is talking about taking care of the widows and the orphans and the people that are sick … that’s what we do.

We’re here to take care of those that can’t take care of themselves, whether they can afford to take care of themselves or not, we’re going to treat them like the person that they are. And I don’t know how many settings you can work in where the last voice a person hears on Earth is yours, and the next voice is God’s.

The name of this podcast is Rethink. What’s something that you think nursing home operators need to rethink?

We’re going through such an evolution right now. If you haven’t sat down and started trying to rethink everything you do, you need to. This isn’t a competition. We need to be sharing with each other. There are unique partnerships that are coming out of this, particularly in the ISNP field, where you’ve got providers coming together as partners where probably in the past, they were thought of as competitors.

We’re willing to share anything we’re doing with anyone, because this industry is going to have to change. And we’ve changed a lot. But it just keeps coming and coming. And we’re going to have to change more.

Click below to listen to the complete episode, including Coble’s reflections on the increasing need for scale, his time as chairman of AHCA, the coming federal staffing mandate proposal, and more.

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