Clinical talent leaving the workforce has taken center stage as nursing home industry leaders discuss the ongoing staffing shortage – but that’s only part of the story. The other half of the devastating staffing crisis, operators say, is tied up in a loss of back office talent.
And this shortage of back office workers is also bearing down on nursing home profit margins.
Often, back office roles are tied to reimbursement, finance and revenue, and include MDS coordinators. And openings for such positions – arising due to retirement or turnover or loss to another sector – remain unfulfilled or filled by less experienced workers. This, in turn, has led to delays or loss of payment for nursing homes amounting to huge losses, operators said. Some operators report turnover for these positions to be higher than 40%, with dire consequences that include shutting down.
While the titles of back office roles vary widely, “back office” refers to jobs that impact the cost side of running a business, including human resources, payroll, accounting, data entry, inventory management and other administrative or logistics work.
“Everybody talks about the shortages of aides and nurses, but back offices have also really been hampered with loss of talent,” said Mike Nickolaus, CEO of EF Senior Care. “If you combine [staffing] challenges on the clinical side with lost positions in the business office, you can have facilities that really aren’t getting reimbursed for the level of care they’re providing.”
Danielle Dang, vice president of clinical reimbursement for EF Senior Care, has seen back office team members retire after delaying it the past two to three years due to Covid. On the opposite end, new back office talent is inexperienced, with a lot of people trying to diversify their career – perhaps they did something parallel to a particular role but lack expertise, she said.
Moreover, back office turnover has been impacted by different opportunities that weren’t necessarily available for business office workers prior to the pandemic, such as agency work with greater flexibility, according to Lori Strubbe, COO and partner at Focused Post Acute Care Partners (FPACP).
“It’s a revolving door of staff, just like in a clinical role in a building,” said Dang. “I think we’re seeing a lot of that. A lot of the expertise has left our market, to be honest. A lot of the people that saw things evolve over the years have retired and moved on.”
Challenges to recruitment are especially difficult in rural areas, according to Aimee Middleton, vice president of operations for the Evangelical Lutheran Good Samaritan Society.
Meanwhile, some back office talent loss is due to workers leaving the sector altogether. Middleton said, roles susceptible to this type of back office loss are those that don’t delve too deep in sector specifics like a business manager, and these can employees can easily be recruited into another industry.
EF Senior Care, which started as a consulting firm and still maintains that business along with operations and technology arms, has been “called in quite a bit” to support buildings seeing this loss of back office talent.
Sometimes it’s to temporarily fill an accounting or finance position, and other times an operator may be dealing with a major claims processing issue.
“We’re seeing them go in different directions. It’s not just one pathway,” said Dang of the assistance that EF Senior Care provides to operators struggling from loss of back office talent.
Centralizing back office roles: Case of MDS nurses
Some operators have had to dramatically shift role responsibilities for back office talent in order to counter the impact of turnover by centralizing certain roles, including that of the nurses dedicated to assessing the Minimum Data Set (MDS). FPACP actually started this process about five years ago, well before the pandemic, so the back office situation isn’t as dire as it is at other organizations across the sector.
For FPACP, the decision to initially centralize focused on MDS nurses specifically, who were experiencing burnout from having to juggle direct care and reimbursement responsibilities, according to Strubbe.
“We made the organizational decision to centralize that particular role, and we took them out of the building, we changed the reporting structure, and it has made a huge difference in our turnover,” said Strubbe. “It also has made a difference in the consistency of our reimbursement and in our audits, which have been more favorable.”
FPACP operates 28 buildings in Texas.
The decision was largely sparked by the beginning of the Patient Driven Payment Model (PDPM), she said.
Strubbe said FPACP is fortunate enough to have back office turnover at about 12% currently, a low statistic compared to competitors, especially with MDS nurse turnover.
Prior to centralizing the MDS nurse role, Strubbe said the company had higher turnover closer to 30-45% for these positions, and there was a big impact to the bottom line given a 90-day learning curve at a facility.
That translates to anywhere from four to six months where reimbursement may not be properly paid out.
“You’re going to lose consistency in the documentation, you run the risk of loss of reimbursement – care does correlate to dollars,” said Strubbe. “That inconsistency is going to be an issue. And you’re going to lose education time and training time. It has a negative impact for any business with that position turning over.”
Prospective MDS nurses in interviews appear excited that FPACP has already made this decision to centralize the MDS nurse’s role, Strubbe said.
“We are probably more centralized than a lot of our competitors, from an organizational structure perspective,” added Strubbe.
Besides the MDS nurse’s role, referral and admission team members and human resources are also centralized at facilities.
For large operators such as Good Samaritan, centralizing back office operations after its merger with Sanford Health came with benefits. These benefits included leveraging a centralized billing location to support back office needs, Middleton said.
The nonprofit provider is “well positioned” to navigate back office workforce challenges, she added, although the shortage of RNs in rural areas – where Good Samaritan has its largest footprint – has made it difficult to fill more specialized talent like the MDS coordinator.
Repercussions of back office turnover
Operators are facing devastating consequences as a result of a high turnover in the back office, according to Patrick Flaherty, founding partner of EF Senior Care. One of his clients was ready to close its doors, with one building insolvent and only a handful of days with cash on hand.
The facility had $500,000 in withheld claim reimbursement, based on denial reasons, Flaherty said. There were about four mistakes made consistently on claims triggering the denials that needed to be fixed to free up these payments, he explained.
“If it wasn’t for that work, they would have gone under, there’s no doubt about it. They would have run out of money. It’s really impactful,” said Flaherty of back office roles. “[Back office] is your primetime building function, the ‘keep the cash flowing’ role that is just critical to pay attention to.”
As for inexperienced new back office staff, Flaherty said EF Senior Care has essentially trained a lot of these new recruits through its consulting business.
“There’s no way you could get this all under your belt just by sitting back and reading some articles. It’s just too much to understand” unless there is proper training, added Flaherty.
It does help newcomers to have an existing network of contacts as part of company property to really help bridge the gap between retiring back office talent and those with varying levels of experience.
On a single facility level, EF Senior Care’s Dang says that these roles are so interconnected with care that even one break in the chain could mean an inability to bill for service.
She used the social worker as an example given that this staff member would normally process the level of care forms for Medicaid. If that person is unavailable, there are a “cascade” of things that could go wrong.
There’s no bandaid fix to ensuring proper reimbursement, she said.
Who counts as back office talent?
Roles that count toward the back office really depend on an operator’s business model, Flaherty said, with some being in a central business office and others in-house at each facility.
But, generally these positions deal with ensuring adequate reimbursement, finance and revenue. Back office roles encompass every level within the company too, from MDS coordinators to C-Suite executives.
“You won’t get the same answer twice,” said Flaherty. “If they have a central business office, or if they just let a role not get backfield then it might get picked up by an administrative person.”
Strubbe separated back office talent based on location too, with facility back office staff being administration, department heads, special workers and MDS reimbursement nurses, along with dietary managers.
Back office talent located at an operator’s corporate headquarters will be staff that oversee regions, multiple facilities.
“Depending on the company, its structure and its size, you will have your central billing, you have your case management,” Strubbe said of corporate back office talent. “We actually have admissions and our referral team. Marketing is centralized. Not all companies do it that way.”
EF Senior Care’s financial operations team is a diverse collection of people that impacts the company’s ability to receive revenue and also capture care for the residents through software systems and government entities, added Dang.
“In our world, we have a vice president of revenue cycle management. You have me with clinical reimbursement, you have finance, AP and payroll, overall financials,” said Dang.
Per facility, there are nurses that report to Dang on the clinical reimbursement side, and also managed care billers. Others are devoted only to Medicaid applications and ensuring Medicaid eligibility, which can be a “very lengthy and detailed process,” she said.
Not a lot of people can do what the Medicaid specialists do, Dang said, and they’re often working on a time crunch.
“Quite often, unfortunately, residents wait until they’re in a situation that’s difficult before they can get the help they need with doing those applications,” said Dang. “Not only are they in a time crunch, but they’re now ill in a hospital or nursing facility and they need these additional documents filled out, application processed, and they may not have the resources or the family to help.”
And, Medicaid applications are often very detailed, with residents needing to dig back five years sometimes for financial records, property, ownership of businesses, any funds they might have gifted.
It’s the most resident-facing of back office talent, she said, requiring a lot of time spent with the resident and family members.
Third party fill-ins and a buildup of paperwork
Dang said a lot of these back office positions are increasingly being filled by larger contract groups, sometimes even as remote positions, which can come with their own challenges and lead to delays.
If an operator hires back office talent through a third party contract from out of state, there may be knowledge gaps.
“If you’re in Massachusetts, it is a greater challenge because there are such specific guidelines around certain payer sources here,” said Dang. “Those out-of-state billing offices, contract offices, are not familiar with the rules and the guidelines around the state. It delays things a bit.”
Loss of back office talent can have a snowball effect for operators if notices for redetermination get missed in the mail, for example, or an important notice from the insurance company requesting additional documentation is missed, Dang said.
“It snowballs before it gets better. You then have to peel back all those layers, help rebuild it, repair what’s been dropped and build it back up again,” said Dang.
Trust needs to be built up too, especially for certain positions like the Medicaid application role, Flaherty said. It’s an uphill battle too, with nursing homes in general not having the best reputation when it comes to people and their finances.
“Five years is a long time to have to go back and peel things apart. There’s a level of trust that has to be earned there,” he said.
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