The nursing home industry is still saddled with several serious challenges – labor and funding issues included – as it struggles to recover and survive. And, it feels imprudent for the federal government to increase regulation of the sector, particularly as managed care companies continue unchecked as they create more pressures on nursing homes.
This is according to Mohammad Qazi, president and CEO of Ciena Healthcare.
Even as Qazi lauded many states for coming to the aid of nursing homes, he admonished the federal government under the Biden Administration for making matters needlessly difficult for nursing homes. The policies seem short sighted in not fully addressing the aftermath of Covid and the ensuing trouble for the sector, Qazi said.
Ciena is based in Southfield, Michigan, and provides skilled nursing, rehabilitation, sub-acute and assisted living service with almost 59 facilities across North Carolina, Indiana, Virginia and Michigan.
Qazi sat down with Skilled Nursing News to discuss the challenges and recommendations to policy makers to ease the pressures on the sector.
“If anything [the federal government] has made life more difficult and challenging in terms of the regulatory environment,” he told SNN. “On top of that, they’re not giving us any help, any resources.”
For starters, the federal government could help in regulating managed care providers, he said. With greater penetration of managed care plans, almost half of Ciena’s residents are enrolled in one. And given the rate of denial of services is much greater and reimbursements lower under managed care plans compared to traditional Medicare, Qazi recommends that policy makers exert greater scrutiny on managed care. Otherwise, he says, both quality of care and SNF margins will be compromised.
“People should get the services that they deserve, but now [managed care companies] are deciding, purely financially, what works for them, how they can keep their bottom line and … the stock price [up]. It has nothing to do with patient care anymore or quality of care,” Qazi said.
Qazi also recommends changes to the 5-Star Quality Rating System so that it more accurately assesses shortcomings at nursing homes, rather than superficially assessing one-off mistakes. A lot goes into building up a reputation, and while the climb is long and arduous, the descent to the lowest star can sometimes be steep and based on the negligence of a single employee, Qazi said.
“I am absolutely for the highest standards, but you have to understand the issues and challenges we are facing. [Federal agencies] operate from a vacuum. They set up the standards and they tweak them, sitting in Washington, D.C.,” said Qazi.
He added that the relationship between nursing home providers and policy makers should be one of collaboration, not enforcement. The current system, he said, “Does not improve care — all it does is penalize us.”
In the midst of the financial challenges, Qazi says he has had to make sacrifices.
The lag between when Medicaid rebasing is approved and the time it kicks in means he has had to contribute his own money to keep the doors open.
The transcript below has been edited for length and clarity.
Despite a gamut of challenges currently facing the nursing home industry, what’s your reason for staying in business?
I’ve been in it for 25-plus years. For us, it’s more than just dollars and cents. You know, so many of us started in nursing homes in different capacities at different levels. So I worked the floors in different capacities, then had a career jump from being a physical therapist at one time. So I have a deeper sort of connection with the elderly.
How are margins doing? Have you seen any benefit from Medicaid boosts in your markets?
We are still losing money every month. Our losses have come down because we’ve gotten rid of agency workers, but we still have losses month after month. We are not out of the woods yet. Absolutely not.
What is the one key goal for your company for the second half of 2023? And why?
Well, we’ve been in survival mode for a long time, and hopefully now we shall be past that stage and then we can focus on the next mode — of thriving. Covid days are pretty much behind us, and it’s been a very, very challenging time on many fronts. We want to focus on our core business, which is to take care of people, but it’s been difficult because of the staffing challenges, but we’re making significant headway.
What does the funding environment look like at a time of high inflation and rising costs amid higher acuity?
Many of the states are really stepping up and helping out. My overall feeling is that at the state level, I think states are realizing that they have to support long-term care facilities because if they don’t, then they are risking closures. How long can you survive? So pretty soon then it becomes an accessibility issue. So people are going to have to drive 100 miles to visit their loved ones? Is that what we want in this country?
There’s supposed to be some help on the way, but it has taken much longer. We’re all painfully aware of the fact that the government moves slowly. So even with the best of intentions, you know, it’s been slow. It’s been difficult for us to operate because our costs have gone up very, very substantially and a state like Michigan is cost based, so you have to wait almost a year before they can recognize the costs.
In the meantime, we have to operate. Given that our business is 24/7 we don’t have flexibility as far as closing our doors temporarily. We don’t have that luxury because it really is an essential business. On top of that, we have a lot of skilled workers, nurses. And so we have to deal with some very, very challenging and difficult times. But, you know, we’ve been dealing with it, we’ve done it, and we’ll get to the other side.
How are nursing homes faring given this climate of inadequate funding?
So everybody is kind of maxed out whether or not you have lines of credit. I’ve put a lot of my own resources back into the business. Where we are not getting help is at the federal level ever since this Administration has come into existence. It feels like this Administration has some sort of a bias against nursing homes.
So as we approach the six-month mark in 2023, what would you say best describes the year so far for your company and why?
What really killed us in the health care sector was temporary staffing. So we had to give a lot of raises. We tried to minimize the use of agency workers – because there was a lot of price gouging in that we were paying two to three times more and the care was not as good. And yet we have no choice but to use agency workers. And when you use agencies, the quality of care is going to suffer. But slowly, but surely we got rid of it. My facilities in Michigan have zero agency use right now.
So, the biggest accomplishment we have so far is in not using any temporary staffing. We got rid of them, but at a huge cost. It’s not easy for employees to survive in this kind of environment, and I’m happy to do it. But while I’m taking care of my employees, who’s taking care of my patients, and who’s taking care of me?
If you could snap your fingers today and change one thing, what would it be and why?
It is to really pay attention to what these managed care companies are doing. And to pull them back and [have them] pay us the rates that are like PDPM, raise their Medicare rates. That’s what we need in order to provide the care that people deserve. [Regulators] really need to pay attention to what’s going on with these managed care companies. They’re basically like an abusive relationship. We don’t want to say no to referrals because we want to fill up beds, but they are increasingly becoming very aggressive in terms of our rates.
Tell us more about the regulation situation with managed care?
Managed care companies are not being scrutinized. The federal government is not paying any attention to them. [The Centers for Medicare & Medicaid Services] is not saving the system any money. And it’s an abusive relationship with managed care providers because they’re sending us patients, but [managed care companies] pay what they want to pay. And, the patients and families don’t know that. Patients get discharged from nursing homes [prematurely], and many of them end up in the hospitals again. Also, they’re giving us a lot less than what traditional Medicare pays.
But unfortunately for the residents, [managed care providers] are doing a great PR job, running ads promising all these goodies. So more and more businesses are going the managed care way and away from traditional Medicare. There was nothing wrong with traditional Medicare, people got services. Now, money is going into the pockets of executives who are running these managed care companies.
Imagine you’re sitting at a table with the CEOs of 10 other skilled nursing operators and you could only ask them one question, what would it be?
How are you surviving?
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