The year 2023 was a busy one for skilled nursing operators – many of whom began to see signs of recovery from the pandemic amidst challenges that have continuously plagued the industry.

In our reporting, a few outstanding and recurring themes we observed from the year past included staffing shortages, low reimbursement rates, and governmental scrutiny, to name a few.

Operators rethought key roles like the scheduler position, in a year when the Centers for Medicare & Medicaid Services (CMS) proposed a controversial staffing mandate that left many operators wondering how they would make ends meet, if it was enacted.

Nursing homes also grappled with how to deal with Medicare Advantage (MA) plans, outsourcing case managers and hiring in-house staff, and investing in technology to streamline documentation to mitigate the strain on margins, among other initiatives.

Lastly, litigation in the sector this year has the potential to create a long-term impact, with the Supreme Court hearing a case that will impact whether Medicaid beneficiaries can seek federal relief for state-level violations, potentially limiting providers’ rights to address Medicaid claims’ denial or nonpayment through legal action.

Here’s a synopsis of our most viewed stories.

Skilled Nursing Operators Protest ‘Insane Amount’ of Administration Needed as Medicare Advantage Expands

In the face of the federal government’s push to enroll more beneficiaries in managed care, nursing home providers are decrying the excessive administrative burden associated with Medicare Advantage (MA) plans.

Carespring Health Care Management’s Chief Development Officer, Kim Majick, told SNN that the extraordinary administrative workload amid severe staffing shortages and minimum staffing requirements. Industry leaders argue that they are not adequately compensated for the added complexities and costs of administering MA plans in nursing homes.

Despite the challenges, nursing homes are grappling with the reality that MA plans are here to stay. Operators are exploring ways to streamline the administrative process while advocating for swift patient transfers to appropriate care settings. The arduous journey begins with the authorization process, requiring layers of administrative work, including compiling and submitting documentation, leading to a prolonged waiting period for responses from MA plans.

The appeal process further complicates matters, particularly when nursing home clinicians must persuade MA plans that patients need extended recovery time. Notably, MA reimbursement is lower than that of traditional Medicare, raising concerns among providers. Projections indicate that MA is expected to cover over half of all Medicare beneficiaries by 2031.

To mitigate the burden, nursing homes are outsourcing case managers or hiring in-house staff and investing in technology to streamline documentation. Larger hospital systems are also seeking more control over the authorization process. In contrast to the clarity of traditional fee-for-service (FFS) Medicare, MA introduces administrative layers, making it more challenging for direct care workers to determine patient eligibility for skilled care.

‘Big Trouble’: Medicare Advantage Rates Strain SNF Margins, Deepen Sector’s Pain

Medicare Advantage (MA) plans are causing financial strain on skilled nursing facilities (SNFs), with data indicating that MA plans pay 25-33% less to SNFs than traditional Fee-for-Service (FFS) Medicare.

“It takes your breath away a bit, and it has consistently happened … it definitely hits the bottom line,” said Susie Mix, CEO of California-based Mix Solutions, Managed Care & Contract Consulting.

The National Investment Center for Seniors Housing & Care reported that while traditional Medicare yields nearly $600 per resident day in revenue, managed Medicare only pays out $468 per day.

Medicare Advantage is “cannibalizing” Medicare Fee-for-Service, Marc Zimmet, CEO of Zimmet, told SNN. “I think it’s really important to say that Medicare is what subsidizes Medicaid, and as facilities have less and less [FFS] and more and more Medicare Advantage, that puts more pressure on the Medicaid program.”

To address financial challenges stemming from MA plans, SNF operators are advised to hire negotiators or engage in direct negotiations for managed care contracts.

“If you negotiate them as exclusions in your contract, that won’t take from your bottom line anymore; you will get reimbursed for those things,” Mix said.

CMS: Dual Eligible Medicare Advantage Enrollees, Including in Nursing Homes, Received Worse Clinical Care

A report from the Medicare & Medicaid Services’ Office of Minority Health (CMS OMH) reveals that Medicare Advantage (MA) enrollees who are dually eligible for Medicare and Medicaid, along with low-income subsidy recipients, received worse clinical care than those not falling under these plans.

The study, based on 2021 data, focused on 36 clinical care measures, including diabetes, cardiovascular disease, and chronic lung disease, using the Healthcare Effectiveness Data and Information Set (HEDIS). Dual eligible and low-income subsidy recipients scored below average on over one-third of measures, with notable disparities in cancer screening, mental illness care, care coordination, and medication use.

‘We’re Putting Out So Many Fires’: Skilled Nursing Workers Forced to Wear Multiple Hats, Increasing Burnout Risks

Nursing home workers are facing burnout risks as they juggle various roles due to the ongoing labor shortage. The need to fill multiple positions has become a norm, leading to challenges such as increased fatigue and less cost-effective operations.

Workers, including those in leadership roles, find themselves performing tasks beyond their designated responsibilities, impacting their ability to focus on strategic operational matters. The pandemic has further intensified this juggling act, with many operators struggling to return to pre-pandemic norms.

Some providers are actively hiring individuals with multitasking abilities, recognizing the need for flexibility in roles. The interview process now emphasizes the importance of candidates being comfortable with varied tasks and quick transitions between different functional areas.

“You don’t want a nurse going to work in the kitchen, and then not taking care of her people. They’re trained in certain areas, and so to go ahead and start training someone else is just not a good use of time. But in emergencies, you do what you need to do,” Marc Halpert, CEO of Monarch Healthcare Management said, adding that the pandemic really tested that principle.

Legal Theory Could Have Sweeping Implications for Nursing Homes’ Ability to Claim Medicaid Dollars

A Maryland court case involving 21 nursing home operators may significantly impact Medicaid reimbursement policies. The case, led by sb2 Healthcare, focuses on the denial of Medicaid claims without appeal rights for approved skilled nursing care.

“This is a giant step forward in protecting skilled nursing providers’ revenue in Maryland and every other state,” sb2 Managing Partner Chad Bogar told SNN. “His law firm is now planning to file federal suits in Ohio, Indiana and Illinois, seeking to enforce providers’ constitutionally protected property interests in approved Medicaid applications. These states are among those that failed to comply with CMS regulations, causing significant revenue loss, he said.

This strategy becomes crucial as a Supreme Court case questions whether Medicaid beneficiaries can seek federal relief for state-level violations, potentially limiting providers’ rights to address Medicaid claims’ denial or nonpayment through legal action.

The court’s decision on this case could impact the ability to use the “Blessing Analysis” legal strategy, making the due process clause litigation strategy more relevant for providers.

‘So Undervalued’: Why Nursing Homes Need to Rethink the Scheduler Role

Can a skilled nursing position be compared to that of a Grandmaster chess player? According to Scott Erwin, the workforce planning specialist at Reverence, the scheduler’s role fits the bill.

“A similar comparison can be made with London taxi cab drivers who must memorize the entire map of London to qualify for their medallion,” he said.

Operators and administrators told SNN that while the scheduler is not considered a supervisory position at most facilities, the role requires a keen understanding of the culture and people at any given community and the ability to have strong working relationships with each employee. Moreover, even with technological advances and availability of scheduling software, the need for human input in this role remains great even as some leaders suggest that schedulers aren’t valued enough for the service they provide.

Since the scheduler is in control of 35% to 40% of all expenses, they suggested putting more time and effort into growing leaders in the role.

“The role that I think is so undervalued is really the [scheduler] that we don’t count as a supervisor,” Bernie McGuinness, CEO of Indiana-based Majestic Care, told SNN. “Typically nursing homes don’t classify this person as a salary employee. Our frontline care staff drastically believe that this person is their supervisor, because they control how many hours they get, whether or not they get the day off, and that controls their check and their personal life.”

‘Driving Good People from Our Sector’: Nursing Home Operators Warn that Survey Process Worsens Labor Crisis

Amidst significant staffing shortages over the past three years, operators have grappled with the challenging task of locating and retaining competent administrators. The departure of a long-time administrator has been observed to trigger a cascade effect, leading to the departure of other staff. Operators told SNN that this circumstance heightens the urgency for reform in the survey process.

Skilled nursing facilities typically undergo five to seven surveys annually, with one conducted annually and others triggered in response to complaints from residents, family members, current and former staff, or anonymous submissions. Survey guidelines are established by the Centers for Medicare & Medicaid Services (CMS), with each state having its own survey agency responsible for quality assurance.

In Wisconsin, administrators face a particularly daunting challenge in navigating the survey process, as noted by Rick Abrams, CEO of the Wisconsin Health Care Association. He expressed deep concern about the high turnover and exodus of administrators from the profession in the state.

“Since January 1, 2022, there have been over 200 changes in administrators at our Wisconsin nursing facilities,” he told SNN. “In many of these instances, the administrator has not moved on to a different facility but has left the profession entirely. Just by speaking with [skilled nursing] owners personally, I can tell you the survey process is driving good people from our sector, and that’s got to change.”

CMS Proposal Marks Shift After Years of Skilled Nursing Frustration with Medicare Advantage Diversions

The Centers for Medicare & Medicaid Services (CMS) opted to respond to shifts in care dynamics, particularly concerning the redirection of care from skilled nursing facilities to home health within Medicare Advantage (MA) plans. This decision follows extensive feedback from both the skilled nursing industry and consumers over the years.

In December 2022, CMS initiated measures to tackle this trend through a proposed rule centered on enhancing options in post-acute and long-term care placement. According to the rule, CMS stipulates that Medicare Advantage organizations (MAOs) are prohibited from imposing coverage criteria that are more stringent than those applied in traditional Medicare coverage.

“CMS is responding to two things. One is feedback that they have heard from the industry for many years,” Fred Bentley, managing director at ATI Advisory, told SNN. “There’s also a report that came out in April of last year … it touched on concerns around access to skilled nursing care, and potential issues around substituting home health for skilled nursing care.”

Skilled Nursing Providers in Limbo with States Slow to Act on Looming MDS Changes

SNN reported that the looming Minimum Data Set (MDS) changes in skilled nursing facilities are causing uncertainty and varied preparations across different U.S. states, with questions arising about Medicaid reimbursements after the removal of Section G.

The change involves replacing Section G, used to measure residents’ functional status, with a similar Section GG. However, states are grappling with how to implement this transition, and only Wisconsin, Ohio, and Illinois have taken clear steps to address the issue. Providers nationwide are anxiously awaiting guidance from the Centers for Medicare & Medicaid Services (CMS) on MDS changes, anticipating increased workloads and confusion during the transition.

LPN Exclusion in CMS Staffing Mandate a ‘Convoluted Mess’ for Nursing Homes

The exclusion of licensed practical nurses (LPNs) from the proposed staffing mandate raised concerns among industry leaders, including Mark Parkinson, CEO and president of the American Health Care Association/National Center for Assisted Living. The proposed mandate requires Medicare- and Medicaid-certified nursing homes to provide a minimum of 0.55 hours of care from registered nurses (RNs) per resident per day and 2.45 hours of care from nurse aides per resident per day. The exclusion of LPNs could lead to a significant decline in their staff in nursing homes.

Some industry executives argued that LPNs play a crucial role in providing high-quality care, and the exclusion of LPNs from the proposal is a hot-button issue that could affect morale and deepen distrust between providers and regulators. There are concerns that meeting the minimum RN requirements might result in a decline in licensed practical nursing staff in nursing homes.

States with their own staffing mandates, such as Massachusetts, which allows the use of LPNs, may face challenges in complying with the proposed federal rule. The emotional toll of the proposed mandate is also highlighted, impacting nursing home workers who are still recovering from the trauma of the Covid-19 pandemic.