The Quotes That Defined 2023 in Skilled Nursing — and Hint at What’s Ahead

As the Covid-19 public health emergency officially ended in 2023, the nursing home sector continued to face lingering troubles across many facets of the business even if spread of disease – and death resulting from it – diminished as a concern.

Chief among troubles that continued to plague nursing homes included workforce shortages and expansion of Medicare Advantage, as well as the proposed federal staffing mandate that hit in the fall.

The top quotes of 2023 capture some of the biggest skilled nursing concerns of the year, from “we’re putting out so many fires” as the mantra of nursing home workers, to an “insane amount” of administrative burdens with the expansion of Medicare Advantage, to “astronomical” claims denials of MA plans ultimately leading to SNF margins being strained and operators screaming “big trouble” ahead. 

Margins also faced pressure from high interest rates, a slower occupancy recovery and regulations. The economic environment and tighter regulation amid labor woes led to extreme anxiety among operators, with the leader of the largest operator of rural nursing homes – the Evangelical Lutheran Good Samaritan Society – to exclaim that “the sirens are going off” for a metaphorical tornado that threatens to wipe out nursing homes in rural communities.

Prominent in the following compiled quotes from some industry leaders, workers and financial analysts is the sense that while labor problems stubbornly persist, there is hope in 2024 for these to resolve. Taking stock of these words of strife, wisdom and the will to succeed despite all odds should help skilled nursing providers come up with strategies to proceed in 2024.

‘We’re putting out so many fires’

Staffing continued to pose issues – especially in the first half of the year – with all kinds of makeshift solutions, from a high use of agency workers to having all hands on deck. The labor shortage meant that workers in nursing homes were juggling various roles and chipping in on a range of tasks, so much so that some providers began hiring people for this ability to cross over.

“During the day, you’re putting out so many fires … you’re trying to catch up on your own work every night. That’s tiring,” Laurel Lingle, vice president at Majestic Care, an Indiana-based operator that manages 27 skilled nursing facilities and seven assisted living centers across three states, told SNN.

‘It’s really an insane amount’

Administrative burdens grew substantially as Medicare Advantage expanded to reach an almost 50% penetration rate on average across the nation.

Nursing homes grappling with this reality had to deploy extra resources to deal with the higher rate of claim denials under MA plans compared to the easier process related to traditional fee-for-service (FFS) Medicare. MA introduced new administrative layers, making it more challenging for direct care workers to determine patient eligibility for skilled care.

As operators explored ways to alleviate these extra burdens while advocating for swift patient transfers to appropriate care settings, they decried the pre-authorization process, requiring repeated attempts at compiling and submitting documentation, and leading to a prolonged waiting period for responses from MA plans.

In some cases, nursing homes ended up outsourcing case managers or hiring in-house staff and investing in technology to streamline documentation related to MA plans. Larger hospital systems also sought more control over the pre-authorization process.

“It’s really an insane amount of resources that we’ve added to assure that we’re advocating appropriately for the patient,” Kim Majick, chief development officer at Carespring Health Care Management, told SNN with regards to the efforts being made at nursing homes to allow for approval of services under MA plans.

‘The hassle factor’

Medicare Advantage’s denials of service, delays in service, shortened length of the SNF stay on top of the opaqueness of the pre-authorization process led to outcry from nursing homes in 2024.

“It is just astronomical, the amount of patients that are discharged too early because the insurances will no longer pay,” said Laray Fayad, Regional Director of Care Connect and Census Development at Texas-based Focused Post Acute Care Partners (FPACP), which operates 27 nursing homes.

In the end, the burdens of cost and care are shifted to providers of health care across the continuum, Fayad told SNN, and quality gets compromised while rehospitalizations go up.

“It is going to hit the hospital’s pocketbook, the skilled nursing facility’s pocketbook and the physician’s pocketbook. It’s not going to hit these insurance companies, but it’s going to hit all the providers,” Fayad said.

Some nursing home leaders called the reduced length of stays associated with MA plans “the hassle factor” – as Erin Shvetzoff Hennessey, CEO of Health Dimensions Group, put it at SNN’s RETHINK conference in Chicago in the fall.

Such views came amid advocacy groups and policy makers calling for more transparency in the process of Medicare Advantage pre-authorization, terming it “the Black Box.”

‘It’s like the sirens are going off … The tornado is coming’

This dire warning regarding massive closures of nursing homes was issued by Nate Schema, CEO of the Evangelical Lutheran Good Samaritan Society, largest nonprofit operator of nursing homes in the sector. Schema spoke of the deepening of an access crisis after mounting closures of rural nursing homes. “You don’t know where [the tornado is] going to land. But when it lands, it can wipe out a community,” Schema said, attributing the crisis to a staffing shortage that has been brutal for rural communities.

‘A convoluted mess’

The much anticipated federal staffing mandate proposal hit the nursing home industry like a ton bricks on September 1, raising anxiety levels further with requirements for overall more clinical staff, a 24/7 rule on presence of registered nurses (RN), and to make matters worse, an exclusion of LPNs. A significant source of contention, some industry insiders referred to the LPN exclusion as “a convoluted mess.”

“This will create an unattainable mandate and convoluted mess for providers who, once again, will be stuck trying to foot the bill for costly mandates. In the end, the problem will be less access to care,” Zach Shamberg, president & CEO of the Pennsylvania Health Care Association, told SNN.

These comments echo the overall sense in the sector that the Biden Administration’s staffing mandate is “deeply flawed,” with leaders criticizing both its stipulations and the poor timing of it.

‘Pedal to the metal’

Amid these concerns, in the early days after the proposed staffing mandate’s release, operators shared work initiatives that are currently underway to allow them to brace for the eventuality of a mandate, with an inevitable increase in overall staffing.

Amy Haug, chief human resources officer at CarDon & Associates, which owns and operates 19 senior housing and rehabilitation communities in Indiana, shared information about the upskilling initiatives that are meant to help the organization prepare for the proposed requirements as well as improve retention and hiring efforts.

“What we really want to do is just keep the pedal to the metal with hiring RNs and trying to source and retain,” Haug said. “And, we really have shifted a lot on developing our LPNs.”

‘Past the trough’

The CEO of Omega Healthcare Investors (NYSE: OHI) – one of the largest real estate investment trusts (REITs) in the sector – led the way in pronouncing that the sector was likely “past the trough” in early May.

And while staffing still posed challenges – with Omega executives noting that the federal government’s proposed staffing mandate could be problematic – the pain for the sector was seen as largely bottoming out.

“I’m cautiously optimistic that we’re past the trough. The fact that occupancy is closing at 80% — which is, from our perspective, a pretty good indicator — is important,” said CEO Taylor Pickett during the company’s first quarter earnings call.

Buoyed by improving occupancy for nursing home operators, executives likely held this optimistic view as the census showed continued recovery at the time. But the rise of occupancy levels flattened out by November, with labor pressures persisting in some markets.