Following significant leadership changes recently at PACS Group, new initiatives are afoot at the nursing home giant as it continues to expand its footprint.
To discuss these endeavors, Skilled Nursing News sat down with the new leadership at PACS, whose affiliates operate more than 200 facilities in nine states – 58 of these acquired in 2023 alone. Many of the efforts are related to improving acquired facilities through centralized workforce initiatives, clinical enhancements and technological integration, and are starting to pay off. PACS has observed better occupancy rates and clinical metrics.
Derick Apt, who has been appointed as the new CFO, plans to focus the company’s investment strategies towards streamlining financial operations and integrating newly acquired facilities into the company’s portfolio. Apt succeeds Mark Hancock, who transitioned to the role of executive vice chairman, and will provide guidance on driving the company’s growth in his new role. Meanwhile, PJ Sanford, who has been named President of PACS Services, a subsidiary of PACS, will oversee support services for PACS. These executives said that removing administrative burdens and improving recruitment and training of staff remain key goals for the organization.
Turning around ‘underperforming’ facilities
Reflecting on the challenges facing the industry, Hancock told SNN that he will prioritize balancing growth opportunities with the need to address financial pressures and staffing shortages. He emphasized the critical role of quality care in driving operational success, even in challenging times.
“We’re taking over facilities that are underperforming,” he said. “[These facilities] have been mismanaged, creating the opportunity for us to come in, and provide a better clinical product. Through the efficiencies that PACS Services provides, some of the benefits of scale [come into play] where we can make their lives easier – and that is all reflected in the care metrics. It’s reflected in the occupancy. It’s reflected in the referrals.”
Hancock also addressed the issue of reimbursement lag, both from Medicare and state Medicaid funding sources, attributing it to inflationary pressures. He highlighted the importance of regulatory support and adequate reimbursement from states and payers to ensure the continued provision of quality care.
“We need some of the other states and reimbursements and payers to kind of catch up to the inflationary pressures that we’ve seen so that providers can continue to provide a quality product,” he said.
Hancock underscored the efforts made by PACS Group to address staffing challenges within the skilled nursing sector, particularly in the wake of the “great resignation” during the pandemic. He emphasized the importance of providing a conducive environment where staff are well-trained, equipped, and supported.
“We’ve got centralized recruiting initiatives, with regional recruiters assisting locally or [we use] centralized platforms to find and source staff,” he said. “We’ve also got training development programs that provide opportunities for tuition reimbursement or continued education programs. This allows nurses to enhance their skills, stay current, stay trained, and progress in their career paths.”
He noted that these efforts have contributed to the rebound of occupancy rates to pre-pandemic levels. Additionally, Hancock discussed the inflationary pressures leading to higher wages in staffing, particularly in contract nursing, highlighting the need for federal regulation of staffing agencies.
“We’re a long way to go from having that pendulum swing back in the favor of just [workforce] availability of clinical teams and staff and CNAs.”
Financial integration of newly acquired facilities
In his new role, Apt told SNN his focus will be on optimizing investment strategies, streamlining financial operations, and integrating newly acquired facilities into the company’s portfolio.
“If you look at the history of PACS Group, we’ve grown by about 20 buildings over a year over that time period and, and we will continue to do the same,” Apt said, noting that PACS acquired 58 facilities last year. “We continue to try to be as disciplined as possible with many opportunities out there to continue to grow our platform and touch more lives.”
One significant aspect of PACS’ strategy involves investing in the improvement of work environments and patient facilities,” he said. This includes refurbishing existing facilities and evolving their portfolio to meet changing needs. Apt said another focus will be integrating recently acquired facilities into PACS’ operational framework.
“Making sure we’re utilizing our capital the best we can with that many acquisitions [especially because] many of the facilities were distressed,” he said. “They need physical plant improvements, maybe improvements to just remodel or equipment in the building. So, [we will be] continuing to employ our capital that we’re generating from other operations to improve those facilities over the coming year.”
Alleviating administrative burdens
Sanford, who has been with PACS since its inception, said his goal is to alleviate administrative burdens and empower local leadership teams to focus on delivering high-quality patient care.
Sanford discussed the ongoing efforts to integrate PACS’ medical records system to ensure accurate PDPM rates, and using the integration to address denials from insurance providers and validate claims.
“We are working on an integration with our medical record that would assist us in our PDPM making sure that we’re capturing our PDPM rate in an appropriate manner. We’re also using that to produce denials or to respond to denials from our insurance providers that we often get.”
Additionally, the integration overlays with the Microsoft Office Suite, facilitating administrative tasks such as email management and creating presentations. Sanford said the development of backend applications to enhance operations, with the Office Suite integration, is expected to be a smooth rollout.
“It’s a powerful tool. It will alleviate the clerical tasks that AI can help with. The other thing that we want to do is just provide a sound consulting platform for legal decisions for HR decisions,” he said.
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