Skilled nursing operators could soon face disastrous Medicare funding cuts, American Health Care Association President and CEO Mark Parkinson warned Thursday.
The Centers for Medicare & Medicaid Services (CMS) is expected to release its latest proposed payment rule for skilled nursing providers in the coming weeks. While the nursing home sector has successfully battled similar cuts in the past, the head of the nation’s largest lobbying and trade group has indicated that this year’s effort will be different – and again. more critical – than ever before.
“The tea leaves indicate that we have a real problem here. So we are working as hard as we can to make the best case that care homes have never been in a worse position and now would not be the right time for a cut,” Parkinson told Skilled Nursing News during a virtual event organized by the news agency on Thursday.
Parkinson pointed to the federal government’s comments on the possibility of recalibrating the industry’s relatively new patient-based payment model (PDPM) after determining that the model increased payments to nursing homes by about 5% over in fiscal 2020, for a total gain of $1.7 billion.
“Some analysts, including CMS, think we’re overpaid,” Parkinson explained.
Before the end of 2021, the Medicare Payment Advisory Commission (MedPAC) recommended a 5% reduction in base payment rates for nursing homes in fiscal year 2023.
The recommendation – which was informed in part by what MedPAC called “bounced” industry deals – drew groans from vendors and industry leaders, though it wasn’t entirely unexpected.
Parkinson, in his comments on Thursday, hinted that the backlash CMS faced when the $1.7 billion increase was announced could put pressure on the agency to continue the cuts as the PDPM was “supposed to be” budget neutral.
Although the nursing home industry has made significant gains over the past two years, its recovery from the COVID-19 pandemic continues to this day.
Before the pandemic, nursing home occupancy was around 80% and at its lowest point – in December 2020 – the sector fell to 67%, according to Parkinson.
“We gained 6% of that in the first six months of 2021,” Parkinson explained. “We were making a nice steady recovery and were on a trajectory that looked like we were going to be recovered by the end of 2021 before the delta hit.”
Following the emergence of the delta variant, industry occupancy did not decrease, but it also did not improve much over a seven-month period.
“It was really painful to be at 73% for seven months in our recovery,” admitted Parkinson. “Over the last four weeks we’ve seen a 1% increase, so we’re at 74%, but I’d say we still have at least a year to recover.”
With occupancy still falling and staff shortages forcing some facilities to close, Parkinson thinks the cuts could spell disaster for the sector, and he plans to lobby policymakers about it in the coming months.
Why this year is different
Although Parkinson admitted the MedPAC recommendation wasn’t much of a surprise, he thinks it might be harder to talk about it this time around compared to previous years.
“It’s not uncommon for MedPAC to suggest that we get a cut and we’re pretty used to being able to convince CMS policymakers that they shouldn’t do that…this year it’s going to be really tough,” he explained during the webinar. .
MedPAC recommended similar reductions for nursing homes in 2020, but CMS did not follow the recommendation at the time.
While Parkinson isn’t sure what CMS will ultimately come up with, he said the industry needs to be prepared for “the very strong possibility” that cuts are coming.
A 60-day comment period will follow the announcement of the proposed payout rule, after which CMS will publish a final rule with new payouts taking effect in October.
The current situation reminded Parkinson of what happened in 2011, the last time the industry underwent a significant change in its payment model following fixes to the Resource Utilization Group’s (RUG) legacy system.
“That first year, we were overpaid by 12%, according to CMS,” he said. “And they completely cut it the following year.”
He described the move as a “huge shock” for the sector, as publicly traded companies were cut in half and real estate investment trusts were “gutted”.
“It was a really tough time,” Parkinson said.
It was around this time that HCR ManorCare – which was eventually acquired by ProMedica – began to fall behind on its rent payments, which eventually led to it filing for bankruptcy.
“We thought going into 2020 that we were going to have a big battle on our hands over PDPM and if it was budget neutral then the pandemic happened,” Parkinson explained.
“Now fast forward to where we are today and now they’re saying they’re not sure they can let it go anymore,” Parkinson said.
Parkinson told SNN he had several positive meetings with several federal government officials throughout this week, including CMS Administrator Chiquita Brooks-LaSure and HHS Secretary Xavier Becerra, as well as several home providers. of retirement.
“They need to hear what’s really going on in the buildings from the suppliers,” he said.
He said suppliers of varying sizes met with Brooks-LaSure specifically to discuss current labor challenges facing the industry and how that has impacted the recovery of the industry as they remain committed to quality.
Parkinson said the group had a meeting with a senior White House official on Friday. It’s part of the association’s strategy to speak with as many government officials as possible about the challenges facing the industry before the AHCA Congress briefing in June.
Parkinson doubled down on his comments that this year’s Congress briefing will be among the largest in industry history. He also thinks the timing is “perfect” in more ways than one.
“We hope to have 500 to 600 vendors in DC and they will go all the way to Capitol Hill to meet with their members of Congress and one of our main demands will be to weigh in with CMS, HHS and the administration on our payment, so the le The timing of this whole effort is absolutely perfect,” Parkinson explained.
On top of that, the public health emergency extension, which Parkinson hopes will be extended in the coming weeks, could be renewed in mid-June, shortly after the AHCA event.
No quick fix for staffing
Parkinson also met with House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer on Tuesday to discuss funding for the industry and arguably the most critical issue currently facing the sector: the staffing.
He said during the webinar that he indicated that the AHCA would begin “beating” and “sowing the seeds” for more comprehensive immigration reform to bring additional workers into nursing homes across the country. ‘foreigner.
“Immigration reform would be one of the things that could help us more than anything else [when it comes to staffing]”, Parkinson said. “There are millions of people who want to come to the United States and work, it would help on so many different levels.
While Parkinson plans to start “making noise” about immigration again, he admitted that reform is unlikely to happen given the current partisan divide in Congress.
The AHCA has pushed lawmakers to change the country’s current immigration visa prioritization to consider prioritizing the entry of internationally trained nurses and healthcare workers into the United States before the end of 2021.
“We’ve shifted our focus to administration, and there are things administration can do that can expedite people who have already been approved,” he said. “It doesn’t solve the macro problem of being short 238,000, but there are thousands of RNs…who couldn’t get their interviews because of COVID.”
He said he continues to “beat” to see this process become more streamlined.
Curbing skyrocketing agency costs has been another strategy advocated by the AHCA to help deal with rising staffing costs, though progress has been slower than expected, Parkinson said.
“I’m really surprised that when I spoke to the providers, they didn’t see any relief from the agencies,” Parkinson said. “I would have thought that now we would start to see a drop in these prices, but that hasn’t happened.”
Parkinson remains hopeful that simply drawing attention to him at the federal level will have an impact.
“We’re not going to pass a law at the federal level,” he said. “But I think there are a handful of states that can pass laws that will limit how much agencies can charge.”