For Steve Miller, president of Bridgemark
Healthcare, the challenges in leading a long term care operator at a time of
the COVID-19 pandemic has focused on providing the quality of care necessary to
prevent virus infections in buildings, and if there are infections to manage
residents back to health without having further spread.
Bridgemark, which has a total of 19
skilled nursing and assisted living communities in Illinois and Missouri, has
been fighting the COVID-19 pandemic like all of the other skilled nursing and
assisted living communities across the nation, and like many the ability to
care for residents and keep buildings and equipment up to par is a question of
finances.
Miller says the payer mix, all-in, for
Bridgemark, is 15 percent Medicare and 58 percent Medicaid, with a mix of other
reimbursement coming from areas like veterans programs and private-pay. The
company cares for about 1,969 residents.
As most understand in the long term care
business, the difference in reimbursement between Medicare and Medicaid is
stark, with many operators subsisting only because Medicare has paid enough to
account for what has been a perennial problem of insufficient Medicaid payments
to providers.
Miller says the rates in Illinois for his Medicaid
skilled nursing facilities (SNFs) historically averaged $149 per patient, per
day and $164 in Missouri, which both leaving the provider with a $30 to $50 per
patient/per day shortfall when comparing the reimbursement to the actual cost
of caring for a long term care resident.
“I’ve never experienced consistent cost
coverage from our Medicaid rates,” he says, noting this shortfall is before any
additional costs are considered for caring for residents during the pandemic, such
as huge increases in the use of personal protective equipment, extra staffing
hours and pay, and changes in operations to prevent infections.
“I’ve seen different studies that have
been performed in Illinois, which is where the majority of our communities are
located, that show anywhere from that $40 to $60 a day shortfall in Medicaid
rates,” Miller says.
Medicaid reimbursement has also not
improved much even as the nation’s economy improved greatly over the past 10
years, again, prior to the COVID-19 outbreak.
“My experience is that the economic
prosperity of the last 10 years has not translated generally speaking into
Medicaid funding…that’s not been really connected,” he says.
The irony of course is that the healthy
economy has actually fueled even more costs, since it takes more money to
attract workers to long term care given the low unemployment and the
competition for workers. “This is all before COVID,” Miller says.
During normal times the Medicaid shortfall
hits facilities hardest when it comes to daily decisions on upkeep of
buildings, for instance. “The financial adjustments that you make to account
for the Medicaid shortfall is obvious when it comes to the physical plant. So, when
you go into a Medicaid-driven nursing home in the markets where I operate you are
going to see an older building with a lot of tired, worn-out parts, a lot of scrapes
and scratches, and a lot of duct tape and bailing wire as they might say,” he
says.
“You will see that all the time we are
constantly behind the curve on physical plant updates and equipment replacement.”
Miller notes that one can also see the
impact of the Medicaid shortfall in terms of the kinds of dining programs that
can be offered. “They tend to be curtailed in communities like we operate,” he
says. “There are few extras, since there is not a lot of room in a budget.”
He stresses that the core components of resident
care are secure; there are no shortcuts on caring for people in Bridgemark
facilities. “We protect the quality of care by ensuring that we put the money
that we do have to nursing and CNA [cerified nurse assistant] services, and then
we try to manage as best we can on the nondirect care operations,” Miller says.
Given all of these shortcomings from the
Medicaid payment system, the start of the COVID-19 pandemic just added to the
problem. “It’s tough for sure,” Miller says. “The immediate effect we saw
almost out of the gate was that short-stay return-to-community admissions
essentially turned off overnight,” he says. These individuals are paid for
mostly by Medicare and provide healthier payments to providers, he says.
“What that did was lay bare the Medicaid under-funding.
The costs of caring for Medicaid residents rose because of the virus, but
reimbursement did not, and meanwhile we had lost the offsetting Medicare
margins,” Miller says.
One major area that was affected was the
cost of staffing as workers are understandably concerned about working in a
high-risk environment. Thus, Bridgemark provided premium pay structures to
employees working on the frontlines “so that they would be compensated for the
risks that they were taking and the stress and strain at a job which was being
placed on them,” he says.
That has come at a cost obviously,
increasing Bridgemark staffing costs 10 percent to 15 percent within 30 days of
the pandemic emergency.
Across the long term care profession,
there have been calls by government officials and the American Health Care Association/National
Center for Assisted Living (AHCA/NCAL) to test all residents and staff. That
also would be costly as new data from AHCA/NCAL said the combined cost for
COVID-19 testing of every resident and staff member in assisted living
communities in addition to nursing facilities would tally $672 million
nationwide.
What Bridgemark is experiencing when it
comes to Medicaid payment is not new and has been the subject of study for
years. For instance, a recent article in JAMA said COVID-19 has exposed
longstanding issues in “how nursing home services are structured and financed.”
“Medicare is a relatively generous
payer, whereas Medicaid often pays below the cost of caring for these frail and
medically complex individuals. Thus, the economics of nursing home care hinges
on admitting enough short-term Medicare beneficiaries to cross-subsidize the
care of long-term residents with Medicaid coverage,” the JAMA article
said.
With the COVID-19 pandemic, there
has been a dearth of short-stay Medicare beneficiaries coming into facilities as
hospitals “are not performing elective procedures like joint replacements so
patients who would ordinarily require post-acute care are not being referred to
nursing homes,” the article said.
This has resulted in increasingly
difficulty for nursing facilities because of decreased Medicare revenue and the
higher COVID-19 costs tied to managing residents, it added.
To help remedy the problem, the JAMA
article suggests broader use by SNFs of alternative payment models like
accountable care organizations and bundled payment models. “These models will
provide the necessary flexibility for COVID-19 care,” the article said.
For long-term SNF residents
recovering from COVID-19, authors said, “Medicaid must begin to pay a higher
rate commensurate with the costs of delivering high-quality long term care to
frail older adults. In many states, this will require greater federal
contributions.”