Category Archives: New Provider

Possible New Federal Medicaid Policies Put Pressure On States

Patrick Connole

With Congress weighing whether to alter how shared federal and state payments work in the Medicaid program under a Republican federal per-capita cap, the possibility of such a shift could leave long term and post-acute care (LT/PAC) providers much more focused on state policymaking moving forward.

That is the thinking of Robin Arnold-Williams, a partner and head of the Medicaid practice for Leavitt Partners in Salt Lake City, Utah, who tells Provider that if a per-capita cap comes to be then states will be faced with enormously tough decisions on “who they are going to cover and for how long.”

Of the many factors playing into how states decide, under a possible cap system, to allocate money to the various populations able to receive Medicaid funding (low-income elderly, disabled, pregnant women, etc.) is the Affordable Care Act’s (ACA) eligibility expansion. What the House Republican bill, the American Health Care Act, currently proposes is that enhanced federal funds, or matches under the ACA, will continue to be paid for enrollees on the books by Dec. 31, 2019.

So, states like Kansas, which is slowly moving forward in its legislature to possibly expand eligibility under the ACA for its Medicaid program, may want to act sooner rather than later in order “to get critical mass” and take advantage of the enhanced match of 90 percent, Arnold-Williams says.

How these state decisions on ACA eligibility directly affect LT/PAC funding is that if a state does or does not take on the more generous federal match and more enrollees, then they may or may not have more money for other buckets, or populations, in need of the capped federal funds.

All of this is very complex to understand, she explains, and will leave state Medicaid offices working overtime if the House Republican bill survives its trek through Congress.

“I imagine there are a lot of Medicaid directors looking at their data and trying to calculate that. That will take some sorting through,” Arnold-Williams says. “There are different per-capita rates for each group: children, adults, seniors and the disabled and the blind. It is one thing to say the money is going to flow to the state in those set per-capita rates by group, but it is quite another thing at the state level to say how that revenue will be allocated.”

An example of the tough math ahead is if you have different inflation costs for seniors and people with disabilities versus children, leaving states to allocate Medicaid budgets for these different groups and services within Medicaid without open-ended entitlement.

Some states, she says, will be more generous and may even weigh keeping their program open-ended with possible tax increases, decrease in health benefits, or other moves to pay for it, but more likely it sets up an intense period of competition between various Medicaid groups when the Republican proposal would go into effect in 2020.

“And one decision point in 2020 will be a state making a conscious decision to roll back ACA expansion in order to manage money better. It is hard to manage expansion and not have new people come on at lower match rate,” Arnold-Williams says.



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Where Have All The Good Times Gone?

Medicare patients and provider advocates may be ready to storm the Bastille after audit contractors denied skilled nursing treatment to patients in at least three states.

Fin de regime? Financial analysts are worried, après moi, le deluge(Art courtesy fine folks at WikiMedia Commons.)


Good morning, ProviderNation. Political economy has long been known as “the dismal science.” But some things are true even if Lord Halifax says they are, and a great many of those who follow the economics of long term and post-acute care are asking themselves, “Where have all the good times gone?”

Despite a record fourth quarter for mergers or acquisitions, “it looks as if M&A fever may have broken,” the fine folks at Irving Levin Associates say, gloomily, in their latest report. “This could be the start of something small.”

We’ve covered some of the concerns about a demographic dip at length in this space. Another factor, though, is that old Washington bugbear (which we’ve also covered at length), regulatory certainty. It’s not so much the scale of changes that are happening—it’s the pace.

Regulatory Squeeze

“I didn’t think it could get worse, but it’s going to do,” says Irving Stackpole, a veteran analyst and my own, private Eeyore. “It’s going to get worse because of pressure by CMS to move from volume-based payments to value-based payments.”

It’s notorious, Stackpole and others say, that providers have built their businesses around a large Medicaid population, subsidized by a lower Medicare population with higher turnover. Now, though, the margins are being squeezed from both ends.

Just last month, a key congressional committee passed a bill that would reduce the amount states can collect in provider taxes. It could cost up to 20 states more than $8 billion in Medicaid revenue (because of the various perversities of the current system).

Meanwhile, regulators are speeding through their massive Rules of Participation rulemaking, and Congress is weighing even further value-based purchasing bill for Medicare. The Rules of Participation alone could cost care centers up to $75,000 apiece, advocates at the American Health Care Association say.

Well, now, say all the dismal scientists, that’s how the game works—some win and some lose. Except, for Stackpole and others, those who are bound to lose are those who don’t have much to begin with.

“The SNFs that are serving the most vulnerable populations, those SNFs are going to go bust,” Stackpole tells me. “We’re going to see even more closures, more beds come offline.”

Small/Independent Jeopardy

Stackpole is not on an island here, either. AHCA’s own James Michel, who it must be said is not easily ruffled, says he’s worried, too.

“We are particularly concerned about access in smaller and rural communities where there may only be one or a handful of facilities operating. CMS’ new payment models are rooted in risk-bearing models that make it very difficult, if not impossible, for smaller and independent facilities to participate successfully while keeping their autonomy,” Michel tells me in an email.

“While highly competitive markets can bear some degree of consolidation and constriction of the market, because the demand can be absorbed by the competition,” he adds, “smaller and rural markets with fewer providers certainly cannot. And even if they could, that isn’t necessarily a good thing. There is a growing area of research on the relationship between provider and payer consolidation, and increasing health care costs. In its attempt to constrain growing health care costs, CMS inadvertently may be promoting payment and delivery models that reward consolidation and force the closure of smaller facilities, thereby increasing overall costs and creating access problems for our most vulnerable populations.”

But don’t worry too much, because it can get worse, Michel adds.

‘Silver Tsunami’

“All of this is happening as we teeter on the edge of the ‘silver tsunami,’ where we are set to experience a rapid growth in the number of older Americans who will need long term care,” Michel says. “Are we shooting ourselves in the foot by adopting payment and delivery models that will result in a constriction of our long term care infrastructure at a time when we are going to most need it?”

The regulatory trends are frightening enough. But consider, again, the apparent cooldown in Wall Street’s ardour for seniors housing. What we’re all witnessing is money fleeing a sector from all sides. And that’s before we even consider the seismic shakeup we may be facing as younger adults wake up to their own history.

“If you have a 25-plus-percent under- or unemployment rate among millennials, redistribution will happen around invested capital. What would come out of the system is the capital invested in the insurance sector—a huge amount of the $2.7 trillion that’s spent goes into the pocket of some very well-heeled insurance companies—and that’s where the pushback comes from,” Stackpole says. “How could that surprise you?”

‘A Race To The Bottom’

All of this is completely predictable, but rather dismal, to contemplate, Stackpole says.

“Consolidation is the hallmark of a mature business life cycle,” he says. “And that’s where we are. You could not find a better example of a business cycle moving from its early maturing to its late decline than skilled nursing. You’ve got consolidation, you’ve got closure, you’ve got growing awareness in the market—these are all hallmarks of a profession in late decline.”

But the rubber, inevitably must meet the road.

“The people who really need that nursing center are the families of people who have neurological disorders, the families of people who have Alzheimer’s and dementia, and the people who really need a cardiac or a pulmonary rehab,” Stackpole says. “What they’re going to have to do now is drive 65, 70 miles. Does that matter? Maybe not to some guy at CMS in Baltimore, but to the rest of those people, it sure as hell does.”

So, if you happen to bump into Irving at some conference or other, make sure you buy him a drink or two. He could certainly use it.

“It’s a race to the bottom,” he says. “An absolute race to the bottom.”

Mad Props Dept.

On that cheery note, a couple/three bouquets to throw out.

First, to the fine folks at It’s Never 2 Late, who this week have entered their 2,000th care center.

Second, to the good people at Benchmark Senior Living, who’ve just been named the Boston area’s healthiest employer.

Finally, to Delaware’s own Susan M. Levy, MD, who has just been named president of AMDA—The Society for Post-Acute and Long-Term Care.

Bill Myers is Provider’s senior editor. Email him at Follow him on Twitter, @ProviderMyers.



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A Ruthless World…


SCHERERVILLE, IND.—Good morning, ProviderNation. Jack Heaney could talk a dog off a meat truck, but he preferred to harangue his victims until the paint peeled off the wall. He and his 10 children were always arguing, often on different sides depending on what room they were in, and were generally the kind of folk a publisher friend of mine referred to as “bicycle seat Irish.”

To say that it would take a special woman to love such a man is a grave understatement. But the difficulty in describing Ruth Adams is that you constantly run the risk of understatement.

How to convey the sweet majesty of the woman? She was in constant motion, and it seemed that she relied on a renewable stream of love—from the kitchen bands she played for seniors, to the volunteering at the Apostolate of the Handicapped, to the dozens of children and grandchildren she took on as her own. For those of us who were lucky enough to know her (and, as often as not, to be loved by her), the thought of life without Ruth is almost as obscene as the thought of Ruth without life.

Her cookies were the stuff of legend; her “dippy do” fought over so much at Heaney family gatherings that she began bringing double, and then triple, batches. Ruth was Jack’s third wife—he’d been widowed twice—but within a few short months, she was “mom” to Jack’s children. To Jack’s grandchildren (all 27 of us), she was ever “Grandma Ruth.”

If she ever felt an outsider (and who could blame anyone for feeling that way amongst the Heaneys?), she never let on. She introduced each of her extended family as “my son,” “my daughter,” &c.

“Step,” Grandma liked to say, “is a four-letter word.”

Jack Heaney, sadly, died suddenly in 1988, and Ruth was widowed for the second time (the love of her life, Ed Mullin, died in 1972, leaving her to raise two kids on her own). She later married Wally Adams, a fellow retiree, and Ruth folded even more children into the family.

The extended children of all her marriages were by her continually until she died under the tender care of the fine folks at Chateau Nursing and Rehabilitation Center in Willowbrook, Ill. (to whom, many thanks).

There were upper limits to her decency. Let the coins clink into the old margarine tub, let the Hank Williams Sr. play on the CD, let the cards be dealt, and may God have mercy on your soul. Ruth had no gift for bluff (“Who dealt this doodly-squat?”; “I’ve got a dog from every county”) but she had an utter gift for crushing those adoring grandchildren who had dared to take their seats at the card table.

By happy chance, I talked with Ruth on Friday, just two days before she died. She was feeling nostalgic, but—as ever—counseled love. “Make sure you tell the kids you’re proud of them, Billy,” she said. “ ‘Cause that’s all that matters. This life—it goes by so quickly.”

Death be not proud.

Bill Myers is Provider’s senior editor. Email him at Follow him on Twitter, @ProviderMyers.








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Pax Dementia…

Divide et impera, Philip II of Macedon supposedly said. Will dementia govern the same way? (Photo courtesy the fine folks at WikiMedia Commons.)

Divide et impera, Philip II of Macedon supposedly said. Will dementia govern the same way? (Photo courtesy the fine folks at WikiMedia Commons.)


Good morning, ProviderNation. The great humanist and Holocaust survivor Israel Shahak was fond of analyzing a political situation and summing things up in his thick, Polish accent: “There are encouraging signs of polarization.”

You don’t have to be a Hegelian (and, indeed, Shahak was always more of a Spinozist) to appreciate the point that, sometimes, the best way for everyone to move forward is for everyone to go at it alone. The last few weeks have brought us dispatches reporting that the Alzheimer’s Association is unravelling. Several chapters, including in New York, Los Angeles, Austin, and San Diego, have splintered off from the main body. Whatever the other recriminations in the group, it appears that a long-simmering conflict that goes beyond the association (it’s the one hash-tagged #CareVCure) has finally boiled over.

‘What We Do Best’

Just last week, the former New York chapter announced that it had changed its name to “CaringKind—The Heart Of Alzheimer’s Caregiving.” Its leaders explained themselves thusly:

“In December, when we broke away from the national Alzheimer’s Association to return to our roots as an independent charity, we knew we would need a new name that exemplified the very core of who we were: an organization with more than three decades of experience developing and implementing innovative, creative, and leading-edge caregiving initiatives.

“So, we stepped back and assessed what we did best. And what we do best—where we have always excelled—is understanding the needs of New York City caregivers and providing them with the support they need to care with confidence today and, just as important, to plan for tomorrow…”

The battle over whether to spend the money on research or for immediate care has been a long time coming. But its not the only crack in the dementia façade. Just Tuesday, the fine folks at the Dementia Action Alliance issued their own white paper, calling dementia a human rights catastrophe.

Smaller, Better?

The splintering begins just as nearly everyone says that dementia is, or is about to become, a global pandemic, laying waste to entire societies. Why, then, do so many foot soldiers and field marshals in the battle against dementia seem so sanguine about a division, even a mutiny, in the ranks?

“Sometimes, smaller is better,” says William Mansbach, president and CEO of CounterPoint Health Services. “It’s only natural that in the early days of dementia research, a dominant association would eventually emerge as an aggregator of patient and caregiving education, as well as a primary funder of and lobbying force for more research dollars. But now we’re in what you can call the second generation of our understanding of dementia. With more knowledge of the disease, and a stronger sense of urgency to find a cure, newer associations dedicated to funding dementia research and getting information out to the public have formed.”

‘They Don’t Get The Answers They Need’

The Great Dayne DuVall, chief operating officer at the National Certification Board for Alzheimer’s Care, takes things a step further. If anything, he says, the split was overdue.

“There is little to no funding for the care of people with dementia—or their family caregivers,” he says. “I believe the splintering comes from the fact that many people think that the first place they should call when they are at wit’s end is the Alzheimer’s Association—and, in reality, they don’t get the answers or resources they need.

“My family knows this first hand because we faced this at every turn with my father’s battle with Alzheimer’s disease,” DuVall says.

Don’t know if it counts as an irony, but the mutinies come just as the Alzheimer’s Association seemed ready to recognize some of the care malcontents. Last summer, the association hired Doug Pace away from Advancing Excellence and gave him the explicit mission of building up a caregiving advocacy corps.

But DuVall points out that the association’s façade has been cracking for a while.

“Remember, 50 percent of the chapters originally voted against the current move being undertaken to become a single 501(c)(3) charity,” Duvall says. “I wonder how many of their members expressed their concerns of care versus cure through their votes. I hope the association will now pay attention and spend more of their annual budget helping families find the help they so desperately need.”

Divide Et Impera?

Still, DuVall is willing to acknowledge that splitting off carries a significant risk. Nearly everyone agrees that the battle against dementia is horribly underfunded. Conservative forces in the Alzheimer’s Association can argue (and probably are already arguing) that a divided force makes it that much harder to get the Big Public, and its politicians, to focus.

And that’s just to consider the (relatively) micro-view of dementia. On Monday, the Guardian published the first in a series of articles that purported to show that young adults in America are, for the first time in the history of this republic, poorer than retirees. The data may not check out, but the mood of the piece certainly seems to have captured the gestalt. Whatever else that means, it means that, should the (apparent) preferences of younger voters prevail in this or future elections, the already politically fraught terrain of “redistribution” will become even more dangerous because it will mean, literally, taking from the old to give to the young.

“A Captain,” Machiavelli argues, “ought, among all the other actions of his, endeavor with every art to divide the forces of the enemy, either by making him suspicious of his men in whom he trusted, or by giving him cause that he has to separate his forces, and, because of this, become weaker.”

The concept—divide et impera—wasn’t new even in Il Machia’s day, but those of us who live under the awful dispensation of Pax Dementia may yet rue its incredible power.

Bill Myers is Provider’s senior editor. Email him at Follow him on Twitter, @ProviderMyers.


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Rural Telecom Gets Some Friends In Congressional Places…

A bill that would help rural providers connect to the Interweb has gotten some new friends. (Photo courtesy the fine folks of WikiMedia Commons.)

A bill that would help rural providers connect to the Interweb has gotten some new friends. (Photo courtesy the fine folks of WikiMedia Commons.)

Bill Myers

Washington, D.C.—Good morning, ProviderNation. A bill that would allow skilled nursing centers to compete for tens of millions in government broadband funds has made some new friends.

U.S. Reps. Leonard Lance, R-N.J., Kevin Cramer, R-N.D., and Dave Loebsack, D-Iowa, have fixed their names to a “dear colleague” letter, urging their fellows “to support” the “common sense” behind the Rural Health Care Connectivity Act of 2015. The bill would change federal law so that skilled nursing centers in remote areas could compete for rural health care cash under the Universal Service Fund.

The fund, administered by the Federal Communications Commission, comes from surcharges on your phone and Interweb bills. It’s designed to help subsidize broadband services in areas where there isn’t a clear business case. But, thanks to one of those only-in-Washington kind of things, the FCC decided that they couldn’t share any of the rural health care subsidies with skilled nursing providers. (Don’t ask: the government sometimes works in mysterious ways.)

The letter is procedural: more like the beginning of a long process than the culmination of one. But for providers such as Good Samaritan, who’ve been pushing this boulder up a hill for the better part of two decades, every little bit must be helpful.

Second Wind Makes First Impression

Moving downstream from the high-tech to the low, mad props to the fine folks at Second Wind Dreams, whom you’ve met before. They’ve just inked a deal to provide their shock-and-awe-style training to caregivers at PruittHealth.

PruittHealth CEO Neil Pruitt Jr., says he’s “excited” about the new partnership and is sure that “we can make a positive, lasting difference in the lives of our 24,000 patients.”

Bill Myers is Provider’s senior editor. Email him at Follow him on Twitter, @ProviderMyers.



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Seniors Housing And The Age Of Irrational Exuberance…

Are we looking at senior housing bubble? (Photo courtesy the fine folks at Wikimedia Commons.)

Are seniors housing investors in for a real shock? (Photo courtesy of the fine folks at Wikimedia Commons.)

Bill Myers

Good morning, ProviderNation. Irving Stackpole is a man who is hard to impress. Stackpole, a veteran long term and post-acute care analyst who runs his own consulting firm in Boston, has already played Eeyore on providers’ chances in a bundled payment world, but earlier this week, he rang a fire bell in the night for the whole seniors housing sector.

This time playing Cassandra to the chorus, Stackpole comes right out and says, “Investors should be worried about oversupply” (emphasis, italics—and underline—all his).

“What’s amazing is the lack of caution,” Stackpole marvels, “despite the overall signs in the markets, and the devil-may-care attitude of some investors and developers. This may seem a troublesome detail, but occupancies are declining in most marketplace areas. The decline in occupancy isn’t because sales and marketing have collectively fallen asleep across the USA, it’s because the market for age-qualified individuals is declining.”

Demography As Destiny

For Stackpole, demography is destiny.

“From 1925 to 1945, birth rates in this country, and many parts of the world, plummeted due in large measure to the Great Depression and war,” he says. “These are the lowest birth rate years on record in the United States.”

That’s the very cohort, Stackpole says, that’s hitting America’s assisted living centers right now.

Now, Paul A. Samuelson famously disposed of stock viziers by pointing out that the market had correctly predicted “nine of the last five recessions.”

Irrational Exuberance

But those of us who’ve grown up in what might someday be called The Age of Irrational Exuberance have no right to ignore Stackpole’s warnings. That’s partly because he’s not the only one worried about oversupply.

But that’s also because “seniors housing,” as a sector of the economy, is only in its birth stages. (In 2009, for instance, not one of the nation’s largest real estate investment trusts bothered with seniors housing; today, three out of the top five do.)

Additionally, boosters have been arguing for at least a couple of years that seniors housing stock is undervalued. Yet the stocks remain stable, or even “disappointing,” and, in some cases, companies are under increasing pressure to sell.

The Danes Are Coming

Another reason to heed Stackpole is that he—like so many charming, sophisticated, and otherwise awesome observers—has his eye on the international dimensions of long term and post-acute care.

So it’s worth noting that the Danish invasion has begun.

On Tuesday, Ry, Denmark-based Pressalit Care announced that its height-adjustable toilet had won cUPC approval for the U.S. and Canada. cUPC is the Universal Plumbing Code. The announcement comes barely a week after a delegation of intrepid Americans traveled to Denmark to tour its long term and post-acute care sector; they returned with tales more wondrous than the Arabian Nights.

Bill Myers is Provider’s senior editor. Email him at Follow him on Twitter, @ProviderMyers.

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