With 2012 right around the corner, the Senior Housing News staff will be taking a short break from posting stories as we get ready to ring in the new year.
We’d like to thank everyone for your support and readership in 2011, and we hope SHN will remain a top source for all your industry news.
Check back on January 3, and until then—Happy New Year!
-The Senior Housing News Staff
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Home health care is being made available for up to 10,000 Medicare patients through a health care reform law demonstration that seeks to improve care and lower costs for seniors and people with disabilities, announced the Centers for Medicare & Medicaid Services (CMS).
“This program gives new life to the old practice of house calls, but with 21st Century technology and a team approach,” said CMS Acting Administrator Marilyn Tavenner.
The demonstration was developed through the Affordable Care Act, and will expand the scope of in-home services that Medicare beneficiaries can receive; participation is voluntary.
In my days as a practicing nurse, I saw many patients whose health improved when they were happier with their living conditions,” said Tavenner. “When a critically-ill patient can remain in familiar surroundings, the benefits are many: the person retains greater control over their daily lives, families and caregivers report greater satisfaction with the care, and unnecessary hospitalizations are avoided.”
CMS plans to partner with medical practices led by physicians or nurse practitioners to test the effectiveness of delivering primary care services in a home setting on improving care for the needs of Medicare beneficiaries with multiple chronic conditions.
Healthcare providers that show a reduction in Medicare expenditures will be rewarded through the demonstration program through incentive payment, if they succeed in providing high-quality care while reducing costs.
CMS will use “quality measures to ensure beneficiaries experience high quality care,” in keeping with its series if initiatives to build a Medicare program that offers beneficiaries “better care and better health at an affordable cost.”
The demonstration will be supported by the CMS innovation Center, which was created by the Affordable Care Act to develop and test new models of health care delivery and payment.
More information on the program can be found here.
Written by Alyssa Gerace
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Despite the slowness in the real estate market, there is some local activity in seniors housing construction, reports the Chicago Tribune.
Two projects, one on Chicago’s north side, and another in a northern suburb, represent a couple different stages on the development spectrum. Exterior construction for The Admiral, a $200 million, 31-story North Side retirement high-rise, was recently completed; the building replaces a retirement facility that was torn down in 2007, says the article.
The new building should be finished in April, with interior work currently underway. Upon completion, it will have 200 apartments, including assisted living units and nursing care suites.
Construction on the other project, located in Northbrook, Ill., is expected to begin in the next several months. The building will have 57 independent living units as well as on-site amenities and activities.
“The Chicago region traditionally has been one of the country’s most active markets for retirement projects,” says the Chicago Tribune article, going on to cite data from the National Investment Center for the Seniors Housing and Care Industry of 1,500 units of senior housing under construction, the most of the top 31 metropolitan areas in the nation.
However, new senior housing projects face headwinds, with expensive communities requiring large upfront entry fees and a slow housing market that can delay people from being able to sell their homes and move into retirement communities, reports the Tribune.
Despite other senior communities running into financial difficulties, including The Clare at Water Tower in Chicago’s Gold Coast filing for Chapter 11 bankruptcy and The Clare Oaks continuing care retirement community in Bartlett, Ill., filing for bankruptcy protection, the Admiral is “bucking the trend and moving forward.”
The project has gotten a boost thanks to expertise from the Kendal Corp., an experienced retirement community operator that was brought in to provide technical advice and operating systems, the Admiral’s president and CEO told the Chicago Tribune.
“Kendal has a track record of operating these communities successfully,” he said in the article. “Their involvement gave everyone confidence.”
So far, about 80% of the building’s one-, two-, and three-bedroom units have been reserved; entry fees range from $300,000 to $900,000, with additional monthly fees depending on unit size and contract.
The retirement community in Northbrook also charges entry fees, but will not offer on-site assisted or nursing care. For The Lodge of Northbrook, entry fees will range from about $85,000 to $528,000, the article reports. For both projects, entry fees are refundable once units are resold or transferred to a new owner.
Developed by Essex Corp., a senior housing company based in Omaha, Neb., The Lodge is expected to be ready by the spring of 2013.
Read the full Chicago Tribune article here.
Written by Alyssa Gerace
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The senior care industry is becoming more and more progressive as it continues to utilize new developments in technology to provide better and more efficient care. Senior Housing News has rounded up some new products and platforms along with an end-of-the-year technology article that wraps up 2011 and lists trends that are worth following in the coming year.
1. Independa: Integrated Telecare Suite for Independent Elderly
In early 2012, Independa, Inc. will launch Artemis, a new monitoring platform of health, safety, and activity sensors that will expand caregivers’ ability to help the elderly to safely and healthily remain living at home with the help of cost-effective virtual care.
2. Aldebaran Robotics: NAO Next Gen Robot
Aldebaran has released its latest version of the NAO robot, which can be used to care for those losing their autonomy and was created with the aim of contributing to humankind’s well-being. Features include a new on-board computer suitable for multi-tasking calculations, two HD cameras, and a new, faster and more reliable vocal-recognition program.
3. Vigilan: iPhone/iPad Mobile App for Nurse Charting
Available in March 2012, senior living software provider Vigilan announced earlier this month a new, free mobile application that enables the collection of assisted living resident vital signs to an iPhone or iPad that can help nursing staff save time by eliminating the need for paper charting and data entry. The software is HIPAA-compliant and can download resident basic data from the Vigilan Administrator database.
4. Bupa Health Foundation and Alzheimer’s Australia Release Brain Health App in the UK
The Bupa Health Foundation and Alzheimer’s Australia announced the UK launch of BrainyApp, a “world-first” brain health application, earlier this month. The iPhone, iPad, and iPod app is designed to help people improve their brain-heart health by monitoring the physical, mental, dietary, and social aspects of their lifestyle. The app allows users to take a brain-heart survey about their diet, exercise patterns and lifestyle, and then provides suggestions for how to make improvements in each.
5. Aging In Place Technology Watch: 2011 Wrap and 2012 Trends to Watch
Aging in Place Technology Watch’s December 2011 Newsletter runs through senior care technology announced or launched in 2011 and provides predictions for the upcoming year. Applications and other devices to help seniors remain at home feature prominently as technology developments that will shape 2012.
Written by Alyssa Gerace
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The U.S. Department of Health and Human Services (HHS) released more than $845 million to states on Dec. 22 to help low-income households with their heating and home energy costs, as part of the Low Income Home Energy Assistance Program (LIHEAP).
“Even as the economy shows signs of improvement, many Americans are struggling to make ends meet,” said George Sheldon, HHS acting assistant secretary for children and families. “We are making funds available today to help vulnerable families and seniors pay their heating bills and stay warm during this holiday season and into early 2012.”
The heating program helps low-income households, including families with seniors, with their home energy needs. This encompasses air conditioning in the summer and heating in the winter, in addition to insulating homes to make them more energy efficient and reduce energy costs.
The $845 million grant comes in addition to the $1.7 billion that has been released to states since October 2011, bringing the total states have received to $2.581 billion in LIHEAP block funds for fiscal year 2011.
Written by Alyssa Gerace
Specialty investment bank Ziegler announced on Dec. 12 that it successfully closed a $7 million fixed-rate tax-exempt bond issue for Total Longterm Care, Inc.
TLC was formed in December 1989 to establish Colorado’s first Program of All-inclusive Care for the Elderly (PACE), and it began its PACE operations in Denver.
Since then, it’s grown from one initial location to 1,800 participants across five centers that serve the entire Denver metro area, and now a new PACE location will be in San Bernardino, Ca., where land and existing buildings were just purchased.
“Total Longterm Care’s leadership has proven highly adept at managing the service-intensive, capitated PACE business,” said Mary Munoz, managing director in Ziegler’s Senior Living practice, in a statement. “We view PACE as a prototype for true person-centric care, a foundation for effective healthcare delivery.”
Written by Alyssa Gerace
The senior housing and care industry has experienced its share of ups and downs throughout 2011, from favorable demographic growth and recovering occupancy rates to Medicare cuts and lack of new construction capital. Here’s a list of the most-read stories published on Senior Housing News this past year, in descending order of popularity.
#1. August 10: Shift Away From Nursing Home Care Reveals Challenges. In the past ten or so years, there’s been a national trend away from nursing home care in favor of other forms of care, including home health care or assisted living, and this trend coupled with Medicare reimbursement cuts pose challenges to the skilled nursing industry.
#2. June 12: Number of Senior Households to Increase 35% by 2020 says Report. A report from the Joint Center for Housing Studies discusses the impact the impending wave of baby boomers will have on the housing market as they approach retirement.
#3. October 26: HARP 2.0: Obama Administration’s Revised Policy to Further Aging In Place. The Obama Administration releases a second version of its Home Affordable Refinance Program with features that could help increase monthly cashflow, among other benefits, for qualifying seniors.
#4. May 2: Senior Housing Occupancy Rates Rise, Inventory Growth Hits Record Lows During Q1 2011. The senior housing market heads toward recovery as occupancy levels rise while inventory shrinks, shifting supply and demand fundamentals.
#5. January 19: U.S. Home Remodeling Industry Could See Bull Run Start in 2011. A Joint Center for Housing Studies report points toward lower household mobility as more people choose to remodel their homes rather than move and purchase new ones.
#6. September 15: What is Holding Back New Construction in Senior Housing?. Despite the hype about the growing numbers of retirement-age baby boomers, construction starts for senior housing remain low, due primarily to difficulty in financing projects.
#7. June 21: Criticism from Congress Forces HUD to Provide More Support for Senior Housing. Congress calls out HUD on the substantial backlog of Section 232 applicants in the HUD queue, prompting the department to hire extra staff to speed up the underwriting process.
#8. September 25: Nuns Default on High End Senior Living Facility, Biggest of the Year. A senior living facility financed by the Franciscan Sisters of Chicago defaults on its municipal bonds, with blame placed on the poor economic and housing environment.
#9. September 18: Medicare Cuts Will Cripple Home Health Agencies says Report. Proposed changes to the home health prospective payment system by the Centers for Medicaid and Medicare Services would lead to negative Medicare financial margins for more than half of all home health agencies, according to a report analyzing data from the proposal.
#10. August 23: CMS Medicare Cuts Drive Nursing Home Operators to Economic “Tipping Point”. Healthcare providers respond to the 11.1% cut to Medicare reimbursement rates, with some pointing to the industry’s already slim operating margins.
Written by Alyssa Gerace
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Ohio legislators are aiming to improve the quality of care provided in state nursing homes through new requirements that will affect the amount of Medicaid reimbursement they receive, but some administrators think the standards are too easy to meet, reports Cincinnati.com.
Senate Bill 264, sponsored by state senator Shannon Jones, ties higher reimbursements to 20 new quality measures.
However, nursing homes only have to meet five of those measures in order to get a higher daily reimbursement, and some say that this isn’t much of a challenge.
“They’ve set the bar so low that everybody’s going to get” the money, the article quotes Ken Huff, vice president and CFO of Maple Knoll Communities, a non-profit that operates nursing homes and assisted living facilities in Springdale and Oxford, as saying.
State officials from the Office of Health Transformation counter by saying that they “want 100 percent” of the state’s nursing homes to meet the new standards, according to the office’s spokesperson Eric Poklar, reports Cincinnati.com
“Then at some point you adjust [the standards] up and turn this into a continual quality improvement program,” said Poklar.
The Office of Health Transformation was created by state governor John Kasich to “curb the state’s Medicaid spending and improve the performance of the health care system,” says the article, and the idea behind this bill is to get the state’s more than 900 nursing homes to focus on quality.
Ohio’s budget, which went into effect in July, set aside $300 million for the shift in quality payments beginning July 1, 2012.
Some smaller for-profit nursing homes are unhappy with the proposal as it will take Medicaid reimbursement dollars that the state previously paid out, reports Cincinnati.com.
“Now they’re going to make us earn it back” while still providing better care at the old reimbursement rate, said Chris Murray, director of economic and policy analysis for the Academy of Senor Health Sciences Inc., a Columbus-based trade group, in the article.
“The new measures include 20 indicators, including whether a nursing home lets at least half of its residents decide when they get up and go to bed and whether it lets at least half of its residents eat when they’re hungry, instead of at set times,” says the article. “Others indicators include boosting the number of single-occupancy rooms, limiting the percentage of patients who complain of pain and limiting the use of paging systems to emergencies.”
The bill was sent to the governor on Dec. 16 after passing its third consideration on Dec. 14 from the House, and is expected to win final legislative in the near future, reports Cincinnati.com. The Senate previously approved it on Nov. 30 by a 31-0 vote.
Read the full Cincinnati.com article here.
Written by Alyssa Gerace
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A recent bipartisan proposal that aims to strengthen the Medicare program was blasted by the White House as “radical,” reports CBS News.
The plan, introduced by Representative Paul Ryan (R-Wisc.) and Senator Ron Wyden (D-Ore.), would “end Medicare as we know it for millions of seniors” and would “undermine, rather than strengthen, Medicare,” according to White House Press Secretary Jay Carney, because it would “raise premiums, forcing many seniors to leave traditional Medicare and join private plans, and it would shift costs from the government to seniors,” CBS reports.
Ryan and Wyden’s proposal would give seniors the option of getting traditional Medicare or their own private insurance, and they’d get a subsidy, called “premium support,” to spend on either option, says the article. It would not go into effect until 2022 and would keep the Medicare eligibility age at 65.
Read the full CBS News article here.
Written by Alyssa Gerace
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A 57-unit assisted living facility located in Walnut Creek, Calif., approximately 32 miles east of San Francisco, recently sold for $11.3 million, or $198,246 per unit.
The sale was brokered by Rob Reis, a senior associate in Marcus & Millichap Real Estate Investment Services’ San Francisco office. He represented both the buyer, a national owner/operator, and the seller, a local developer.
“Tiffany Court has an outstanding reputation in the community,” Reis said in a statement. “The property was developed, owned, and operated by the seller.”
The facility opened in November 1996 and within three-and-a-half months was fully leased, according to Reis.
At the time of sale, Tiffany Court was 95% occupied.
Written by Alyssa Gerace
Ventas, Inc. (NYSE:VTR) and Cogdell Spencer Inc. (NYSE:CSA) announced on Dec. 27 that the Boards of Directors of both companies have approved a definitive agreement under which Ventas will acquire Cogdell and its 72 high-quality medical office buildings in an all-cash transaction.
At closing, Ventas’ investment, including its share of debt, is expected to approximate $760 million to $770 million, before anticipated transaction expenses.
“We are delighted to announce this strategic and accretive acquisition that further broadens our footprint in the attractive MOB sector, continues to diversify our business and tenant relationships and keeps our balance sheet strong,” Ventas Chairman and Chief Executive Officer Debra A. Cafaro said in a statement. “Cogdell’s high-quality properties enhance our medical office building market presence, especially in the southeast, and provide an opportunity to scale our Lillibridge Healthcare Services subsidiary platform. We look forward to successfully integrating the Cogdell properties into the Ventas portfolio.”
Shareholders of Cogdell common stocks and units of limited partnership interests in Cogdell’s operating partnership, Cogdell Spencer LP, will receive consideration of $4.25 per share (or unit), a premium of 8% to Cogdell’s closing price on Dec. 23, 2011, and 13% to the average closing price of Cogdell common stock over the past 30 days, under terms of the agreement.
This consideration, plus anticipated transaction expenses, values Cogdell’s properties at a low- to mid- 7% net operating income yield, or slightly over $200 per square foot. Holders of Cogdell’s preferred stock will receive consideration of $25 per share, plus accrued and unpaid dividends through the closing; Cogdell will pay its currently declared common stock dividend as scheduled on Jan. 19, 2012, at which time Cogdell LP will pay a similar distribution on its outstanding limited partnership units. Cogdell and Cogdell LP will not pay further dividends or distributions on their common stock or units pending consummation of the transaction.
Out of the acquired medical office buildings, 68 are stabilized, and are 92% occupied, with two leaseup and two in development, for 4.2 million square feet. For the management business acquired, 44 are medical office buildings, with 2 million square feet.
Ventas’ MOB portfolio will increase from 11% to 15% of total net operating income.
“When this acquisition is completed, Ventas will have the leading MOB business in the U.S., with over 20 million square feet owned or managed, and a coast-to-coast presence that is second to none in the healthcare real estate industry,” Ventas Executive Vice President of Medical Property Operations Todd W. Lillibridge said. “We continue to build on our 25 years of experience exclusively in the medical office building and outpatient arena for the benefit of our clients and stakeholders.”
The transaction is expected to be immediately accretive to Ventas’ normalized funds from operations, approximately $0.03 to $0.05 per share on a full year basis excluding merger related, transition and integration costs and expenses. The company anticipates that Cogdell’s debt balances are expected to increase, and its cash balance expected to decrease, between now and the closing, principally due to Cogdell’s ongoing development projects and its contribution to Erdman, its design-build and development business.
Prior to completion of the Ventas transaction, Cogdell reached an agreement to sell Erdman to an affiliate of Lubar & Co., a private equity firm affiliated with David Lubar. Mr. Lubar had previously held an equity stake in Erdman before it was sold to Cogdell in 2008; the transaction will include all assets and liabilities of the Erdman business, including approximately $11 million in projected net working capital on the Erdman balance sheet.
Cogdell will contribute approximately $12 million to its equity capitalization, with a roughly equal amount to be contributed by an affiliate of Lubar & Co, in order to capitalize Erdman, according to the company. While the agreement currently contemplates the sale of Erdman for nominal consideration, it also allows Cogdell to solicit better proposals for the Erdman business over a 45-day period, with Cogdell shareholders receiving any additional proceeds resulting from a sale of the Erdman business to an alternative party, less incremental costs associated with such sale.
Completion of Ventas’ acquisition of Cogdell is expected to occur in the second quarter of 2012, subject to the approval of Cogdell shareholders, satisfaction of customary closing conditions, and the successful completion of the sale of Erdman.
Written by Alyssa Gerace
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Supportive living facilities (SLFs), Illinois’ affordable assisted living program, is in danger of needing life support since the state hasn’t paid out regular Medicaid reimbursements since July 2011, according to several local operators.
Like many other states across the nation, Illinois is facing a budget crisis that is deeply impacting SLFs as they struggle to remain operating despite inadequate funds.
For most facilities, the number of residents whose care is funded through Medicaid far outnumbers the “private pay” residents, and it’s these facilities that are being hit the hardest.
“Places will have to shut down if payments don’t come soon,” says Nancy Kapp, president of the Renaissance Company, which owns and operates the 107-unit St. Luke Renaissance at Greenview Place in Chicago. “You can’t go on like this.”
Some state providers have gotten word that they’re supposed to receive a payment before Christmas, a promise that many are depending on with payments currently more than 150 days behind.
While Kapp says her facility is not in imminent danger of shutting down in the next month or so, she says it could face closure in the next couple of months if it still hasn’t received payment.
Across the state, about 16 facilities have been able to get on an expedited payment program, says Bob Schleicher, managing member of St. Francis Woods LLC, which operates a 92-bed SLF in Peoria, Ill. In order to be eligible, their Medicaid population must be at 80% or more, and their asset-to-liability ratio at 1.1, he says, and while only 16 were in the program the last time he checked, there are a “whole lot more facilities that are on the periphery of those numbers.”
Unfortunately for St. Luke Renaissance at Greenview Place, even though its resident mix is more than 80% Medicaid, its capital reserves barred it from eligibility for the expedited payment program, says Kapp, and according to Schleicher, the state is trying to change the requirements of the program that would further disqualify other facilities by changing the asset-to-liability ration to 1.5.
On a day-to-day basis, many of the state’s 133 operating facilities are struggling to continue business as usual.
“They’re having a hard time finding money to pay vendors and staff; they’re using lines of credit or reserves, but that’s rapidly coming to an end,” say Wayne Smallwood, executive director of the Affordable Assisted Living Coalition.
The lack of reimbursement could cause some to go out of business, and the facilities that operate only one or two units are most at risk, he says. About half of the facilities are smaller operations with one or two buildings, while the other half are generally owned by those who operate five or more facilities.
“The small ones feel the impact quicker,” says Schleicher. “We don’t have as large of reserves, or as large of a capital bank.”
And even the big ones are feeling a pinch. “You can only move money within your large organization so much before you’re handicapped,” he says.
“It all hinges on what the governor and the assembly do to solve the state budget problem,” Smallwood says, adding that Illinois has the “highest per capita deficit.”
The situation isn’t looking good, and Schleicher and fellow managing agent for St. Francis Woods LLC Nancy Lee-McQuillan say there isn’t a clearcut solution.
“Without the state doing what they agreed to do, which is pay us on a monthly basis, we can’t operate a facility,” says Lee-McQuillan.
“We can’t seem to get an answer of how this can get fixed,” Schleicher added.
A recent state Medicaid study conducted by Eljay, LLC on behalf of the American Health Care Association (AHCA) predicts that the shortfall in Medicaid funding for seniors’ long term care needs will reach $6.3 billion in 2011.
“Limited state resources, sagging state economies and continued rebalancing efforts are reflected in that at least 60% of states that have either reduced Medicaid rates or provided no Medicaid rate increases for FY 2012,” said Joseph Lubarsky, president of Eljay, LLC and author of the report, in a statement.
The Illinois Department of Healthcare and Family Services did not provide a comment on the situation as of press time.
Written by Alyssa Gerace
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Bipartisan legislation has been introduced to require Medicaid to reimburse 90% of Medicaid providers—including skilled nursing facilities—within 30 days, and any remaining claims within 90 days.
H.R. 3587, Fair Pay to Medicaid Providers Act of 2011, seeks “To amend title XIX of the Social Security Act to provide for the application of Medicaid prompt pay requirement to claims for payment for covered items and services furnished by any Medicaid health care entity.”
The bill, sponsored by Representative Brian Bilbray (R-Ca.) and co-sponsored by Representative Anna Eshoo (D-Ca.), was introduced to the House Committee on Energy and Commerce on Dec. 7, 2011.
“Any delay of payment for care provided to patients can jeopardize facility operations and make it difficult to pay employees,” said Bilbray in a statement. “This legislation guarantees that healthcare providers are paid in a timely manner so that they can focus on helping those in need without worrying about how they are going to meet their financial obligations.”
Some states, such as Illinois, are currently experiencing difficulty in operating senior care facilities because of late Medicaid payments, and a recent state survey conducted for the American Health Care Association projects a $6.3 billion Medicaid funding shortfall to nursing homes in 2011. Most supportive living facilities in Illinois have not received Medicaid reimbursements since July 2011.
View the bill here.
Written by Alyssa Gerace
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Ziegler, a speciality investment bank, announced on Dec. 19 that it closed a $31,210,000 non-rated, fixed-rate bond issue for Peterborough Retirement Community at Upland Farm, Inc. (RiverMead).
Formed in 1991, RiverMead and the original continuing care retirement community campus opened in Dec. 1995 in central New Hampshire.
“Since opening in 1995, RiverMead has fulfilled its mission by providing quality housing and care to seniors in the Northern New England area,” said Keith Robertson, director in Ziegler’s Senior Living practice, in a statement. “Through the Board’s active involvement and foresight The Village expansion will allow RiverMead to position itself for the future by meeting unmet demand in the area while furthering its mission.”
The Series 2011 Bonds will be used to fund construction of The Village to house approximately 40 independent living units, which will consist of 30 apartments and 10 cottages, and approximately 20 assisted living beds as part of an expansion to RiverMeads existing facilities and services, including a library, conference space, pub, movie theater, and fitness center.
The bonds will also be used to fund the construction of a new underground parking lot and to reimburse the routine capital expenditures and miscellaneous construction, renovation, improvements, and equipping of RiverMead’s CCRC facilities. Additionally, the funds will be used to fund debt service reserve funds for the bonds and to fund capitalized interest with respect to the Series 2011 Bonds, and pay certain costs of issuing the bonds.
The Village will be constructed with the ability to potentially provide nursing care in the future.
Written by Alyssa Gerace
Senior Housing News will be taking a few days off for Christmas to relax and spend time with family.
Before we leave, we just wanted to say thank you for all your support and we can’t wait to show you what we have in store for 2012.
Merry Christmas and Happy Holidays!
Sincerely,
George, John, Elizabeth, and Alyssa
