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Category: Government Programs

Senior living providers must expand outside the bricks and mortar and create a full care continuum if they want to be successful, long-term, in a changing healthcare system that’s substantially shifting where care is provided. 

Entitlement reform is poised to have a huge impact on post-acute providers, including those in senior living, agreed Scott Gottlieb, MD, a resident fellow at the American Enterprise Institute, and Gov. Howard Dean, MD, former presidential candidate and DNC chairman, both panelists of the National Investment Center (NIC) for the Seniors Housing & Care Industry’s 2013 Annual Conference. 

Programs introduced in the Affordable Care Act are testing bundled payment and managed care systems as opposed to the current fee-for-service payment model.

“I think we need to get rid of fee-for-service medicine,” Dean said. “Every incentive in the medical system right now is when people are really sick. If you paid by the patient, the whole system would be about taking care of problems early.” 

That would directly affect the long-term care environment, panel moderator Dan Mendelson, founder and CEO of Avalere Health, LLC, pointed out, as its revenue stream comes from a fee-for-service model that the nation’s healthcare system is going down the path of abolishing. 

The biggest piece of advice Gottlieb had for post-acute care providers in light of entitlement reforms: offer a continuum of care.

“Have a suite of options,” he said.

“We have to understand that institutional care is going to be reduced,” Dean said. “We have to get into home care; we have to get into hospice care; we have to get into assisted living. We need some federal changes.”

Those changes, he said, need to occur in what care settings federal programs cover.

“We need some of the programs that will only pay for beds [in a hospital or nursing home] be willing to pay for other things,” said Dean.

Hospice is an “enormous” growth area that senior living providers should figure out how to harness, Dean and Gottlieb agreed. 

“I think hospice is going to grow very rapidly, not because it makes money—although it does—but because it is time to turn the dying process back to the families and the patient,” Dean said, calling the industry the “wild, wild west.” 

Between 2005 and 2011, Medicare spending on hospice care for residents in nursing homes skyrocketed 70%, according to a 2011 annual report from the Department of Health and Human Services, and the industry has drawn increased scrutiny as a federal fraud task force has cracked down on some hospice providers accused of defrauding Medicare. 

“It could get hurt in Washington, because of the perception it’s been gamed,” Gottlieb said. 

But despite a potential “rough patch,” Dean said, there’s plenty of room in private pay hospice. 

Dean also said he sees opportunities for companies in “high end care,” and he predicts some large companies will get into the retirement home business, even though its penetration rate is a “relatively limited portion of the population.”

Even though there’s a movement toward shifting patients downstream, institutional facilities will be far from obsolete as there will always be people who need them. Federal payment structures often force people into bricks and mortar options as Medicaid is less available for home care, he added. 

“The growth strategy has to be to expand services to encompass the full spectrum,” Dean said. “It’s not just going to be bricks and mortar; you have to offer a different range of services.”

The companies who get that balance right are going to be the ones who make “plenty of money,” he said, and the companies that don’t are going to be the ones who get absorbed into someone else.

Additional benefits of ancillary services can be found it the marketing proposition it contains, allowing providers to extend into the community and potentially “convert” home care patients as they transition into bricks and mortar.

“If you’re admitting someone at the lowest level—home care—you’ve got that patient in your system,” Dean said. 

Written by Alyssa Gerace

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Cambridge Subsidiary Closes $28 Million Loan Modification for Senior Housing Portfolio

Cambridge Investment and Finance Co., a subsidiary of Cambridge Realty Capital Companies, announced closing a $28 million conventional loan modification for four properties it owns and operates as SunRidge Senior Living in El Paso, Texas.

The firm purchased the portfolio 18 months ago from Emeritus Corporation (NYSE:ESC), and the properties have been managed since then by 12 Oaks Senior Living of Dallas. Combined occupancy at the SunRidge properties is up 24% since the purchase to 92%, according to Brent Holman-Gomez, senior vice president at Cambridge. 

A conventional loan from GE Capital refinanced the portfolio’s existing mortgage and mezzanine debt and provides funds for capital improvements and licensure expansion at each property. An additional 75 licensed beds are being added to the portfolio, along with continuing improvements to each community’s common areas. 

Additionally, a new certified memory care center has been added at SunRidge at Cielo Vista in El Paso. 

Cambridge acquisitions tend to be focused in secondary or tertiary markets, according to Holman-Gomez, usually in areas with a strong business environment and growth potential. Cambridge Investment and Finance Co. have acquired 16 properties since the subsidiary was formed in 2001. 

Oak Grove Capital Secures $11.14 Million Financing for Ore. Senior Community

Oak Grove Capital recently announced the origination of a $11.14 million Freddie Mac CME fixed-rate loan for Canfield Place, a senior housing community located in Beaverton, Ore. The 10-year loan, which carries a 30-year amortization period, was secured for Lytle Enterprises in order to refinance existing mortgage debt. 

The loan was originally to be engaged through the HUD Section 232/223 (a)(7) program in order to take advantage of historically low rates. However, during the course of the loan process, the borrower decided to invest more capital back into the project, says Oak Grove Capital, which then worked with Freddie Mac to secure the CME option providing for such objectives.

“Our ultimate goal is always to provide our borrower with the best financing option for their needs,” said Jeff Ringwald, senior vice president of seniors housing at Oak Grove Capital. “The original (a)(7) [program] no longer provided necessary funding for the planned improvements, so we adjusted course and provided them with a higher cash-out, fixed-rate loan.” 

Assisted Living Company Files for Bankruptcy

Jamieson Realty and three associated entities that formerly operated a nursing home filed for Chapter 7 bankruptcy on Sept. 13. 

The businesses—Jamieson Realty LLC, Lindenwood Care Corp., S&C Investment Group LLC, and Trinity Capital Associates LLC—were incorporated to operate Loving Care Home, reports the St. Louis Business Journal. In April 2006, the corporation obtained a $3.2 million loan from First Bank, court documents indicate, which matured in February 2010, at which point the lender demanded repayment. 

Following the assisted living company’s inability to pay back the loan, First Bank sought a receiver for the property and ultimately purchased the property at a foreclosure sale for $2.1 million. The companies still owe First Bank more than $1.4 million. However, the business journal reports that Jamieson Realty listed assets of $0 to $50,000 and liabilities of $1 million to $10 million in its bankruptcy filing.

Jamieson Care LLC now owns the property, which is now called Loving Care Assisted Living.  

Cambridge Closes $17.6 Million Loan for Chicago Nursing Home

Cambridge Realty Capital Companies recently closed a $17.6 million loan to refinance Bryn Mawr Care, a 174-bed intermediate care nursing home in Chicago.

The fully-amortized, 31.6-year term loan was arranged for the borrower, an Illinois limited liability company, using the HUD Section 232/223(a )(7) program and was underwritten by Cambridge Realty Capital Ltd. of Illinois, the Cambridge business that specializes in HUD financing. 

Hammond Hanlon Camp Completes Financing for N.Y. Medical Facility

Hammond Hanlon Camp LLC (H2C), through its wholly owned subsidiary H2C Securities Inc., served as the exclusive financial advisor to Ciminelli Real Estate Corporation for the financing of an innovative 300,000 square-foot medical outpatient facility currently under development in downtown Buffalo, N.Y. H2C is an independent investment banking and financial advisory firm with an exclusive focus on healthcare services companies and related organizations.

The $100 million medical office building will be in the heart of the growing Buffalo Niagara Medical Campus. Called Conventus—Latin for “coming together”—the new facility will be physically connected with nearly every existing and planned facility, creating a new model for healthcare outpatient facilities. The campus is home to Kaleida Health, the largest health system in the two-county Buffalo area. Other recently completed or planned developments include additions to the John R. Oishei Children’s Hospital and the new University of Buffalo Medical School. Conventus is an integral part of this campus expansion. Construction, which commenced with site work in April, is expected to be completed in the second quarter of 2015.

Through a carefully managed process, H2C obtained numerous highly competitive term sheets prior to the final selection of Seavest Healthcare Properties LLC to be Ciminelli’s partner.  Seavest’s investment rounded out the capital stack which included the developer’s equity and a construction loan with a regional bank.  Construction, which commenced with site work in April, is expected to be completed in the second quarter of 2015.

AdCare Subsidiary Enters $5 Million Loan Agreement with H&H Funding

QC Property Holdings, LLC, a subsidiary of AdCare Health Systems, Inc., entered a loan and security agreement with Housing & Healthcare Funding, LLC for a $5 million principal amount secured credit facility. 

The proceeds were used primarily to repay certain outstanding bonds assumed by AdCare in the July 2012 acquisition of a 118-bed skilled nursing facility in Oklahoma City, Quail Creek Nursing & Rehabilitation Center. 

The facility matures on September 27, 2016, with interest accruing on the principal balance at an annual rate of 4.75% plus the current one-month LIBOR rate, for a minimum interest rate of 5.75%. The credit facility is secured by a first mortgage on the nursing home property and a first-priority interest on all furnishings and equipment associated with the property, along with an assignment of all rents paid under any existing of future leases and rental agreements with respect to the Quail Creek Facility. 

USDA Approves $12 Million Loan for Senior Community Construction

Castle Peak Senior Care Community, a planned 64-bed skilled nursing and assisted living community to be located in Eagle Ranch, Colo., has secured a $12 million loan through the USDA Rural Development Community Facility loan program, reports VailDaily.com.

The project has taken a big step forward with approval for the loan, which bears a 3.5% interest rate and a 40-year term.

“The low interest rate and favorable term will go a long way in ensuring the success of the project,” said Craig Kittelson, chief financial officer of Augustana Care, a not-for-profit that’s partnering with Eagle County to develop the community. 

Augustana Care and the county will contribute a combined $5.4 million to the project comprised of subordinate debt. The planned community will cost an estimated $21.8 million to develop, according to VailDaily, leaving a $4.4 million funding gap. 

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Cambridge: We’re Ready for New Construction Lending

Cambridge is now encouraging new construction submissions for HUD Section 232 financing, says chairman Jeffrey Davis. 

“All of our recent market studies have indicated there is strong demand for new senior housing construction in many markets. This demand can no longer be ignored. It needs to be addressed,” he said. “Like other HUD lenders, Cambridge had shied away from new construction projects because of difficulties involved in underwriting and closing these deals. But our attitude has changed over the last six months.” 

Cambridge recently closed on two separate Section 232 construction loans totaling more than $40 million for the same owner and operator, Davis says, who was able to demonstrate strong marketplace demand for the properties. 

In addition to being an experienced owner, the borrower also had significant equity in other properties. A similar formula, says Davis, can work for other borrowers. 

“What we’re seeing in the marketplace today are baby boomer children responsible for the placement of their parents being attracted to newer, more contemporary properties with features and amenities they believe will appeal to their parents. However, this trend is somewhat at odds with what’s available in the market today,” he says. ”Particularly with skilled nursing facilities and to a lesser extent with assisted living properties, senior housing stock is becoming dated.” 

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Here’s a collection of news bites pertaining to the senior housing and long-term care industries, gathered from around the nation. Many of the articles are state-specific, but could eventually have national implications or influence senior care trends. Click the links to access the full article. 

From The New York Times: The New Old Age blog—CLASS Act Making a Comeback?

“Now that President Obama has won a second term, the Supreme Court has ruled the Affordable Care Act constitutional and the election has made Congressional attempts to repeal it unlikely, a few advocates for the elderly are quietly talking about resurrecting the Class Act, or some variant of it,” reports The New York Times: The New Old Age blog. “There’s a window of opportunity now,” said Connie Garner, director of the advocacy group Advance Class. “The stars are lined up to have a productive conversation.”  Interestingly, the actuary who lost his job, Robert Yee, agreed that the program could be successful. He had not completed the research when the ax fell, but “from an actuarial perspective, we can make this work,” he told me at the time.” Read more

From Politico: Nursing Home Provider Tax Faces Cuts, Limits Under Medicaid Budget Discussion

“Almost all the states use provider taxes to help fund their Medicaid programs, but the Obama administration says some are essentially using them to game the system — by taxing them, giving the money back and then claiming that money as state spending that the feds have to match,” reports Politico. “That plan would have ratcheted down the amount of Medicaid provider taxes that states are allowed to collect, producing $26.3 billion in federal savings. That’s much less of a sting than the $44 billion in savings recommended by the 2010 Simpson-Bowles deficit commission, which called for the eventual elimination of provider taxes.” Read more

From 10TV.com (Ohio)—Illegal Drugs Discovered in Nursing Home 

“Employees said they made a drug discovery on a vending machine inside the Heartland-Fairfield Nursing Center. Fairfield County sheriff’s investigators believe it’s LSD, a hallucinogenic drug popular in the 1960′s, rarely seen circulating in Central Ohio today,” reports 10TV.com. “Detectives said a cleaning crew discovered a sheet of the drug about the size of a business card, during a routine cleaning. They believe it had been there for two or three days. The nursing center turned it over to investigators, who are now working to determine who left it there and why.” Read more

From MyDesert.com (Calif.)—Senior Care Facility to Close After Operating Losses

“Desert Regional Medical Center is looking to close its skilled nursing facility in the first quarter after operating at a loss for at least a year,” reports MyDesert.com. “The 34-bed unit on the fourth floor of the Palm Springs hospital currently houses 15 patients and employs 30 full-time and four part-time employees, said Rich Ramhoff, a hospital spokesman. A definitive date for closure has not yet been set.” Read more

From the GAO—CMS Needs to Eliminate Duplication, Improve Efficiency of Medicaid Program

The Government Accountability Office recently released a study on the Medicaid Integrity Program, conducted because Medicaid has the second-highest estimated improper payments of any federal program reporting such data. The report assesses the efficiency and effectiveness of the Medicaid Integrity Group (MIG), created to oversee and support state program integrity activities. GAO found that CMS should take steps to eliminate duplication in the program to reduce inefficiency related to hiring separate review and audit contractors for MIG’s National Medicaid Audit Program, and made several recommendations to strength and improve the program. Read more

From the New York Times—Nursing Homes Told to Reinstate Workers

“A federal judge in Hartford has ordered a Connecticut nursing home chain to reinstate nearly 600 workers who have been on strike since July 3, and to rescind the pension and health care cuts it had imposed,” reports the N.Y. Times. ”Judge Robert N. Chatigny of the United States District Court in Connecticut ruled on Tuesday night that the nursing homes’ owner, HealthBridge Management, had broken the law by refusing to bargain in good faith and by imposing the cuts before a true negotiating impasse had been reached. Judge Chatigny issued an injunction that ordered HealthBridge to reinstate the workers by next Monday, even if it means ousting hundreds of the replacement workers hired to run the nursing homes after the strike began.” Read more

From Columbus Business First (Ohio)—Senior Care Providers Wary of Dual Eligible Shift

“Operators of Ohio’s nursing homes and assisted-living centers have 10 months to change their financial model after the state got approval for a pilot program to improve the health and reduce the medical costs for a fragile population disabled enough and poor enough to qualify for both government insurance programs. The government hopes to save $243 million over the program’s three years,” reports Columbus Business First. ”The businesses providing that care hope it’s a true reduction in duplication and unneeded services, rather than a hit to their already slim bottom lines. “In a year, all of our payments are going to shift from the government to private health plans,” said Tom Slemmer, CEO of National Church Residences, the nation’s largest nonprofit developer of affordable senior housing and a LeadingAge member.” Read more

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Technology to facilitate aging in place—whether in the home or in a senior living community setting—continues to make strides, evidenced in this round-up that features a mobile app for caregivers to coordinate care, a new fall-prevention and PERS platform, and a home safety telephone system marketed as an affordable PERS alternative. Also in the news is a federal report faulting Medicare for being vulnerable to fraud and abuse in its shift to implementing electronic medical records, while two health information exchanges seek to prove their benefits ahead of federal funding running out. Read on:

1. Philips: Mobile App Allows Caregivers to Coordinate Care

Royal Philips Electronics (NYSE:PHG) recently released CarePartners Mobile, a new mobile app designed to help family caregivers coordinate care for their loved ones. 

“CarePartners Mobile allows people to spend more time caregiving, and less time trying to determine what needs to be done and who is doing it,” said Mark Sabalauskas, senior product manager, Philips Lifeline. “The app also taps in to the growing trend of using mobile technology to communicate, organize our lives and improve our health. As this trend continues to grow, Philips is leading the way, providing services where and how they are most effectively delivered.”

The free app, which is available for iPhone and Android, streamlines care coordination, and enables caregivers to create, manage, and view upcoming caregiving tasks using a shared to-do list, assign tasks to individuals and see what tasks still need volunteers, and syncs tasks they’re responsible for directly to smartphone calendars, among other functions. 

2. SearchHealthIT: Health Information Exchange Benefits Paper-Bound Nursing Homes

“Two health information exchanges—The Great Lakes HIE in Michigan and the Keystone HIE in Pennsylvania—are throwing technology at a major meaningful use policy paradox that affects vulnerable, elderly patients at the worst possible times. By doing so, they could be demonstrating the type of health information exchange benefits that privately and publicly funded HIEs have been seeking in order to prove their economic viability as federal grants are due to expire,” writes SearchHealthIT. “Nursing homes were left out of federal EHR incentives, but they’re the parties who typically hold their patients’ up-to-date advance directives. When these patients—some of them incapable of making their own health care decisions—get ambulanced to hospitals or go to doctors’ offices for treatments, their caregivers are required to collect advance directives from 50% of patients, per the stage 2 meaningful use criteria.” Read more

3. New York Times: Medicare Faulted on Shift to Electronic Records

“The conversion to electronic medical records—a critical piece of the Obama administration’s plan for health care reform—is “vulnerable” to fraud and abuse because of the failure of Medicare officials to develop appropriate safeguards, according to a sharply critical report to be issued Thursday by federal investigators,” reports The New York Times. “…the report says Medicare, which is charged with managing the incentive program that encourages the adoption of electronic records, has failed to put in place adequate safeguards to ensure that information being provided by hospitals and doctors about their electronic records systems is accurate.” Read more

4. Care Technology Systems: New Fall-Prevention Platform

Care Technology Systems, Inc.’s newest product offering is an Active-PERS device that has been added to its Fall Detection by Logic System. 

The new pendant can help caregivers respond to falls in a timelier fashion, even if the senior fails or is unable to press the pendant’s alert button. Here’s how it works: 

“While standard PERS requires the user to push a button to notify caregivers of a fall, we know that in 83% of the times a senior who uses PERS isn’t wearing their pendant, and can’t alert others when they’ve fallen,” said Jim Anderson, founder and president of Care Technology Systems. “So, we’ve integrated an accelerometer that actively monitors senior activity as a part of a larger alert system and can tell us whether a fall has occurred and automatically summon help.”

The system also can receive activity information from the device on a regular basis, called Motion Scoring, that can track patterns to help predict falls and thus prevent them. This could result in significant healthcare cost savings, Care Technology Systems believes, especially as hospitalization costs for falls average around $17,500, according to recent statistics. 

5. VTech: CareLine Phone System for Independent Senior Living

VTech Communications, a subsidiary of VTech Holdings Ltd. (HKSE:303), recently introduced the CareLine home safety telephone system meant for seniors still living at home. The system’s features are designed to meet seniors’ daily communication needs and include large displays, reminder capabilities, volume boost, and a wearable pendant with one-button dialing that directly calls people that seniors communicate with most. VTech is marketing the system as an affordable alternative to a PERS (personal emergency response system). 

The pendant allows users to make and receive calls, listen to voicemail messages, review missed calls, confirm the date and time or receive programmed reminders for medication, appointments, or other events. The user or a family member can set reminders directly through the corded phone base or with a phone call; when it’s the set time, the system will remind the user with a light and audio cue. The pendant can also be used to get immediate emergency assistance. Users can press one of two speed-dial keys or use a voice command to call self-programmed contacts such as 911, a family member, or trusted friend or neighbor. 

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Here’s a collection of news bites pertaining to the senior housing and long-term care industries, gathered from around the nation. Many of the articles are state-specific, but could eventually have national implications or influence senior care trends. Click the links to access the full article. 

From Becker’s Hospital Review—Health Care Reform’s Impact on Senior Care Providers

“Impending reimbursement cuts will threaten profitability as most of the revenues from skilled nursing and assisted living facilities are from Medicare and Medicaid. To reduce costs, the new law also encourages patients to receive home care services, which are less expensive than receiving skilled nursing or assisted living care. To remain profitable, facilities may have to raise prices for private pay patients to offset the losses from government reimbursements,” reports Becker’s Hospital Review.

“General recommendations for skilled nursing and assisted living facilities to prepare themselves financially for healthcare reform include changing a facility’s business model to diversify revenue streams, bundling services and contracting with larger providers. However, to succeed at accountable care, facilities will need to successfully manage high acuity care at a lower cost and reduce hospitalizations.” Read more… 

From Kaiser Health News (Calif.)—Will Managed Care Experiment Actually Save Money, Improve Quality?

“The California experiment, now in its second year, has national significance. Federal officials have begun to roll out a similar, but larger effort required by the Affordable Care Act. That program will move up to 2 million of the nation’s sickest and most expensive patients into managed care. Twenty-five states have applied to be part of the managed care experiment for so-called “dual-eligibles,” people  who qualify for both Medicare and Medicaid. All dual-eligibles are poor, two-thirds of them are over 65, and many of them suffer from multiple chronic illnesses like diabetes and heart disease,” reports Kaiser Health News. “Those are sound principles, but the size of the experiment worries many. “They are too big to fail,” says Robert Berenson, a former vice chairman of the Medicare Payment Advisory Board.” Read more

From Vindy.com—Deep Funding Cuts Strain Ohio Nursing Homes

“House Bill 153 was implemented in July 2011, the beginning of the state fiscal year. It rebalanced funding for long-term care by cutting Medicaid rates paid to nursing homes by about 6 percent. It was one of the largest budget cuts in recent years,” reports Vindy.com. ”Then in October 2011, Medicare cut funding by an average of 11 percent nationally, claiming it had underestimated the cost of changes made in skilled nursing facilities the year before. Some Ohio facilities faced cuts of up to 12 percent. These two major cuts within six months proved challenging for many facilities, said Peter Van Runkle, executive director for the Ohio Health Care Association, which represents 750 long-term and special care facilities in Ohio.” Read more

From The Washington Post—AARP Doesn’t Want Medicare Changes Because AARP Would Lose Money

“AARP, the highly influential lobby for older Americans, is fiercely opposing any Medicare or Social Security cuts and emphasizes that it is fighting for the good of its members. But the proposals for changing Medicare also could affect AARP’s bottom line,” reports The Washington Post. ”AARP has long played a dual role. It advocates for the interests of seniors, and it makes money allowing its name to be used in selling them private insurance, including coverage known as ­Medigap, which supplements government-provided Medicare. The group gets a 4.95 percent royalty each time someone buys Medigap insurance with the AARP brand.” Read more

From Vindy.com—Ohio May Introduce Legislation for Ability to Fine ALFs

“[A]ssisted-living facilities, which are mostly privately funded, don’t face the same penalties [as federally-certified nursing homes receiving Medicare funding]. “There’s really not any kind of strong enough repercussions, particularly in assisted living facilities,” said state Sen. Capri Cafaro of Liberty, D-32nd. “You either get a slap on the wrist or shut down completely.” Cafaro hopes to introduce legislation in the next session of the Ohio General Assembly that would allow the Department of Health to fine assisted-living facilities,” reports Vindy.com. “[Regional director of the state Department of Aging's Long-term Care Ombudsman Program John] Saulitis is working with Cafaro and the Ohio Department of Aging on research for a law that would allow the Department of Health to fine assisted- living facilities.” Read more

From Bloomberg—Raising Medicare Age Could Save U.S. More Than $100 Billion

“A Republican proposal to raise the eligibility age for Medicare may save the federal government more than $100 billion while increasing health-care costs to senior citizens, states and employers. People age 65 and older could pay an extra $2,000 for health insurance if they’re excluded from Medicare, the federal health-care program for the elderly, according to the nonpartisan Kaiser Family Foundation,” reports Bloomberg. ”Other government and private health plans would see costs rise as would-be Medicare recipients seek care elsewhere. Savings to the government would accumulate slowly as Medicare began paying benefits to fewer people. The Treasury would collect more in Medicare payroll taxes because many seniors previously eligible for the program would keep working instead, to retain their health insurance. By 2035, the change would reduce projected Medicare spending by 5 percent, according to the CBO.” Read more

From Medical News Today—Aging Brains More Vulnerable to Fraud

“Why are older people especially vulnerable to becoming victims of fraud? A new UCLA study indicates that an important clue may lie in a particular region of the brain that influences the ability to discern who is honest and who is trying to deceive us,” writes Medical News Today. “Older people, more than younger adults, may fail to interpret an untrustworthy face as potentially dishonest, the study shows. The reason for this, the UCLA life scientists found, seems to be that a brain region called the anterior insula, which is linked to disgust and is important for discerning untrustworthy faces, is less active in older adults.” Read more

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Construction: Planned

Senior Star to Expand Mo. Retirement Community

Senior Star is breaking ground on an addition to its Kansas City, Mo.-located Wexford Place to add new living units and expand available services.

The project includes the addition of 67 apartment homes as well as adding Alzheimer’s and dementia services with 24 memory care apartments. 

Purdum Construction, based in Overland Park, has been hired for pre-development and construction management services for the project, with Interior Design Associates, Inc., Schlagel and Associates, CFS Engineers, and Beery Rio Architects providing design services. 

The new addition to the campus, which already provides independent living, is scheduled to open a year from now. 

Development Fund to Buy Vacant Hospital for $2 Million, Plans Senior Housing Conversion

Hudson Valley Housing Development Fund, Inc. is planning to buy the former Highland Hospital/St. Francis Hospital in Beacon, N.Y. for $2 million, with plans to convert the vacant structure into senior living apartments, reports MidHudson News.

The city must first go through an approval process to acquire the former hospital, located in Wappinger Falls, N.Y., but already has the backing of the mayor. 

The Development Fund is planning to transform the building into a 68-unit senior apartment complex. Construction on renovations and upgrades are expected to take place in 2013, with an anticipated 2014 opening. 

Bernardon Haber Holloway Designs Senior Cottages for Community Expansion

Kennett Square, Pa.-based design firm Bernardon Haber Holloway Architects recently designed new cottages for the Kendal at Longwood Retirement Community expansion.

The cottages will have a variety of aging-in-place features, including windows that are easy to open, extra-wide garages so car doors can be fully opened, and walkways with gentle slopes. Other details include lever door handles rather than knobs; bathrooms wide enough to maneuver with wheelchairs or walkers; and blocking in the bathroom walks to enable the easy installation of grab bars. 

Other design features include sustainability measures such as drought-tolerant landscaping; geothermal heating and air conditioning systems; and a system to percolate stormwater back into the ground to recharge the aquifer. The 48 cottages are registered with the U.S. Green Building Council with goals of Gold and Silver certifications under the Council’s LEED program. 

Construction: In the Process

SCC Healthcare Group Breaks Ground on $10 Million Tex. Senior Care Facility

SCC Healthcare Group recently broke ground on a $10 million senior care facility in Odessa, Tex. 

The Madison Medical Resort will be a 43,000-square-foot care center offering post-hospital recovery, skilled nursing, and long-term care. 

It will feature hotel-style recovery suites, large, flat-screen televisions, and “resort-like” amenities. Various levels of physical, occupational, speech, ultrasound, electronic stimulation, wound, and IV therapy will be provided by rehabilitation professionals. Admission to The Madison will be initiated by a physician, hospital social worker, or discharge planner. 

SCC Healthcare Group will own and operate the development, which has a scheduled Summer 2013 opening.

Gary Holding Group Developing Ga. Senior Living Community

Gary Holding Group recently broke ground on a senior living community in Noble, Ga., reports the local Patch.com, expected to open in the fall of 2013. 

Noble Village will be an independent living community featuring 19 cottages intended for people aged 55 and older. There will also be services provided for assisted living or memory care residents. 

The development will feature amenities including a pet park, zero-entry heated pool, laundry service, post office, dining room, chapel, and several other dining areas.  

The Douglas Company Begins Renovations on Ohio Senior Community

The Douglas Company, a general contractor based in Toledo, Ohio, recently began extensive renovations on Bellefontaine Manor, an affordable senior housing community in Bellefontaine, Ohio. 

The $2.48 million renovation will take place in five resident buildings and one community center. A total of 40 units will get a “face-lift” consisting of upgraded appliances, barrier-free baths and kitchens, and efficient windows and exterior doors. 

Bellefontaine Manor is owned by Buckeye Community Twenty-Five, L.P. The renovation is expected to be completed by Feb. 2013.

Construction: Completed

Two Aviv REIT Assisted Living Communities Open in Connecticut

Aviv REIT, Inc. recently announced the opening of two new assisted living communities in Darien and Norwalk, Conn. The properties, which cost about $32 million to develop, are both triple-net leased to and operated by Maplewood Senior Living, who has an existing tenant relationship with the REIT. 

The Darien property has 66 units, and the Norwalk property has 84 units. Maplewood entered an initial lease term of 10 years with Aviv for both properties. 

$12 Million Affordable Senior Housing Community Opens in Ohio

The local Metropolitan Housing Authority recently opened a $12 million affordable senior housing community in Cincinnati, Ohio.

The Reserve on South Martin offers 60 one- and two-bedroom apartments to those aged 55 and older with certain income levels. Residents won’t begin moving in until January, but the building is already nearly 100% leased, according to a spokesperson from the CMHA.

Property amenities include a walking trail, indoor community space, and washer/dryer hook-ups in each apartment.

Northland Development Corp. served as general contractor, with Berardi Partners providing architectural services. The project received funding from the Department of Housing and Urban Development Neighborhood Stabilization program. 

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Here’s a collection of news bites pertaining to the senior housing and long-term care industries, gathered from around the nation. Many of the articles are state-specific, but could eventually have national implications or influence senior care trends. Click the links to read the full article. 

From Kaiser Health News—Are ACOs Doomed to Fail?

Accountable care organizations are widely touted as one of the most effective cost-containing measures of the 2010 federal health law. Yet they have a great deal in common with the integrated delivery networks of the 1990s, leaving some wondering whether the bold experiment might come to the same disappointing end,” reports Kaiser Health News. “I don’t think these things are going to work,” says Lawton R. Burns, who wrote a Health Affairs commentary on the topic along with his colleague Mark V. Pauly of the University of Pennsylvania’s Wharton School. “ACOs in the end are going to end up costing more money and not necessarily deliver on the quality either.” Read more

From the New York Times—Nursing Home Faulted for Care Quality During Superstorm

“Amid the worst hurricane to hit New York City in nearly 80 years, the home, the Promenade Rehabilitation and Health Care Center, failed to provide the most basic care to its patients, according to interviews with five employees, federal, city and hospital officials, and shelter directors. Although nursing home officials say they cannot be blamed for what happened, the State Health Department has opened an investigation into Promenade’s actions,” reports The New York Times. ”Cold, thirst, fear: The situation grew so dire that the next evening, as the vestiges of the storm blew across the peninsula, ambulances arrived, evacuated the nearly 200 patients over several hours and deposited them in emergency shelters in the city. In most cases, no Promenade staff member accompanied the patients, and many patients traveled without their medical records. Both are violations of state regulations. Interviews with employees indicate that Promenade failed to carry out basic responsibilities, including adding staff for the storm as required by the state, stocking enough medicine and flashlights, and preparing patients’ records in case of evacuation.” Read more

From TribLive—Western Pa. Senior Care Providers Shift Focus of Service

“The largest nonprofit provider of senior-living services in Western Pennsylvania plans to focus more on short-term nursing care and services in home- and community-based settings, and less on long-term, institutionalized care for residents after experiencing several years of deficits among some of its entities, an official said. “I think it’s really looking at how we can maximize the quality of quality of life and provide quality care in the most cost-effective manner,” said Paul Winkler, president and chief executive officer of Presbyterian SeniorCare in Oakmont,” reports TribLive. “Presbyterian is one of many providers of senior services statewide that are being challenged by more low-income seniors qualifying for government-funded Medicaid coverage, which is insufficient to cover the cost for nursing care, and an increase in the need for free personal care, experts said.” Read more

Assisted Living Today’s List of Top 20 College Courses for Geriatrics & Senior Care

“Demand for senior care professionals is already strong, and as baby boomers grow older, the need for qualified caregivers, policy makers, researchers and providers of elder care services will only grow. Opportunities for new and returning students to study gerontology are abounding,” says Assisted Living Today. View the list.

From the AFL-CIO Blog: Fair Labor Wage Case Goes to Supreme Court 

“The AFL-CIO has filed a friend of the court brief in a case before the U.S. Supreme Court in which an employer is attempting to avoid paying its workers back wages. The case centers on a Pennsylvania nurse, Laura Symczyk, Genesis Healthcare Corp. and methods employers are using to get around paying wages due under the Fair Labor Standards Act (FLSA),” writes the AFL-CIO blog. “In December 2009, Symczyk filed suit in federal court alleging Genesis had failed to pay her and other employees for time actually worked during what were supposed to be scheduled meal breaks, payment that is required by the FLSA. She filed suit on behalf of herself and “similarly situated” workers. But unlike class-action suits for other employment claims in which workers who are part of the “class” are automatically included unless they opt out, FLSA suits require workers to opt in if they wish to be part of the action. Employers, says AFL-CIO Associate General Counsel Matt Ginsburg, are using the opt-in requirement to seek to limit their liability.” Read more

From the Columbia Daily Tribune (Mo.)—MU Gets $14.8 Million HHS Grant for Nursing Home Care

“The University of Missouri Sinclair School of Nursing announced this morning that it had received a nearly $15 million grant for a nursing home project,” reports the Columbia Daily Tribune. “The project will aim to reduce avoidable hospitalizations for nursing home residents, improve patient care and lower health care costs. The grant from the U.S. Department of Health and Human Services’ Centers for Medicare and Medicaid Services will help provide funding to put advanced practice registered nurses in 16 nursing facilities in the St. Louis area and will be distributed over four years.” Read more

From Vindy.com (Ohio)—Medicaid Cuts Force Nursing Home to Displace 14 Residents

“Fourteen residents will have to find a new place to live by next Friday because Valley Renaissance Healthcare Center, a nursing facility on South Avenue, is planning to end its respiratory-care program,” reports Vindy.com. ”The move is part of a growing trend in which nursing homes eliminate services for high-risk patients who require high-cost treatment, especially in light of cuts in Medicaid and Medicare reimbursements. Over the past year, Medicaid reimbursements for Ohio’s 958 nursing homes have been cut by 5.8 percent, which is expected to save taxpayers $360 million over two years… [C]uts at Valley Renaissance resulted in a 6.66 percent decrease in per diem Medicaid funding. So, while the facility received $160 per patient per day in 2011, it gets only $152 per patient per day in 2012.” Read more

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Ziegler Closes $51.6 Million Financing for Pa. CCRC Group

Ziegler recently closed a $51,640,000 tax-exempt, fixed-rate Series 2012 Bond issue for Asbury Pennsylvania Obligated Group issued through the Cumberland County Municipal Authority. 

Asbury Pennsylvania Obligated Group consists of Bethany Village and Springhill, two CARF/CCAC accredited CCRCs located in Pennsylvania. Both communities are operating segments of Asbury Atlantic, a not-for-profit, tax-exempt non-stock corporation organized under the laws of Maryland.

Asbury Communities, Inc., a Maryland not-for-profit 501(c)(3) is the sole corporate member of Asbury Atlantic and is #15 on the LeadingAge Ziegler 100 listing of the top 100 multi-site providers across the nation. 

The proceeds of the Series 2012 Bonds will be used to refund certain tax-exempt bonds of the Authority previously issued on behalf of the corporation; fund a deposit to the Combined Debt Service Reserve Fund; and pay a portion of the costs of issuing the bonds. The refinancing allowed Asbury to refinance their existing bank debt and eliminate bank renewal risk all together from their capital structure for the PA obligated Group, says Ziegler. 

Love Funding Refinances $10.4 Million of Loans for 2 Michigan ALFs

Love Funding recently announced the refinancing of two loans totaling $10.4 million for assisted living properties in western Michigan.

Bruce Gerhart and Robert Smallwood out of Love Funding’s Cleveland office secured the loans through the Department of Housing and Urban Development’s Section 232/223(a)(7) LEAN loan program.

The two properties benefiting from the refinancing are Railside Assisted Living in Byron Center and Sheldon Meadows Living Center in Hudsonville. Reenders Inc. has principal ownership in both properties and was able to save more than $513,000 in annual debt service costs.

Oak Grove Capital Originates $3.9 Million Loan for Minn. Senior Residence

Oak Grove Capital recently originated a $3,869,000 loan through the Department of Housing and Urban Development’s Section 232/223(a)(7) program to refinance Cornelia House, a senior housing community in St. Paul, Minn. 

Ziegler Closes $50 Million Financing for Masonic Homes of Kentucky

Ziegler recently announced the closing of a $49.65 million tax-exempt, fixed-rate Series 2012 Bond issue for Masonic Homes of Kentucky, a not-for-profit corporation which owns and operates three senior living campuses in Louisville, Shelbyville, and Taylor Mill, Ky. The Louisville and Shelbyville campuses are in the obligated group and encompass 400 personal care, assisted living, and skilled nursing units. 

Ziegler served as the sole manager of the non-rated Series 2012 Bonds, with proceeds of the sale used to currently refund the outstanding Series 2009 Bonds, Series 2010 Bonds, as well as other corporate debt; fund small projects on the two campuses; fund a debt service reserve fund; and pay for certain costs of issuance. The refunding also allowed MHKY to create an Obligated Group with a select portion of its operations as well as to release over $15 million of cash and investments that were used as collateral for its prior bonds. 

NCR Gets $10.5 Million in HUD Service Coordination Grants

National Church Residences was able to get 46 social service coordination grants for a total of $10.5 million from the Department of Housing and Urban Development (HUD), the not-for-profit organization announced recently. 

Three of those grants are specifically for maintaining service coordinators in three of NCR’s affordable senior housing communities, while the remaining 43 grants were submitted to HUD by NCR on behalf of third-party owners, whose service coordination programs are assisted by the nonprofit.

“HUD’s support of our service coordination program will allow National Church Residences to substantially increase our level of service to scores of low-income senior housing residents across the country,” said Terry Allton, vice president of Home and Community Services. “Service coordination is a proven, effective method of fostering independence and allowing seniors to more successfully age-in-place in their own homes.”

AdCare Prices $10.4 Million Stock Offering

AdCare Health Systems, Inc. (NYSE MKT:ADK) has priced an underwritten public offering of its 10.875% Series A Cumulative Redeemable Preferred Stock at a public offering price of $23 per share. AdCare expects to get approximately $10.35 million in gross proceeds and intends to use the net proceeds for working capital and other general corporate purposes, including the repayment of certain indebtedness. 

The closing of the offering is scheduled for Nov. 14, 2012. MLV & Co. LLC is acting as sole book-running manager for the offering, with GVC Capital LLC, Ladenburg Thalmann & Co. Inc. and C.K. Cooper & Company as co-managers. 

MassDevelopment Issues $30 Million Bond to Ventas Subsidiary

MassDevelopment, Massachusetts’ finance and development agency, recently issued a $30 million bond on behalf of Ventas subsidiary Woodbriar Senior Living LLC.

Woodbriar will use the proceeds to build a 125-unit assisted living community in Falmouth, Mass. Plans for the development include donating nearly 15 aces of land to a local conservation group, reports Boston.com, in order to create the first handicap-accessible park and walking trail in Falmouth. Additionally, 25 units of the community will be designated for households earning no more than 50% of the area median income.

ASL Development Co. LLC, a subsidiary of Atria Senior Living Inc., will develop the project. 

Ziegler Closes $98.5 Million Financing for Lutheran Home

Ziegler recently closed a $98.5 million tax-exempt, fixed-rate Series 2012 Bond issue for the Lutheran Home and Services Obligated Group in Arlington Heights, Ill., to be issued through the Illinois Finance Authority. 

Proceeds of the Series 2012 Bonds will be used to fund a major repositioning of the Lutheran Home campus to modernize the community’s interior and exterior. The ultimate unit mix will be roughly the same as its current composition of 392 skilled nursing beds and 100 assisted living units, but many units and common areas will undergo substantial upgrades, including adding private baths to each unit.

Additionally, the majority of the mechanical, plumbing, and electrical systems will be replaced, and parking will be increased by about 35%. The campus will add a new “West Wing” with 78 private rooms with private baths.

Lutheran Homes plans to complete the project in phases so as to cause minimal disruption to occupancy and operations during construction. The financing’s primary goal is to improve the physical plant and amenities to ensure the longevity of the community.

About 72% of the proceeds will be used for this construction project, will the balance will be used to refund certain outstanding debts such as $23.34 million of outstanding Variable Rate Demand Bonds and a $2.5 million line of credit. Following the financing, Lutheran Home will only have fixed-rate debt.

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Unnecessary rehospitalizations cost Medicare millions of dollars each year, and with many seniors cycling from hospitals to skilled nursing facilities and back again, it’s paramount for nursing homes to figure out how to reduce readmissions.

As many as 60% of these rehospitalizations are preventable, writes Forbes, and they cost taxpayers millions of dollars each year. Health care reform has put a large focus on hospitals cutting their readmission numbers—starting in October, their Medicare reimbursements will reflect their performance—and it’s in nursing homes’ best interests to figure out how they can help. 

…[N]ursing facilities and their partner hospitals are taking steps to cut these readmissions. In researching a new article for the journal Health Progress, published by the Catholic Health Assn., I had the chance to visit and talk to some of the nation’s most creative senior service providers. And I learned about both the challenge of reducing hospital readmissions and some cutting-edge solutions.

Some of these initiatives are being driven by new Medicare rules. Among them: On Oct 1, Medicare will begin cutting payments to hospitals where too many patients are readmitted within 30 days of discharge. While the initial penalties are relatively modest and for only three conditions—heart failure, pneumonia, and heart attacks—they will gradually stiffen. And the new rules seem to have changed the mindset of many hospital administrators.

Increasingly, hospitals are improving discharges and keeping a close eye on patients after they leave. No longer do they abandon their patients once they roll out the front door. Many are putting transition programs in place—often using care managers, social workers, or nurses—to assist patients who are discharged to home. And slowly, they are beginning to work more closely with nursing facilities—both skilled nursing and long-stay nursing homes—to reduce readmissions.

At the same time, the best nursing facilities are making big changes of their own. They include:

  • Increasing staff and improving training for nurses and aides to help them identify and treat situations that can lead to hospitalizations. At Wheaton-Franciscan Healthcare in Wisconsin, nursing facility aides are trained to identify warning signs in heart failure patients and how to communicate what they see to staff nurses. These steps often prevent a crisis before it occurs.
  • Working with primary care doctors to encourage them to allow the nursing facility to treat many acute episodes rather than ordering patients back to the hospital.
  • Asking patients, residents, and their families whether they want to be hospitalized. When Hebrew Senior Life asked patients at its post-acute care nursing facility in Boston what they wanted, it discovered many preferred to stay where they were. Now, the HSL system is expanding this program to residents of its long-stay nursing home.

Nursing home trade group the American Health Care Association has challenged its members to reduce rehospitalizations 15% by 2015, and the Centers for Medicare and Medicaid Services has its own initiative to reduce avoidable hospitalizations from nursing facilities by funding organizations that partner with nursing homes to enhance on-site services and supports to residents and ensure a healthy, safe transition from the hospital. 

Read the full article at Forbes

Written by Alyssa Gerace

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Assisted living providers in Wisconsin can be thankful for a redesigned regulatory approach that has transformed the state’s system for monitoring providers to focus more heavily on those with bad track records instead of imposing an extensive survey on every community, even those who don’t have any serious deficiencies.

It happens in lots of industries—a small percentage of businesses or organizations may misbehave in some way, and as a result the entire industry gets stuck with rules and regulations seeking to prevent that bad behavior from reoccurring. The assisted living industry—at least in some states, as it’s not regulated on a federal basis—is not exempt from this trend.

By most accounts, states are looking at constricted budgets with no indicators of significant improvement in the future. Rather than expending limited resources on unnecessary actions, Wisconsin is focusing on the important: “problem” assisted living communities that aren’t providing the best care to their residents.

A lot of regulatory agencies don’t have enough resources to properly do their jobs, and their budgets are only going to get more strained, agree Jim Murphy, executive director of the Wisconsin Assisted Living Association, and Kevin Coughlin, who up until recently was the Director of the Bureau of Assisted Living in Wisconsin.

“The good thing with the federal part of the regulations is that it also comes with resources,” says Kevin. “That’s a struggle with states. They’re up against these resource challenges.”

He said they’re seeing a number of states looking at the abbreviated survey process that’s been successful so far in Wisconsin, and are focusing their resources on the ones that are actually causing most of the problems. 

“We got forced into re-looking into our systems,” says Coughlin. “Assisted living was exploding in growth, and we weren’t able to keep up with it with our resources.”

He said the rapid growth gave the bureau and opportunity to take another look at how it was handling the industry, and if there was a better way of designing the regulatory program to meet the needs of an “exploding new industry.”

In 2002 and 2003, it restructured the agency, including a critical component: establishing an assisted living forum that got together every month and brought assisted living providers, associations, advocates, and stakeholders in general in one room to address emerging issues throughout the redesign process.

Then, the bureau redesigned the survey process to make it more effective, and introduced an abbreviated system for assisted living communities that have a good compliance history. 

“It gave good recognition to those communities that were striving to do good work,” Coughlin says. “Basically, our approach was, if it looks good, smells good, tastes good, feels good… we’re going to assume it is good.”

Communities qualifying for the abbreviated surveys began to see it as a quality badge, he says, and the redesign process ultimately led to “some really good collaboration” with the associations, especially WALA. 

However, “the state and the [assisted living] providers are not partners,” Murphy emphasized. “We’re collaborators. We have the same goal of quality care for assisted living residents.”

He said that a former WALA executive has used the phrase “creative tension” to describe the relationship between the industry and the state. “We need strong regulations,” he says, adding that in his state, they’re “really” strong.

“Because of that, some issues happening in other states [such as Florida] aren’t happening here,” Murphy says. “[The BAL] has taken a look at the limited resources they have, and have focused on those that aren’t compliant.”

About 87% of assisted living communities in Wisconsin don’t have any serious deficiencies, he continues, so the bureau turns its attention to the approximately 13% that do. 

Regarding Florida, Coughlin says the state has reached out to his state’s Bureau of Assisted Living regarding Wisconsin’s regulatory practices. “They’re incorporating some of the different regulatory initiatives we’ve done into their proposals as they go forward [from the Miami Herald series on the lax regulatory standards for Florida's assisted living industry].”

Statistics are showing time and time again, he continues, that the best—even though they’re not experiencing as much regulatory intensity—continue to be good. 

Providers that belong to the Assisted Living Federation of America and its state chapters are encouraged to look for how they can collaborate with their state regulatory agencies, says Murphy, to make sure they’re paying attention to the industry, and particular attention to the communities that aren’t providing quality care.

“Those are a time bomb waiting to go off, in some states that don’t have these quality care surveys,” Murphy says. “You need to squash the providers that don’t provide quality care.”

Written by Alyssa Gerace 

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Medicare is planning on eventually introducing a payment system for skilled nursing facilities that’s based on the quality of care being given rather than on costs and resources, but first it needs to figure out a system for doing so by analyzing results from its three-year “Nursing Home Value-Based Purchasing Demonstration” project, which ended on July 1. 

The national incentive pay program for nursing homes to provide superior quality in order to receive better payments is an initiative of the Affordable Care Act, but it will be several years in coming, according to a Department of Health and Human Services report to Congress on the demonstration project. 

More than 180 nursing homes across Arizona, New York, and Wisconsin took part in the demonstration project, which gathered data on nursing staffing, potentially avoidable hospitalizations, clinical measures, and information about deficiencies from state survey inspections. The information is currently being reviewed and analyzed—a process that could take more than a year—but initial results are mixed, according to researchers. 

During the pilot program, participating facilities were given incentives based on two criteria: whether they improved performance, and whether they appeared in the top 20% of nursing homes, based on a composite score. Those ranking in the top 10% got a higher Medicare payment.

However, the facilities showed varying levels of performance, with Wisconsin nursing homes achieving substantial savings, which could lead to significant incentive payments, while savings at Arizona facilities were more modest, and New York nursing homes didn’t see any savings. 

“The results are somewhat disconcerting,” David Grabowski, a professor of health policy at Harvard Medical School and lead investigator responsible for evaluating the demonstration project, is quoted as saying in a Kaiser Health News article on the report. “There does appear to be some opportunity for cost savings, but we don’t have a good sense yet as to whether this (demonstration project) will actually improve the quality of care.”

However, health policy experts remain optimistic that the current system can be transformed into a “higher performing, value-driven” healthcare system. 

“Harnessing the significant and growing purchasing power of Medicare in this [skilled nursing] sector can provide incentives for providers to improve the quality of care for their patients,” wrote HHS. “MedPAC stated that linking payments to beneficiary outcomes could help improve SNF quality and redistribute payments from low-quality to high-quality providers.”

The Centers for Medicare and Medicaid Services (CMS) views the implementation of this sort of quality-based payment program as an important step in revamping how Medicare pays for healthcare services, says HHS, aiming to hold providers accountable for the quality of care they provide to Medicare beneficiaries, promote more effective, efficient and high quality care processes, and address the variation in quality across care settings. 

The plan for this program will link payment to performance to “improve value for Medicare beneficiaries and other residents residing in SNFs by promoting the development and use of robust quality measures to allow patients and providers to assess the quality of skilled and non-skilled care furnished in SNFs,” says the report. “[T]he emphasis on Medicare beneficiares’ functional status can help prepare them for discharge to a less intensive non-institutional setting.” 

Access the report to Congress

Written by Alyssa Gerace

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Long-term care pharmaceutical provider Omnicare (NYSE:OCR) has agreed to settle a whistleblower lawsuit alleging it had paid a kickback when acquiring a pharmacy company and submitted false reimbursement claims to government health insurers, but has denied wrongdoing in court papers, reports Bloomberg Businesweek

The Covington, Ky.-based nursing home drugs supplier acquired Total Pharmacy Services LLC in 2004 for $25 million. Whistleblower Maureen Nehls’ lawyer said in the 2007 lawsuit filing that the acquisition “held no assets, aside from a small inventory”—meaning most of the purchase price amounted to a kickback for long-term contracts. 

Bloomberg reports:

Lawyers told a federal judge in Chicago yesterday that they reached a “settlement in principle” to resolve a 2007 lawsuit by whistle-blower Maureen Nehls, a court docket entry shows. The terms, if final, weren’t entered into the docket. U.S. District Judge John J. Tharp Jr. set a hearing for Sept. 25.

Nehls claims Omnicare’s $25 million purchase of Total Pharmacy Services LLC in 2004 included a kickback to one of its owners, Philip Esformes, and his father, Morris. That payment helped Omnicare win contracts with nursing homes owned or controlled by Morris Esformes and gave the company thousands of elderly and disabled customers, according to the complaint.

Nehls sued in Boston with [fellow whistleblower Adam] Resnick under the U.S. False Claims Act, which lets whistle-blowers sue on behalf of the government and share in any recovery. The U.S. Justice Department declined in January 2010 to join the case. They also sued under false claims laws in Illinois and Florida.

On May 11, Omnicare settled a case with the Justice Department for $50 million. The agency called it the “largest controlled substance settlement in history,” and said Omnicare gave nursing home residents medicines without a prescription, with missing prescription information or without documentation.

The former owners of Total Pharmacy Services LLC, Philip Esformes and his father, Morris Esformes, were not included in the settlement, Bloomberg notes.

“Philip Esformes understands that Omnicare made a business judgment to reach a settlement in this case,” said Philip Esformes’ lawyer, Michael Pasano, in an email to Bloomberg. “That settlement in no way speaks to Mr. Esformes’s position, and Mr. Esformes continues to emphatically emphasize he has done nothing wrong and is in no way liable in this matter.”

Read the full piece.

Written by Alyssa Gerace 

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Starting in October, Medicare will penalize more than 2,000 hospitals whose readmission numbers have been deemed excessive, says Kaiser Health News. As a result of those penalties, the hospitals will collectively lose about $280 million in Medicare payments in the next year, part of a federal push to start reimbursing care providers based on the quality of care that’s being given.

The movement toward managed care puts more emphasis on where patients go once they’ve been discharged from the hospital, and the senior living industry has an opportunity to position itself as post-acute care partners who can effectively keep people from returning to an acute care setting. 

Kaiser Health News reports

With nearly one in five Medicare patients returning to the hospital within a month of discharge, the government considers readmissions a prime symptom of an overly expensive and uncoordinated health system. Hospitals have had little financial incentive to ensure patients get the care they need once they leave, and in fact they benefit financially when patients don’t recover and return for more treatment.

Nearly 2 million Medicare beneficiaries are readmitted within 30 days of release each year, costing Medicare $17.5 billion in additional hospital bills. The national average readmission rate has remained steady at slightly above 19 percent for several years, even as many hospitals have worked harder to lower theirs.

The penalties, authorized by the 2010 health care law, are part of a multipronged effort by Medicare to use its financial muscle to force improvements in hospital quality. In a few months, hospitals also will be penalized or rewarded based on how well they adhere to basic standards of care and how patients rated their experiences. Overall, Medicare has decided to penalize around two-thirds of the hospitals whose readmission rates it evaluated, the records show.

A total of 278 hospitals nationally will lose the maximum amount allowed under the health care law: 1 percent of their base Medicare reimbursements. 

The maximum penalty will increase after this year, to 2 percent of regular payments starting in October 2013 and then to 3 percent the following year. This year, the $280 million in penalties comprise about 0.3 percent of the total amount hospitals are paid by Medicare.

Some of the 2,211 hospitals facing penalties in October are top-ranked institutions, Kaiser notes, while others have made a conscious effort to reduce readmissions but haven’t seen measurable improvements. 

The article also talks about concerns that have been raised over the penalizations, especially for hospitals whose primary patient census may be more prone to readmissions for various reasons, including race and socio-economic status. 

Read the full piece

Written by Alyssa Gerace

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Now that Representative Paul Ryan (R-Wisc.) has been tapped as presumed GOP presidential candidate Mitt Romney’s running mate, there’s an uproar about his budget proposal, which includes extensive changes for the Medicare program, including the introduction of a voucher system for seniors to purchase private health insurance plans. 

Ryan’s budget would drastically change how Medicare is structured and it would impact Medicaid, too, but many seniors—for now, at least—support the Wisconsin congressman, according to a Washington Post-ABC News poll which showed half of the 65+ crowd viewing Rep. Ryan favorably. 

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Credit: Washington Post-ABC News, 2012

“The numbers suggest Democrats’ attempts to turn Ryan’s Medicare proposal against the GOP haven’t stuck yet among the most pivotal group: seniors,” writes the Washington Post. “If a Medicare attack was working, after all, seniors would likely be the first group to start deserting Ryan.”

With most of the fuss focused on Medicare, not too much attention has been given to Ryan’s proposal to revamp parts of the Medicaid payment system.

A Politico article explains:

While Paul Ryan’s Medicare plan is getting all the headlines, his plan for Medicaid is every bit as dramatic. But because Medicaid helps the poor—who don’t vote—rather than seniors—who do—it hasn’t dominated the presidential race like Medicare has.

Ryan’s budget would turn Medicaid into block grants to the states. That’s not a new idea; Republican governors have been demanding that since at least the Reagan years, which is another reason the issue isn’t capturing the headlines right now.

But Ryan’s plan delivers: It would reduce growth in Medicaid spending by $800 billion in a decade and repeal the Medicaid coverage expansion under the Democrats’ health care law.

Ryan’s “massive cuts,” Joe Biden said on the campaign trail this week, “could throw 19 million people in distress off of Medicaid, including 1 million seniors, roughly 75 percent of whom are women. How do they think these people in nursing homes are there? Who do they think pays for that? Seventy-five percent of those octogenarians, those elderly—I mean genuinely elderly—persons in homes, they’re there because of Medicaid,” he said.

Forbes contributor writes:

The joint state/federal health program for the poor is also the nation’s largest single payer of long-term care services. One third of its budget–or $120 billion–goes to long-term care.

Today, the federal government pays just under 60 percent of all Medicaid costs, and in some states it pays more than 70 percent. As Medicaid costs rise, the federal payment automatically increases. But Ryan would end that system. Instead, the feds would decide each year how much to spend on Medicaid and send those dollars to the states as a block grant. States would get much more flexibility in running their programs, but they’d also get lots less money.

The Congressional Budget Office projects Ryan’s plan would reduce federal Medicaid spending by $800 billion over the next 10 years. By 2040, federal spending for Medicaid would be cut in half. As a result, Medicaid-funded long-term care services would be forced to compete for shrinking resources with health programs for poor children and their mothers. Nursing home payments would be slashed, home care would be limited, and the level of services would be vastly different from state to state.

Ryan’s plan could also bear implication for non-Medicaid services such as transportation, meals, information services, and affordable housing for seniors, says Forbes, as many of these programs are already under pressure. 

For now, at least, says the Washington Post, the Republican’s plan for the Medicare program isn’t scaring seniors away.

Written by Alyssa Gerace

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Coordinated care models for seniors who are dually eligible for Medicare and Medicaid deserve consideration among healthcare policymakers, finds a July 2012 Avalere Health LLC report conducted on a managed care plan in Arizona that’s under contract with the Centers for Medicare & Medicaid Services (CMS).

CMS’s initiative toward coordinated, integrated care for dual eligibles has prompted 26 states to test different models, including contracting with managed care organizations or integrated provider networks. One such managed care organization is the Phoenix, Ariz.-based Mercy Care Plan, which was established in 1985 and is currently under contract with CMS and the Arizona Health Care Cost Containment System. 

The nonprofit health plan serves more than 340,000 Medicaid, Medicare Special Needs Plan, and developmentally disabled members and is administered by Schaller Anderson, an Aetna company, and Avalere analyzed its care and utilization measures for its members compared to the nationwide fee-for-service Medicare dual eligibles. 

Avalere found that Mercy Care Plan members were more likely to use preventive services and had lower rates of inpatient or emergency department utilization and all-cause readmissions relative to patterns of care for dual eligible populations enrolled in the fee-for-service model of Medicare. 

Findings of the research include a 21% lower hospital readmission rate and 9% less emergency department visits, which can be significant in cost-savings for the Medicare program.

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“These findings suggest that Mercy Care’s model of care is successful in keeping people out of the hospital and in lowering readmissions relative to fee-for-service,” Avalere concludes. “Moving forward, the Mercy Care model should receive careful consideration among policy makers looking to improve health outcomes while reducing costs for dual eligible beneficiaries.”

View the analysis here

Written by Alyssa Gerace 

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