Senior Living News Wire

The Centers for Medicare & Medicaid Services (CMS) announced Wednesday a billion dollar funding opportunity for round two of its Health Care Innovation Awards, focusing this time on post-acute care innovation. 

CMS will spend up to $1 billion for awards and evaluation of projects from across the country that test new payment and service deliver models that will deliver better care and lower costs for Medicare and Medicaid, along with the Children’s Health Insurance Program. 

Brookdale Senior Living (NYSE:BKD), the largest national senior living provider, received $7.3 million in Round 1 of the Health Care Innovation Awards in a partnership with the University of North Texas Health Science Center to test its Transitions of Care program for independent living, assisted living, and memory care residents. 

This second round of awards will support public and private organizations in four defined areas that have high likelihood of driving healthcare system transformation and delivering better outcomes.

Proposals submitted to CMS must be for models designed to rapidly reduce Medicare, Medicaid, or CHIP costs in post-acute settings; models that improve care for populations with specialized needs; and models that test approaches for specific types of providers to transform their financial and clinical models.

Lastly, CMS is seeking proposals for models that improve the health of specific populations, whether geographically, clinically, or by socioeconomic class, through activities focused on engaging beneficiaries; prevention; wellness; and comprehensive care that extend beyond the clinical service deliver setting. 

As part of the application, applications must submit the design of a payment model that is consistent with the new serve deliver model they’re proposing. 

The eligibility for these awards extends to all types of organizations who have developed innovations that will drive significant improvement in population health, quality of care, and total cost of care, including provider groups, health systems, public-privtae partnerships, faith-based organizations, and for-profit organization. 

CMS will accept letters of intent to apply for the awards beginning June 1 through June 28, 2013. Applications can be submitted between June 14 and August 15. 

Find out more. 

Written by Alyssa Gerace

The senior care industry can expect increased Medicare fraud scrutiny in the next couple years as the Obama administration seeks to recoup program dollars to help fund health insurance coverage expansion, according to a senior member of a law firm’s Healthcare Practice Group. 

“[Because of] healthcare reform, President Obama will try to find any Medicare fraud or abuse they can to reclaim money,”  said John Durso, JD, partner at Ungaretti and Harris, at Life Services Network’s annual meeting and expo in May. “[The administration] is focusing on that in our Medicare programs, in nursing homes and hospitals, to try to fund the expansion of healthcare reform to those who are currently uninsured.”

Under healthcare reform, more than 21 million people will become eligible for Medicaid-funded insurance coverage if all states participate in the program expansion, according to the Kaiser Family Foundation. While state spending is only expected to increase by about 3%, federal spending on the Medicaid program would rise 26% to nearly $1 trillion. 

The federal government has promised to cover 90-100% of care costs for the expected millions of new Medicaid beneficiaries at a time when state and federal Medicaid budgets are already strained. It’s led the Obama administration to look for ways to redistribute or recoup dollars from its other programs, such as through cracking down on fraud, said Durso. 

“It’s real money if they find people doing something wrong. They can hit them up for [re]payments out of their next Medicare payment,” he said. “It could be a huge money source.”

In fiscal year 2012, the Department of Health and Human Services and Department of Justice reported recovering $4.2 billion in taxpayer dollars from individuals and companies that had been fraudulently billing Medicare for reimbursements. Durso expects that amount to rise in fiscal year 2013 as the government redoubles efforts to prevent and halt Medicare fraud and crack down on fraudsters. 

Already in 2013, The Ensign Group (NASDAQ:ENSG) has reached an agreement with the Department of Justice to resolve Medicare overpayment allegations in a settlement that could reach $48 million. 

Life Care Centers, the nation’s third-largest nursing home chain, is currently under federal investigation, accused of overbilling Medicare millions of dollars for unnecessary or excessive therapy. 

Grace Healthcare LLC, a Chattanooga, Tenn.-based nursing home manager, has also been a False Claims Act target accused of billing for medically unnecessary rehabilitation therapy. The company and its affiliate have agreed to pay $2.7 million to resolve the allegations.

Another False Claims Act recouped $700,000 from Fairfax Nursing Center, a Virginia-based skilled nursing facility accused of billing Medicare for providing “excessive and medically unnecessary” therapy services to Medicare beneficiaries. 

Skilled nursing providers aren’t the only care providers facing scrutiny. 

“Opportunity for fraud is more prevalent in hospital settings than in nursing home settings,” Durso said. But skilled nursing facilities, like hospitals, chase referrals allowing them to bill for certain revenue-producing services, such as rehab. 

To avoid Medicare’s hammer of justice, he cautions, know the rules—and follow them.  

Written by Alyssa Gerace

Former Life Care Centers of America employees are speaking out against the company, which is currently under federal scrutiny amid allegations it has been overbilling Medicare millions of dollars each year for unnecessary or excessive therapy, reports CBS This Morning (CTM).

With more than 30,000 beds, Life Care Centers is the nation’s third-largest nursing home chain and was paid $4.2 billion in Medicare reimbursements between 2006 and 2011. 

A CTM investigator spoke with a few former employees who claim the company is giving patients rehab they don’t need, and billing the government for money they’re not entitled to receive.

Helen Toomey, a former assistant manager and speech therapist at one of Life Care’s Massachusetts facilities, estimates that around 40% of the therapy she was ordered to provide toward the end of her tenure at the company was unnecessary or “not reasonable” under Medicare guidelines. 

Toomey ultimately resigned—but took with her a communications notebook with patient notes that she has shared with the FBI. 

Entries in the notebook show how Life Care Centers wouldn’t let patients get discharged, according to Toomey, so Medicare billing could continue. 

The Justice Department is suing the company, which billed nearly 68% of its Medicare patient days at the highest rate possible—almost double the national average of 35% of patient days—according to a report from the Office of the Inspector General. 

That report also revealed that nearly a quarter of all Medicare payments made to nursing homes are made in error, costing taxpayers $1.5 billion a year.

The problem, says CBS This Morning, is that Medicare rarely checks to make sure care is necessary.

Regional inspector general Jody Nudelman described this practice of unchecked fraudulent billing a “growing problem,” as Medicare has yet to take significant action.

“It’s all of us that are paying the cost,” she told CBS. ”Until you create incentives to bill for the right care and not for the most care, the problem will continue.” 

“Life Care strongly disagrees with the allegations and will vigorously defend its therapy programs…[Our own analysis] indicates that Life Care’s practices have resulted in significant savings to the Medicare program…This lawsuit’s allegations second guess, after-the-fact, the trained medical professionals who prescribed the level of care provided to Medicare beneficiaries.”

View the segment.

Written by Alyssa Gerace

Assisted Living News

From the Times-News (Ida.)—Assisted Living Concepts Community Regains License, Opens Doors

“A year after Chaparelle House closed its doors, the assisted living facility received its license back and is reopening. In April 2012, the Idaho Department of Health and Welfare revoked the license for the Twin Falls assisted living facility, which forced 18 residents to find new homes,” reports the Times-News. “State surveyors determined the facility wasn’t employing enough staff, Idaho Department of Health and Welfare spokesman Tom Shanahan told the Times-News last year. Prior to recent administrative changes, there were 10 complaints filed against parent company Assisted Living Concepts [NYSE:ALC] between 2009 and 2011.” Read more…

Nursing Home News

From The Daily Republic (S.D.)—Rural Nursing Homes Struggling to Survive

“What’s the gap between breaking even and making money on the average patient in a rural South Dakota nursing home? About $30 to $40, according to many nursing home officials interviewed in The Daily Republic’s print circulation area. That’s the difference, they say, between Medicaid reimbursements and the actual cost to provide care for residents,” reports The Daily Republic. ”Rural nursing homes in South Dakota are largely dependent on state and federal funding to provide care for residents, leaving little left left over to provide extra amenities and upgrades.” Read more…

From the Hartford Courant (Conn.)—State Doubles Financial Penalties for Nursing Homes

According to a spokesman for the [Connecticut Department of Public Health], the department’s licensing and investigations unit “recently reviewed and updated the financial penalties it levies against nursing homes for the various classes of violations it issues.” The fines were generally doubled,” reports the Hartford Courant. “[Spokesman William] Gerrish said the federal Centers for Medicare & Medicaid Services (CMS) recently updated their civil penalties, and ‘we felt it was also appropriate for us to review and update the penalties we had been levying under our state jurisdiction. Because the fines had remained at the same level for many years, DPH felt it was time to increase their level to bring them into alignment with today’s economy and make them a more effective regulatory tool, he said.” Read more…

From the Herald Tribune (Fla.)—Lawmakers, Lobbyists Push for Nursing Home Tort Reform

“Florida lawmakers are pushing for sweeping deregulation of the nursing home industry that would protect owners and investors from financial penalties resulting from lax patient care,” reports the Herald Tribune. “The overhaul comes as advocates for seniors say loose government oversight has already weakened standards for care of the elderly in a state considered the nation’s nursing home capital. Lobbied for by nursing home investors, who have financially backed the campaigns of several GOP lawmakers, Senate Bill 1384 would stop all patient lawsuits at the direct management level.” Read more…

From The Woonsocket Call (Mass.)—Health Inspectors Shut Down Nursing Home

“Town health officials Sunday abruptly closed the Blackstone Nursing & Rehabilitation Center and ordered the evacuation and relocation of the nursing home’s 25 residents after it was discovered the Butler Street facility had been without heat and hot water since Thursday afternoon. Town officials were tipped off about conditions at the facility after the daughter of one resident went to visit her mother Sunday and saw her and other residents sitting around wearing coats and eating off paper plates. The facility had no heat or hot water due to a cracked boiler plate,” reports The Woonsocket Call. “The 25 residents were brought to various nursing facilities owned and managed by the same company that owns the Blackstone facility—Norwood, Mass.-based Rehabilitation Associates, which operates nine small rehabilitation and skilled nursing centers, as well as an outpatient rehabilitation center.” Read more…

From the St. Cloud Times (Minn.)—Health Bill Proposal Includes Wage Raise for Nursing Home Workers

“Minnesota’s nursing home and long-term care workers would get small salary increases in a health spending bill up in the Minnesota House,” reports the St. Cloud Times. “The raises are 3 percent for nursing home workers and 2 percent for long-term care workers. The Democratic-sponsored, $5 billion health and human services budget is on the House floor Monday.” Read more…

From the Associated Press—Okla. House OKs Nursing Home Camera Proposal

“The Oklahoma House has approved a bill that says people can’t be denied residence or kicked out of nursing homes if they or their families place cameras in their rooms,” reports the Associated Press. “The bill passed without opposition Monday. It now goes back to the Senate for further consideration.” Read more…

From the Sacramento Business Journal (Calif.)—Nursing Homes Reduce Antipsychotic Meds Use, But Don’t Reach Goal

“California nursing homes reduced unnecessary use of antipsychotic medications by 8.5 percent last year, making better progress on the initiative than 39 other states, but not meeting the targeted 15 percent drop,” reports the Sacramento Business Journal. “California nursing homes reported a 19.3 percent average use of antipsychotics, below the national average of 22.9 percent.” Read more…

Miscellaneous 

From the New York Times—State Suspends Managed Care Enrollment on Fraud Suspicions 

“State officials have suspended enrollment in New York’s largest managed long-term care plan for frail elderly and disabled people, and investigators have begun examining the relationships between such plans, which are financed by Medicaid, and the social adult day care centers that send them new customers,” reports The New York Times. “On Thursday, investigators from the Medicaid fraud control unit of the state attorney general’s office were in Brooklyn gathering evidence that some centers had persuaded seniors to sign up with incentives like free takeout food, casino visits and cash before steering them to managed care companies eager to enroll them in plans designed for older people with long-term needs like home health care and nursing.” Read more…

From the TR Tribune (S.C.)—University-Affiliated Senior Community Annexed by S.C. City

“At its regularly scheduled meeting Thursday night, Travelers Rest City Council unanimously approved an ordinance to annex Furman University and Furman Foundation properties into its city limits. This was the second and final reading of the ordinance, which was approved on first reading in March,” reports the Travelers Rest Tribune. “Multiple properties—including the university campus, the golf course, the Vinings at Duncan Chapel apartments and the Woodlands at Furman retirement community—are included in the annexation. The annexation will increase the size of Travelers Rest by over 900 acres, about one-third of its current size.” Read more…

From the Post-Gazette (Pa.)—State Looks to Develop Dementia Care Plan

“Twenty-eight states have adopted strategic Alzheimer’s plans to address what many view as the biggest scourge afflicting the elderly population, but Pennsylvania — the fourth-grayest state in the country — is not among them,” reports the Post-Gazette. ”The Corbett administration is attempting to acknowledge the disease now with appointment of a broad Alzheimer’s Disease State Planning Committee charged with producing recommendations by February.” Read more...

Skilled nursing facility operators in Minnesota are finding themselves between a rock and a hard place as they deal with Medicare reimbursement cuts along with constricted state Medicaid budgets that are expected to grow even tighter.

“At this point, I would classify our situation as fairly desperate,” Jon Riewer, CEO and president of Moorhead, Minn.-based Eventide Senior Living Communities, told North Dakota-based Inforum.com. “It’s hard not to feel like one of the most important things we can do as a state is protect our seniors, but we very much feel like we’re at the bottom of the food chain.” 

State legislators have set a budget target of cutting about $150 million from the DHS’s two-year, $11 billion budget, Inforum.com reports. 

Eventide isn’t the only senior living provider impacted by state lawmakers’ budget proposals for Minnesota’s Department of Health and Human Services, according to Riewer.

A side effect of reduced reimbursements, Eventide is having difficulty retaining employees, in turn making it harder to provide quality care to residents, he says in the article.  Plans for 2-3% pay raises for caregivers built into lawmakers’ budget-cutting proposal will be “too little too late.”

Labor costs typically account for 50-70% of a senior care facility’s operating budget, according to labor management software company OnShift, and many providers say they can’t afford to pay their employees more as they struggle to protect their bottom lines from the impact of state funding cuts. 

The consequence for some is high turnover among caregivers who haven’t been getting raises and whose wages may not reflect the kind of work they do. 

Those pay-related retention issues and reimbursement cuts along with other factors are putting nursing homes at risk all across the state, Patti Cullen, president and CEO of Care Providers of Minnesota, told Inforum. 

Out of about 380 nursing homes in the state, approximately 115 are in financial crisis, according to the article.

Rather than pursue more budget cuts to the DHS, Minnesota needs to invest in senior care and services, says Gayle Kvenvold, Aging Services of Minnesota president and CEO.

“Minnesota is aging,” she told Inforum. “We need to address the demographics and we need to do it in this coming biennium. We need to be ready.”

Read the full article.

Written by Alyssa Gerace

The Ensign Group, Inc. (Nasdaq:ENSG) announced on Monday that it will pay the government up to $48 million as part of a settlement agreement with the Department of Justice to resolve allegations of overpayment by federal healthcare programs.

Ensign expects to enter into a corporate integrity agreement with the Department of Health and Human Services’ Office of the Inspector General (OIG) and make a single lump-sum payment to the government to resolve overpayment allegations against the long-term and senior care provider, in connection with the settlement.

In anticipation of the settlement, Ensign recorded a $15 million charge in the fourth quarter of 2012 and says it will increase its reserve by an additional $33 million in the first quarter of 2013, representing a total reserve of $48 million to satisfy the tentative settlement obligation, the company said in a statement.

Ensign, which has a market capitalization of  about $753 million, expects to pay the alleged settlement amount to the government in the second or third quarter of 2013.

“We are pleased to put this matter behind us and look forward to focusing on our mission of providing compassionate care to patients and achieving our goal of setting the standard for high quality healthcare services throughout the industry,” said Christopher Christensen, Ensign’s President and Chief Executive Officer. “We already have made and will continue to make significant investments in our infrastructure to enhance our compliance program, and we are confident that we are well prepared to comply with the terms of a corporate integrity agreement.”

Ensign has denied engaging in any illegal conduct. While it has agreed to pay the settlement amount to resolve the allegations and avoid the “uncertainty and expense” of a protracted legal battle, the company will not offer any admission of wrongdoing.

While Ensign doesn’t expect the settlement and resulting payment to have a substantial adverse effect on its long-term financial position, business plan, or prospects, it will impact Ensign’s GAAP results of operations and cash flow for fiscal year 2013, according to the statement.

Additionally, the senior care provider will incur ongoing costs associated with enhanced compliance activities, including monitoring expenses and other costs under the corporate integrity agreement, along with interest expense on a portion of the settlement amount. This total sabot $2.5 million a year, and Ensign has revised its previously-announced earnings guidance for 2013 to a range of $2.72 to $2.81 per share.

Pending the successful conclusion of the ongoing settlement discussions, Ensign expects the tentative agreement will “fully and finally” resolve the DOJ investigations.

Written by Alyssa Gerace

The retirement security of one of America’s largest populations could cause a ripple effect into the broader economy, according to a U.S. News article. 

With the baby boom generation approaching old age in record numbers, the nation is facing a “looming catastrophe” unless people begin changing their ways—and changing them soon, says the article. 

Nearly 4 in 10 retiree households do not have sufficient income to cover monthly expenses, according to research from Fidelity Investments.

Additionally, over half of Americans have saved less that $25,000 in total savings, not counting the value of their primary homes or pension plans, Ronald O’Hanley, Fidelity’s president of asset management and corporate services, told U.S. News. 

What’s more, O’Hanley says, is that about 28% have set aside less than $1,000. 

Boomers will have to consider their financial preparedness as factors such as longevity and healthcare are expected to consume much of what this group has saved for retirement. 

Studies have shown that 70% of Americans will require long-term care services, writes U.S. News, and as most long-term care is paid for by Medicaid, a swelling boomer population could end up swamping the program in the years to come.

As individuals usually have to spend-down their savings to be eligible for Medicaid, they are not likely to afford private insurance that would cover the costs of long-term care. 

Funding Medicaid expansion by higher payroll taxes, suggests the article, would increase financial support to this aging population without adding to deficits.

Since health care is one of the biggest expenses for retirees, forcing people to save more money for health care would help to reduce retirement expenses, and would in turn result in a strengthening of the nation’s retirement system, according to U.S. News.

Read the articles from U.S. News here and here.

Written by Jason Oliva

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. 

Long-Term Care News

From MedPage Today—Long-Term Care Panel Seen as Likely to Flop

“Without financial support, the federal government’s new unpaid and volunteer long-term care commission is likely to do little more than produce yet another report about the challenge of providing care for an aging nation, experts said,” writes MedPage Today. “‘At the end of the day, it will be another report that will sit in the Library of Congress collecting dust,’ said Jesse Slome, executive director of the American Association for Long-Term Care Insurance. ‘But one day this will have to be addressed … because you can only kick the can down the road for so long.’” Read more…

From the Daily Democrat (Calif.)—Bill Seeks Stronger Long-Term Care Consumer Protections

“On a unanimous, bipartisan 6-0 vote, the Senate Human Services Committee has approved Senate Bill 609 by Senator Lois Wolk, D-Davis, legislation to increase penalties for long-term care providers that hinder investigations by California’s Long-Term Care Ombudsman program,” reports the Daily Democrat. “SB 609 would increase the penalty, from $1,000 to $2,500 for long-term care providers that inhibit an Ombudsman’s access to residents or otherwise interfere with state efforts to investigate facilities.” Read more…

From the NewsObserver.com (N.C.) Bill Would Restore Funding for Specialized Dementia Care

“Rep. Nelson Dollar, a Cary Republican, filed a bill last week that would allow people with Alzheimer’s disease and other forms of dementia to receive as much as 130 hours of personal care services each month. The increase would require approval from the legislature and the federal agency that oversees Medicaid and Medicare,” reports the NewsObserver.com. “The new Medicaid rules limit personal care to 80 hours a month per resident. Adult-care home operators say they were sending in bills for 124 hours a month, on average, for those residents under previous guidelines. The legislature allowed operators to tap in to a state fund to help bridge the gap, but that money runs dry on June 30.” Read more… 

Nursing Home News

From the Orlando Sentinel (Fla.)—The Villages Seeking Permission to Build Nursing Homes

“Age may be finally catching up with The Villages, the sprawling retirement haven for the over-55 that promises recreational activities “beyond imagination.” It needs nursing homes,” reports the Orlando Sentinel. “Proposed bills in the Legislature would allow developers of the community with 100,000 residents to build nursing homes, adding up to 240 bed spaces, despite the state’s moratorium on new nursing-home beds.” Read more…

From the Melrose Patch (Mass.)—Rising Costs Force Nursing Home Closure

“Despite being one of the highly-ranked nursing homes in Massachusetts and nationwide, Tuell Nursing Home will be shuttering as soon as the end of next week, according to co-owner Michael Cummings,” reports the Melrose Patch. “With rising costs and no state increases in the past handful of years, Cummings explained said there was no other alternative but to close. Cummings, who has worked as an operator and owner in the industry since 1981, said the past two years have been the most challenging running Tuell given the reduced funding at the state level.” Read more…

From PressOfAtlanticCity.com (N.J.)—Nursing Home Files Layoff Notices in Preparation for Sale

“The management company for a for-profit Galloway Township nursing home and pediatric care center filed a mass layoff notice for 212 employees in preparation for a sale to another company that will run both facilities,” reports the Press of Atlantic City. “The Health Center at Galloway and the Pediatric Day Health Center at Galloway are owned by Cherry Hill-based Seniors Management North, a privately owned health care management company. Both facilities are located at 66 W. Jimmie Leeds Road, which was assessed at $10 million last year, according to tax records.” Read more…

From The Daytona Beach News-Journal (Fla.)—Nursing Home Fined $36k for Mishandling Sex Abuse Claim

“The state this week levied a $36,000 fine against Avante at Ormond Beach nursing home for its handling of a sexual abuse allegation. Inspectors with the Florida Agency for Health Care Administration found the nursing home did not properly report an allegation that an employee crawled into bed with a patient,” reports The Daytona Beach News-Journal. “The fine is considerable by state standards, where the most serious offenders typically see fines of about $40,000, said Brian Lee, executive director of Families for Better Care, an organization that advocates for nursing home residents and their families.” Read more…

From St. Louis Today (Mo.)—Safety Funding Boost for Missouri Long-Term Care Facilities 

“A three-year grant of $574,208 from the Missouri Foundation for Health will provide safety culture and Patient Safety Organization (PSO) services for Missouri long-term care (LTC) facilities through the Center for Patient Safety,” reports St. Louis Today. “The PSO plan for LTC facilities includes initiatives to improve awareness of resident safety and the ability of participating organizations to improve their resident safety programs. The Center will provide resources to help them meet anticipated federal requirements. Because it also works with hospitals and EMS providers, the Center can help long-term care facilities provide safer care in collaboration with other providers.” Read more…

From Fergus Falls Journal (Minn.)—Providers, Legislators Concerned by Long-Term Care Cuts

“Considering the need of area nursing homes and long-term care facilities to retain and recruit employees, the proposed $150 million in Health and Human Services cuts to fix the state deficit would have a negative impact on the local economy, said Rep. Bud Nornes, R-Fergus Falls,” reports the Fergus Falls Journal. “Nornes said the cuts would mean that nursing home administrators, which were hoping to receive the state funding that would allow for a five percent increase, would likely receive only a 2 percent increase, not all of which would be dedicated to wage increases.” Read more…

Funding cuts have turned county-run nursing homes in many states into an endangered species in the past couple of years resulting in multiple facility closures, but one county is taking several steps to keep its nursing home open and, eventually, profitable. 

Pennsylvania counties have been steadily selling off or closing their nursing homes, according to the Pennsylvania Association of County Affiliated Homes, and only 33 county owned and operated facilities remain in 28 counties, says a recent PennLive article. 

“Some counties decided a county nursing home is very much a part of their mission. Even if it operates at a deficit, they think that’s a good use of county taxpayer dollars,” Mike Wilt, the association’s director, told PennLive. “Other counties feel differently about it, and after many years of losses, they decide it’s time to sell.”

Cumberland County, which runs the Claremont Nursing and Rehabilitation Center in Carlisle, Pa., is hoping to avoid the need to sell the facility by expanding its service offerings, reports PennLive.

The county commissioners have already negotiated a new union contract that includes nursing home employee concessions amounting to $800,000 in a bid to keep the facility open, but that won’t be enough.

A combination of rising operational expenses and flat Medicaid reimbursements, which account for 80% of the nursing home’s income, have hit Claremont hard—especially in the last two years, says PennLive. 

“Years of Medicaid shortfalls coupled with recent and severe Medicare cuts have forced many of our state’s skilled nursing centers to reduce staff, freeze wages or reduce benefits, delay renovations, and delay purchases that could enhance care,” Alison Everett, spokeswoman for the Pennsylvania Health Care Association, told PennLive. “These funding cuts are causing the safety net to come apart at the seams.”

Claremont’s reserves were tapped extensively in 2011 and 2012, standing now at about $2.7 million down from nearly $5 million. In order to staunch the losses, says the nursing home’s administrator, Karen DeWoody, Claremont will expand its operations to generate more revenue.

This will include converting a former on-site daycare into a skilled rehabilitation unit, reports PennLive, that can serve both short-term patients and long-term residents in need of acute care. 

While the new rehab facility will cost an estimated $1.7 million, funded by the nursing home’s reserves, it will bring in Medicare dollars along with managed care money, according to the PennLive article. Once those funds are being produced, the county will then launch a second phase that includes more upgrades and care offerings. 

The county’s contract with the union also included an agreement to not sell the nursing home during the contract’s term, which expires in December 2015. 

Read more at PennLive.

Written by Alyssa Gerace

The Scooter Store announced Tuesday that it will move to “transform its business model” through the sale of substantially all of its assets under section 363 of the United States Bankruptcy Code.

As part of these efforts, the company has entered into a voluntary chapter 11 case in the United States Bankruptcy Court for the District of Delaware.

The announcement follows allegations that the company engaged in Medicare fraud, stemming from a government audit that revealed about 80% of Medicare reimbursements for power wheelchairs (aka scooters) are made in error, with a majority going to people who don’t actually need them or can’t prove their need, according to a recent CBS This Morning investigation.

A report from the Department of Health and Human Services Inspector General found The Scooter Store overbilled Medicare by as much as $108 million between 2009 and 2012. 

The Scooter Store did agree to repay nearly $20 million for chairs it admitted Medicare should not have reimbursed them for after the HHS Inspector General threatened to suspend it from federal health programs, according to CBS. 

The company reportedly “disputes the government’s audits, [which] found the company owes as much as four times what it’s agreed to repay.” 

Those allegations may have contributed to The Scooter Store’s bankruptcy filing, although the company’s CEO said they plan to continue offering power chairs following a restructure. 

“Unfortunately, historical overhangs coupled with an increasingly complex regulatory environment and mounting economic pressure in the healthcare sector have significantly impacted the company’s ability to operate under its current model,” said CEO Martin Landon.

The company said that it is adjusting to new market conditions and strengthening its business model to maximize value, compliance, profitability and the quality of customer service.

A new model will help The Scooter Store maintain its core product offering within a network of high value, local distribution center businesses, the company said. 

“The Company is using the chapter 11 vehicle to seek to create a new, financially healthy provider that operates in strict accordance with all legal, contractual and regulatory requirements,” continued Landon, “which would help the company complete the business turnaround that we were brought in to do.”

The Scooter Store expects to continue operating with its current workforce level throughout its restructuring phase. Additionally, the company said it has also filed a variety of motions seeking approval to pay employee wages, and honor customer warranties and program. 

The company also said that its suppliers should expect to be paid for goods and services delivered after the filing, and that the company also intends to meet all contract, quality and supplier standards associated with existing payer agreements. 

Written by Jason Oliva

Skilled nursing facilities could soon share responsibility—and accompanying penalties—with hospitals for avoidable readmissions, as the Department of Health and Human Services (HHS) included the Medicare Payment Advisory Commission’s (MedPAC) recommendation to Congress in its fiscal year 2014 budget proposal. 

About 14% of Medicare patients discharged from hospitals to skilled nursing facilities are rehospitalized for conditions that potentially could have been avoided, according to MedPAC analysis. 

HHS’s proposal reduces payments by up to 3% for skilled nursing facilities with high rates of care-senisitve, preventable hospital readmissions beginning in 2017 in a bid to promote high quality care and potentially save $2.2 billion over 10 years.

The Affordable Care Act places emphasis on hospitals and their ability to provide quality care while achieving cost savings for Medicare and reducing preventable hospital readmissions, but the skilled nursing industry has “considerable opportunities” to improve the care they provide and arrangements made for post-discharge care, MedPAC said in its Congressional report.

“If facilities faced rehospitalization penalties, they would be more inclined to ensure that patients were physically ready, to see that their families were adequately educated (e.g., about medication management, advance directives, and hospice care), and to partner with high-quality community services to avoid readmission to the hospital,” says the report regarding last year’s recommendation to reduce skilled nursing facility payments for high readmission rates. 

For the 2013 report, MedPAC staff worked with a contractor to develop a risk-adjusted measure of rehospitalization during the 30-day window following discharge from a skilled nursing facility. 

The method considered patients’ comorbidities, ability to perform activities of daily living, whether the patient and a surgical procedure during a prior hospital stay, and the number of times the physicians’ orders were changed as a reflection of patient instability. 

Discharges from skilled nursing facilities, excluding direct hospitalizations and deaths, were to long-term nursing home care 31% of the time, to home health care services 45% of the time, and back to the community with no services, or some other type of care such as hospice, 24% of the time.

The average risk-adjusted rate of rehospitalization after discharge from the skilled nursing facility for five potentially avoidable conditions factored into the method was 10%, MedPAC found, and compared with the rates while the beneficiaries were in the skilled nursing facility, there was more variation across facilities. While about one-fourth of facilities had readmission rates of 7% or lower, another quarter had rates of 12.5% or higher.

“When the separate rehospitalization rates are considered together, they indicate that over 28% of beneficiaries were rehospitalized (for any one of the five conditions) either during or after a SNF stay,” MedPAC writes in the report. “This finding suggests considerable opportunities for SNFs to improve the care they provide and the arrangements they make for beneficiaries after discharge. It also represents considerable program spending for those hospitalizations that could have been avoided.”

Beginning in 2018, the HHS budget also proposes implementing a bundled payment system for post-acute care providers, including skilled nursing facilities, home health providers, and inpatient rehab facilities. Rates would be based on patient characteristics and other factors producing a permanent and total cumulative adjustment of rates, bringing them down 2.85% by 2020 and resulting in an estimated $8.2 billion in savings over 10 years. 

View MedPAC’s March 2013 report to Congress or HHS’s 2014 budget proposal. 

Written by Alyssa Gerace

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. 

Nursing Home News

From ElderLawAnswers.com—Court Upholds Ruling of Son’s Responsibility for Mom’s Nursing Home Bill

“In May 2012, a Pennsylvania appeals court found a son liable for his mother’s $93,000 nursing home bill under the state’s filial responsibility law. Health Care & Retirement Corporation of America v. Pittas (Pa. Super. Ct., No. 536 EDA 2011, May 7, 2012),” writes ElderLawAnswers. ”In March 2013 the state’s Supreme Court declined to hear the case, meaning that the ruling is final.” Read more…

From the judgment: “Though Appellant is correct that it was HCR’s burden to establish his ability to support his mother, we hold that HCR met its burden. As a result, Appellant’s first request for a new trial is without merit.” Read more…

From Kentucky.com—Bills Seeking Protection for Nursing Home Residents Fail to Pass

“House Bill 73, a bill that would continue a criminal background check program for nursing home employees, was passed by the House but was never heard by a Senate committee. If a similar bill isn’t passed in the 2014 session, the fingerprint background check program—currently paid for through a $3 million federal grant and an additional $1 million in state funds—will end after June 30, 2014,” reports Kentucky.com. “Bills that would create a registry of workers who have had substantiated cases of adult abuse or neglect also failed to pass for the fourth straight year. Gov. Steve Beshear had earmarked $1.2 million in the 2012-2014 budget for the creation of the adult abuse registry.” Read more…

From EnterpriseNews.com (Mass.)—New Law Provides Safeguards for CCRC Residents

“Governor Deval Patrick held a ceremonial bill signing Wednesday for legislation that will give residents of continuing care retirement communities additional consumer protections and housing rights,” reports EnterpriseNews.com. “The legislation will give residents of Continuing Care Retirement Communities the right to establish a resident’s association, receive a current copy of the facility disclosure statement and receive information on fees and construction. Providers must make reasonable efforts to explain the terms of disclosure statements, adjustments in monthly fees, information that may affect the health and welfare of residents and the future of the facility, including the ownership and providers’ financial health.” Read more…

From NewsOK.com—Nursing Home Camera Bill Advances in Okla. Legislature

“[On Tuesday,] a legislative committee unanimously passed a bill that would allow nursing home residents or their family members to put video recorders in their rooms,” reports NewsOK.com. “[The bill] also would prohibit a nursing home facility from refusing to admit a person who wants a recording camera in the room or remove a resident because a camera is in the room. Backers are confident Senate Bill 587 will get eventual approval of the full House. It was approved in the Senate 44-0.” Read more…

From NJ.com—Whistle-Blowing Verdict Against Nursing Home Gets Overturned

“A state appeals court has overturned a verdict against a Bridgewater nursing home accused of firing a nurse in retaliation for him reporting allegedly improper patient care to government agencies in January 2008,” reports NJ.com. “Jurors in March 2012 agreed with the claim made by James Hitesman that his termination from Bridgeway Senior Healthcare violated the Conscientious Employee Protection Act, or CEPA, which is designed to protect employees in whistle-blower cases. But the appellate judges found that since the code of ethics only applies to nurses, it cannot be cited as part of a CEPA claim against Bridgeway.” Read more…

From The News-Herald (Ohio)—Nursing Home to Close, Displacing Residents

“Broadfield Care Center at 7927 Middle Ridge Road sent a letter to its residents Thursday notifying them its skilled nursing facility will close in 90 days,” reports The News-Herald. “Provider Services, which bought Broadfield three years ago, issued a statement Friday. The statement didn’t provide a reason as to why the 81-bed facility is closing. No plans have been made on what will happen to the facility and its 80 skilled nurses.” Read more…

From the Harford Courant (Conn.)—Bill Prohibiting Violent Criminals to Live in Nursing Home Advances

A bill spawned by the controversial Rocky Hill nursing home proposal cleared one legislative committee and was forwarded to a second on Tuesday. In its current form, the bill would amend existing state law to prohibit people convicted of sexual assault, along with convicted murderers, from residential nursing home placement,” reports the Hartford Courant. “If it becomes law, and is not vetoed by Gov. Dannel P. Malloy, the bill would take effect at enactment.” Read more…

Senior Care & Long-Term Care News

From the News-Journal.com (Tex.)—Senate OKs Overhaul of Medicaid-Funded Long-Term Care

“The Texas Senate unanimously approved an overhaul of long-term and acute care Medicaid services on Monday in an effort to expand care to more disabled Texans while saving millions of state dollars. “We cannot continue to fund the same inefficient, unsustainable long-term care system and expect a different result,” said Sen. Jane Nelson, R-Flower Mound, the author of Senate Bill 7,” reports the News-Journal.com. “SB 7 is expected to save $8.5 million in Medicaid costs in the 2014-15 biennium by expanding managed care services, establishing pilot programs to try to provide services at capitated costs and implementing measures to ensure more efficient monitoring of services.” Read more…

From the Post-Tribune (Ind.)—Ralliers Call for More Senior Care Options

“Senior citizens and physically handicapped people gathered at the Statehouse on Wednesday to share the importance of home and community-based services that can help keep people in their own home, instead of having to move to a long-term care facility,” reports the Post-Tribune. “At the Rally for Independence, Indiana residents from all corners of the state gathered to show how a little funding to help those who would prefer to stay home on their own goes a long way.” Read more…

From the National Senior Citizens Law Center—Calif. Dual Eligibles Agreement with CMS

“[On March 28], California’s Department of Health Care Services (DHCS) and the federal Centers for Medicare and Medicaid Services (CMS) announced an agreement to redesign the way Medi-Cal and Medicare services are delivered to low-income older adults and people with disabilities in California,” says the National Senior Citizens Law Center. “Under the agreement, dual eligibles will be automatically enrolled into capitated managed care plans responsible for delivering all Medicare and Medi-Cal services in exchange for a single payment. The payment will be less than the two programs spend on the population today. Enrollment will begin this October. As many as 456,000 people will be impacted.” 

While the federal Medicaid program is reportedly safe from cuts in President Obama’s forthcoming fiscal year 2014 budget, the same is not true for Medicare and Social Security, writes the New York Times.

Next week, the president is expected to formally propose cuts to Social Security and Medicare in his annual budget, according to administration officials, in what the N.Y. Times calls a “significant shift in fiscal strategy.”

The White House budget plan is scheduled to be sent to Capitol Hill on Wednesday. In previous years, the president’s budgets have essentially been declared “dead on arrival” by Republicans, but this plan contains compromises, says the Times.

In addition to containing some tax increases, the budget also proposes a new inflation formula for calculating Social Security benefits, called chained CPI, although there will be some financial protections for low-income and very elderly beneficiaries, says the Times citing administration officials.

Using the chained CPI formula—said to more accurately measure inflation compared to how it’s currently calculated—will reduce the cost of living adjustment (COLA) payments for Social Security benefits and could eventually reduce spending by $216 billion in a 10-year time frame, along with generating $124 billion in revenue, according to an estimate from the Congressional Budget Office. That translates to a total deficit reduction of $340 billion, not counting interest savings. 

The Medicare program will also likely see more cuts, amounting to $400 billion in savings. Those savings will mostly come from reductions in payments to healthcare providers, according to the Times, which could potentially affect skilled nursing providers. The president is expected to also propose tying Medicare coverage costs to income. 

Under the president’s budget plan, projected annual deficits would be reduced by $1.8 trillion in the next 10 years, replacing the sequester’s $1.2 trillion in deficit reduction. 

Read more at the New York Times.

Written by Alyssa Gerace

A pilot program focusing on transitions between levels of care—including hospitals and skilled nursing facilities—has yielded hugely successful outcomes in reducing rehospitalizations, with the potential of spreading to more post-acute senior care settings. 

Healthcare reform initiatives have emphasized reducing preventable hospital readmissions, and in October, the Centers for Medicare & Medicaid Services (CMS) began implementing reimbursement cuts to hospitals with higher-than-expected readmission rates.

While preventing rehospitalizations might not prove to be an easy fix, a session during the Aging in America Conference in Chicago last week suggested that collaboration between various health providers can be one way to significantly reduce them. 

Through funding from both CMS and the Administration on Aging (AoA), the Aging & Independence Services (AIS) and Aging and Disability Resource Connection (ADRC) have been able to achieve significant reductions in hospital readmissions through the Care Transitions Intervention (CTI) Program.

“I truly believe that all communities that are a part of this program have the opportunity to learn from one another and make system-wide changes to reduce readmissions in this country,” said AIS Aging Program Administrator Brenda Schmitthenner in a conference session about the CTI program.

During a CTI pilot in 2009, a partnership between Sharp Memorial Hospital in San Diego and AIS/ADRC saw only seven readmissions from a total sample of 88 patients. 

Developed by Eric Coleman, MacArthur Fellow and Professor at the University of Colorado School of Medicine, the CTI model incorporates what are called the “Four Pillars” of criteria to ease a patient’s transition period from the hospital to a skilled nursing facility or the home.

These Four Pillars include the establishing and maintaining of patients’ personal health records, medication lists, specialist follow-ups and recognition of “Red Flags,” or symptoms of chronic illness.

Sharp Memorial Hospital ended up adopting the CTI Program following the success of the pilot, and now it has expanded to the University of California San Diego Medical Center and Scripps Mercy Hospital.

The CTI model even led to the birth of another initiative to reduce hospital readmissions called the San Diego Care Transitions Partnership (SDCTP) Design.

To design SDCTP, AIS collaborated with a variety of San Diego health care providers as well as the UCSD Health System with the central mission of improving quality of care for patients during transition periods, while also reducing readmissions for high-risk beneficiaries.

“SDCTP is committed to reducing readmissions by 20% in two years,” says Schmitthenner. “Failure is not an option.”

The program also looks to include what it calls “care enhancement,” which entails providing transportation, durable medical equipment not covered by Medicare, and homemaker assistance, including medication pickup and shopping errands.

Additionally, some key elements of care enhancement also include coordination with the patient’s care team, hospital visit-discharge assessment, and home visits 24-72 hours of discharge.

The SDCTP will serve approximately 21,000 fee-for-service Medicare patients with various interventions that include: using assessment tools to conduct risk screening, using a high-risk health care coach to coordinate care and handoff to other providers upon discharge, using a pharmacist for medication education, as well as transitioning patients into palliative care and hospice.

Currently, Schmitthenner says the SDCTP design team is customizing an IT solution for invoicing, data collection, monitoring and reporting to compile a database that shows what hospitals provided which types of interventions.

The transition between care settings can sometimes induce harmful side effects on a patient’s physical well-being, according to the American Medical Directors Association, making programs that focus on coordinated care during these transitional periods necessary to ensure patients leaving institutional settings remain healthy during the recovery process.

Written by Jason Oliva

Medicare margins in skilled nursing facilities are expected to range between 12% and 14% in 2013, according to the Medicare Payment Advisory Commission (MedPAC) in its  most recent report to Congress, indicating that the sector’s payment system needs to be restructured and rebased.

MedPAC recommended revising the skilled nursing facility Prospective Payment System (PPS) for 2014, which would result in an additional cut of at least 4% on top of the 2% cut in Medicare reimbursements healthcare providers must absorb due to sequestration.

In MedPAC’s March 2012 report to Congress, the commission recommended restructuring the skilled nursing payment system and then to rebase payments the following year, with no update to that year’s payment rate.

The commission based that recommendation off of several factors, it says, including “high and sustained” Medicare margins, widely varying costs unrelated to case mix and wages, cost growth “well above” the market basket, reflecting “little fiscal pressure from the Medicare program,” and the ability of many skilled nursing facilities to have consistently below-average costs while providing above-average care.

The industry has demonstrated a continued ability to maintain high margins despite changing policies, MedPAC said. The report also cites some Medicare Advantage payments to facilities that were “considerably lower” than Medicare’s fee-for-service (FFS) payments, which the commission believes indicates a willingness to accept rates much lower than FFS payments for beneficiaries.

“No policy changes have been made that would materially affect the trajectory of these findings going forward,” MedPAC writes of their previous recommendations in the 2013 report. “Therefore, the Commission maintains its position with respect to the SNF PPS and urges the Congress as soon as practicable to direct the Secretary to revise the PPS and begin a process of rebasing payments.”

Nursing home trade groups are opposed to MedPAC’s recommendations, citing already slim operating margins when considering enormous shortfalls from Medicaid underpayments.

“Considering the fact 40 states have cut or frozen state Medicaid SNF rates since 2009, today’s MedPAC recommendation, as it does annually, fails to properly evaluate overall Medicare-Medicaid operating margins—the lowest of any provider group,” said Alan Rosenbloom, President of the Alliance for Quality Nursing Home Care, in a statement.

The sector is currently facing $65.6 billion in “unsustainable” Medicare cuts over the next ten years, Rosenbloom said

Non-Medicare margins (Medicaid and private pay) in 2011 ranged from an estimated –1% to –3%, MedPAC found, while total margins ranged from 4-6% considering all payers and lines of business.

Increases in payments between 2010 and 2011 outpaced increases in providers’ costs, the commission found, reflected in the continued concentration of days in the highest payment case-mix groups.

Payments in 2011 were “unusually high” because of overpayments resulting from an adjustment made with the implementation of the new case-mix groups, said MedPAC, which were then followed by an average 11.1% reimbursement rate reduction effective Oct. 1, 2011.

Margins in the skilled nursing industry ranged between 22-24% in 2011, MedPAC estimated—the eleventh year in a row Medicare margins were above 10%. However, the commission noted those margins were estimated without Medicare cost reports, which hadn’t been available in time for the MedPAC report.

Medicare spending in skilled nursing facilities for 2011 was $31.3 billion and comprised about 6% of the program’s overall spending, estimates the Office of the Actuary.

View MedPAC’s March 2013 report.

Written by Alyssa Gerace