Magic or mayhem: What's ahead? | I Advance Senior Care Skip to content Skip to navigation

Magic or mayhem: What's ahead?

November 8, 2011
by Richard L. Peck, Contributing Editor
| Reprints
Part 1 of a two-part series

Predicting can be a fool's game-so many unforeseen events, personalities and circumstances can intrude to cloud the crystal ball. Predictions are as notorious for being wrong as for being right. Still, after you've been around for a while and developed some sense of discrimination between the golden clues and the dross, you can begin to discern at least a reasonable view of the future. I venture to do so with a field with which I've been associated for nearly three decades-that is, 10 predictions for long-term care, starting with the Big One foreshadowing all the rest.


It is a disaster: A family with a frail elderly loved one or suddenly disabled young person encounters the personal expense of long-term care for the first time and falls, quickly and unexpectedly, into the impoverished ranks of Medicaid. A disaster for providers, too, as their margins are squeezed by already tight state budgets, if not lost altogether. Add to that Medicare reimbursement cuts amounting to 11.1 percent this fiscal year, along with a never-ending housing crisis smashing traditional private-pay piggybanks, a private LTC insurance industry struggling to find its financial footing and raising already hefty premiums, and a steadily diminishing middle class.

Even the one piece of potential relief in sight, the CLASS (Community Living Assistance Services and Supports) Act, met its demise recently with the Obama administration's decision to suspend it idefinitely. Designed to be supported by premiums paid through voluntary payroll deductions for five years, but with uncertain public buy-in, CLASS was a testament to actuarial fogginess, with no one quite sure of its fiscal soundness.

This all adds up to a quiet disaster because those families that stumble into long-term care one by one are generally unaware of the financial realities until it's too late. This lack of public understanding explains government policies that casually cut facility reimbursements by the billions and eventually hundreds of billions of dollars without large-scale debate.

This is the environment governing all the predictions that follow in this article. By the same token, as the vast baby boom generation and its parents start learning their LTC lessons the hard way, public perception will grow exponentially. The LTC financing model will almost certainly change no matter what happens to Medicare, Medicaid or CLASS. The predictions that follow do in fact indicate what that model will eventually look like, and which providers will likely succeed and prosper.

But first, a grim reality:


OBRA ′87 and the Minimum Data Set (MDS) occurred well after Ben Franklin's time or his list of life's inevitabilities would have read, “death, taxes-and regulation.” Whatever happens with LTC financing, operational models or public perception in the coming years, continued regulatory micromanagement is a good bet for this field.

Within the past year SNFs have been hit with a complicated update for the MDS (never an easily comprehended document to begin with) which, among other things, changed RUG-based assessment rules and expanded the discharge process for already time-challenged staff. More recently the PPS Final Rule calls for far more detailed rehabilitation documentation and assessments rescheduled in ways threatening potential confusion. Misinterpretation in this field is dangerous, of course, as it can lead to reimbursement cuts, outright denials-or worse. Government is cracking down with the recently introduced Recovery Audit process, and the Affordable Care Act (“Obamacare”) has placed new emphasis on federal enforcement of LTC corporate compliance, with specific program requirements, new penalties and possible federal False Claims Act prosecution for the worst offenders.

Meanwhile, the 20-plus-year-old state survey process continues unabated, despite uneven enforcement efforts by the states and the gradual advent of an alternative survey approach called the Quality Improvement Survey (QIS). Adding to the regulatory challenge are workplace safety requirements from the federal Occupational Safety and Health Administration and ever-changing labor relations dictates from the National Labor Relations Board, among others.

LTC leaders are challenged to maintain updated regulatory compliance without adding significantly to costs. Those who will succeed are among the elite of American business managers, even though no one says as much.


To read the headlines, nursing homes, assisted living facilities-even CCRCs-might as well close their doors and go home. Go home, that is, to serve that vast majority of people who wish to remain there the rest of their lives. Recent data from the AARP and the National Association of Home Builders, for example, indicate that 89 percent of people 50 and older want to remain in their homes indefinitely, and 75 percent of remodelers are receiving increased orders for aging-in-place work on private homes. Combining this with developments in home-based technologies (see “Technology”), what possible reason would people have for moving into facilities?