Challenges in skilled nursing facilities: a conversation

The future of skilled nursing facilities (SNF) has been a popular topic within the health-care and senior housing sectors, as occupancy rates continued to decline throughout the year. Moreover—beginning Oct. 1, 2019—a new case-mix model known as the Patient-Driven Payment Model (PDPM) will replace the existing case-mix classification methodology. As PDPM links skilled nursing reimbursement to value rather than therapy volume, operators need to learn how to rapidly adapt to the changes that PDPM entails. 

Multi-Housing News reached out to Frank Small, senior managing director & chief investment officer at Greystone Healthcare Investments, to share his point of view on the current state of the SNF market and how the upcoming changes are already impacting the sector. While some owners and operators are considering to exit the SNF market prior to PDPM taking effect, others are looking for ways to successfully respond to this inevitable shift.

What is causing occupancy declines in the SNF sector?

Small: There are a number of factors creating the industry headwinds, including changes in reimbursement by both public—federal and state—and private payers, wage pressure and competition from alternative sites: Long-term acute care hospitals, assisted living and home health.

What do the new regulatory and market reforms involve? How do you think PDPM will impact the SNF sector?

Small: PDPM curtails the emphasis on overall volume of therapy hours and incentivizes treatment of higher acuity patients. Operators who have historically focused on treating high-margin Medicare patients through the provision of therapy are likely to face a dynamic shift in their revenue stream. The new PDPM system will require operators to generate revenue from a more diversified provision of existing services, which will require more sophisticated systems to account such care. 

Read the full discussion at Multi-Housing News.

Topics: Risk Management , Staffing , Uncategorized