Long-term care? In this economy? A clear-eyed view of challenges for the nursing home industry and what we can do about them.

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Those working in long-term care could be forgiven for wondering just what they did to make the universe so angry. Budgets were already tight and staff stretched thin before the COVID-19 pandemic hit. Everyone suffered in the maelstrom that followed, and those working in the field held on by the skin of their teeth.

With the pandemic finally tamed by vaccines, antivirals and immunity (not to mention a fair amount of apathy), it’s time to move on to a bright tomorrow, right? Wrong. The post-acute sector faces enormous obstacles in the years to come. If you thought it was bad before, the challenges to come might make you positively nostalgic for face masks.

Here are five upcoming obstacles, along with two ways that you can manage them in these uncertain times.

Obstacle 1: Ready or not, baby boomers will place astonishing new pressure on the system

According to CNBC, the oldest baby boomers will start to turn 80 in 2025, also known as three years from now. A gigantic demographic cohort will enter an age range in which many require skilled care in nursing homes.

“This is an enormous issue,” Howard Gleckman, a senior fellow at the Urban Institute, told CNBC. “Advances in technology and public health have allowed people to live longer in a condition of frailty, and we haven’t developed a long-term care system to keep up with that.”

Financial pressures could be overwhelming. Some 45 percent of the demographic don’t have anything saved for retirement, and of those who do, more than a quarter have less than 100,000. Meanwhile, the average annual cost for a nursing home room was $102,000 — in 2019.

Obstacle 2: The Supreme Court could open up government-owned nursing homes for greater liability.

If you think this nation’s court system will come to the rescue, you’re mistaken. As a matter of fact, the U.S. Supreme Court may be preparing to make everything much worse.

As Med Law Advisory Partners shared this summer, Talevski v. Health and Hospital Corporation et al. could upend the nursing home legal landscape by allowing plaintiffs to pursue cases based on federal law, not just state rules. 

We wrote in June that: “Court watchers note that if the Supreme Court agrees with the 7th Circuit, the result could be financially onerous for government-owned nursing homes, especially because these lawsuits could result in significant verdicts against nursing homes that are outside of any statutory damages caps, plus the award of attorneys’ fees.”

Of note: The government owns 1,007 facilities, and half of them are in Indiana. So the Hoosiers among us will want to pay attention.

Obstacle 3: More False Claims Act investigations could be coming down the pike, putting everyone on high alert.

Speaking of the federal government, the Justice Department has recently taken an interest in long-term care facilities.

A June 22 post at JD Supra outlines what the department is doing. It’s “increasingly utilizing substandard quality of care as the basis for False Claims Act cases as part of the National Nursing Home Initiative launched by the DOJ in March 2020. Last year alone, the federal government collected over $5.6 billion in recoveries under the False Claims Act.”

Med Law outlined the issue and its implications for readers in July. To summarize, the government argues that facilities providing substandard care are making a false claim when filing for government reimbursement. Given the variety of laws and regulations that apply to long-term care, that could open providers up to liability in unexpected — and expensive — ways.

Obstacle 4: States are already being battered by nursing home closures, with more on the way.

Beyond demographic changes and unpredictable government actions, nursing homes grapple every day with familiar problems. Staffing shortages and high costs have become just another part of the landscape.

Unfortunately, even familiar potholes can still wreck your car.

McKnight’s Long Term Care News reported in August 2022 that Montana has seen seven nursing homes close in six months, meaning a total of 10 percent of beds in the state have vanished into thin air. That’s part of a national trend, with 1,000 facilities closing over the past seven years.

 “The workforce shortage was exacerbated by the pandemic,” Rose Hughes, executive director of the Montana Health Care Association, told McKnight’s. “The shortage means large increases in wages, benefits, bonuses and other incentives, as well as a significant increase in the use of high-cost agency workers. It also means that facilities are turning away people who need care, because they can’t find or afford enough staff to provide care.”

Replacing these lost beds won’t be simple or even viable, given the state-by-state challenges. And as we saw at the beginning, upcoming demographic changes will only increase demand. What will happen to older folks in Montana?

Obstacle 5: Think you have a workplace shortage now? The government is looking carefully at payments.

Speaking of retaining staff, the government has added another wrinkle to the situation.

McKnights covered the entire mess last month, and while the particulars involve the wild and wooly world of Medicare pay rights, here are the basics. The government created a new pay system in 2019.

“After its debut, however, providers and regulators alike quickly suspected that federal payments were more generous than the system’s budget-neutral stipulation called for,” Danielle Brown wrote. “But five months into PDPM’s implementation, the full force of the pandemic hit, throwing the U.S. healthcare system into a state of uncertainty it had never before encountered. Any plans to readjust PDPM payments were indefinitely postponed.”

The government, being the government, has decided it wants that money back. After proposing to do it all in one year through cuts, it listened to the industry and decided on a two-year phase-in. An overall increase in funding means that the reduction ultimately won’t sting the way it could have.

“Thousands of providers, lawmakers, and stakeholders shared how a swift cut to Medicare would be detrimental to our nursing home residents and staff, and we are grateful that CMS listened and made the necessary changes,” said American Health Care Association President and CEO Mark Parkinson.

That won’t be the last time the government tries trimming nursing home payments.

Solution 1: Take a long, hard look at your long-term needs

We’ve gone through the challenges and potential challenges.

Now it’s time for some self-reflection. Think about how you and your organization fit into this sometimes scary landscape.

Don’t tell yourself happy stories about the future and assume all will work out for the best. Now’s the time to take all of the above into account and make a serious appraisal of your long-term care facility. Are you ready to face the challenges? Are you already nearly underwater? What are you worried about today, tomorrow and a few years from now?

These issues should only escalate as time passes. A clear-eyed appraisal of the American political system would suggest that an overhaul of our health care system won’t come anytime soon (not that it would be guaranteed to solve the problem in the first place).

Solution 2: Find an experienced partner to help you navigate this forbidding landscape.

Yes, it’s a lot to take in right now. Nursing homes and all those who help them serve patients and prosper financially have gone through one wringer, with more wringers promised.

Yet Med Law Advisory Partners stands ready to assist. They have deep experience in reducing risk, improving patient care and helping facilities look out for their bottom line.

As they state, their “team has worked with owners/operators of senior-living care facilities for over 20 years, helping mitigate risk and manage claims. Med Law consultants have extensive expertise working in direct patient care and administration in long-term care facilities, contributing an unparalleled depth of knowledge of issues and guidelines unique to post-acute care claims.”

That depth of knowledge makes a difference. Long-term care facilities might not be able to make the universe less angry at them, but they can take common-sense measures to fortify themselves and provide the best possible care, while taking care of their employees and managing costs.

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