NIC 2012: Why Quality Care & Outcomes Matter to Your Bottom Line

Quality matters, and keeping track of data and providing good outcomes in skilled nursing facilities is crucial, especially as failure to do so could seriously impact a facility’s bottom line, said a panel of experts at the National Investment Center for the Seniors Housing & Care (NIC) Skilled Nursing Symposium in Boca Raton, Fla.

Documentation, Documentation, Documentation

Documentation is key, the panel said.

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“If you don’t have documentation, you stand risk of being in trouble if you’re audited,” said Trissie Copses Farr, Senior Vice President at Formation Capital/Formation Healthcare Group, adding that getting audited isn’t actually a matter of “if”—it will happen. “It is crucial to the success of your clinical practice that documentation is accurate, appropriate, and done correctly.”

“If it’s not written down, it wasn’t done,” said Michael Jones, CEO and Principal of Healthtique Group.

Carefully keeping track of staff training and time is crucial, and inaccurately entering Minimum Data Set (MDS) data can lead to increased citations. This can in turn lead to reduced Medicare reimbursements and lower quality scores, which could also result in legal liabilities if families of residents see bad marks on nursing facilities’ public “report cards.”

Being prepared for survey teams is critical, Jones said, as bad surveys can lead to an increased number and/or severity of citations, along with an increase in impositions and enforcement. Managing staff time while surveys are being conducted is another consideration, as labor accounts for roughly 65% of operating expenses.

“Quality of care is very important, but you also have to be able to manage the survey process,” he said. “Be efficient with data collection.”

Public Perspective’s Impact on Financial Outcomes

How well facilities with Medicare and Medicaid census perform clinically is public knowledge, thanks to Nursing Home Compare and the Centers for Medicare & Medicaid Services’ (CMS) five-star ratings.

That means that when government surveys are conducted, the results are available to anyone, including potential residents or their families, lenders, and investors.

Additionally, those entering rehabilitative skilled nursing are getting younger, which often means they’re more “tech savvy,” said Farr, and they could be more likely to research available services and access relevant data.

And if the public is seeing bad outcomes and poor ratings, they’re less likely to choose that facility, which leads to less revenue.

However, there are ways to combat poor reputation through good marketing strategies, says Jones. He gave an example of a particular facility with good quality of care and favorable outcomes, but a bad reputation in the marketplace. The facility’s administrators began a concerted effort to build relationships with hospitals and launch additional marketing efforts, and when CMS introduced its five-star rating system, it bestowed the facility with all five stars.

The facility went from thinking about shutting down and selling for about $1.5 million, to being valued at about $7 million, thanks to marketing and good clinical outcomes, Jones concluded.

Other financial impact from public perception can stem from U.S. News’ annual “Best Nursing Homes” of the year list, or even a regional ad placed in the Wall Street Journal that listed eight one-star facilities, telling readers to call if they’d been a victim of elder abuse at one of those low-rated facilities, said Jones.

Lenders’ Perspective on Clinical Outcomes

“Lenders aren’t looking to take on any risk. They want to avoid risk, and don’t feel that [loan] covenants are going to make up for the risk associated with an operator who’s having problems,” said Len Lucas, a senior director at Love Funding.

Poorly performing facilities often land on the so-called “Special Focus List,” and it’s very difficult to get financing for a facility on that list, Lucas continued. And even if it’s in a portfolio where the Special Focus Facility isn’t the focus, its presence on that list is going to have an impact on the other properties. Smaller operators are hurt by this more than the bigger ones, he said, because they don’t have as many properties to spread the risk on.

Written by Alyssa Gerace

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