Gardant CEO: Residents Are Driving Reopening Plans, Financial Support Finally Arrives

Assisted living providers have been largely overlooked by the government’s financial support programs during Covid-19. Even Gardant Management Solutions — a large provider with significant Medicaid revenues — had to wait a long time for federal aid.

The provider had to wait until early July to apply for assistance through the $15 billion CARES Act Provider Relief Fund, which offers payments of up to 2% of reported revenue to providers participating in state Medicaid programs or Medicaid managed care plans and have not yet received a payment from the Provider Relief Fund General Distribution which opened in April.

Gardant filed its applications in mid-July and received its first payment on August 3, which was within a couple hundred dollars of what it calculated its annualized service revenue to be. But it has yet to see any relief at the state level, CEO Rod Burkett told Senior Housing News.

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“We’re five months into the pandemic and we’re just now seeing the first penny of Medicaid support,” he said.

The Bourbonnais, Illinois-based provider manages a portfolio of 56 communities — 50 of those are Medicaid certified. It pioneered a sustainable middle-market senior housing model through Illinois state Medicaid waivers, but the coronavirus pandemic has impacted the company, along with the rest of the industry. Approximately two-thirds of Gardant’s total resident population receives Medicaid assistance.

In a wide-ranging interview, Burkett shared his thoughts on whether the pandemic will increase the need for middle-market and affordable senior housing; its ongoing response to the outbreak; and the what it learned about its response compared to other major providers by participating in a congressional study on the pandemic’s impact on assisted living facilities.

This interview has been edited for length and clarity.

How is Gardant faring with Covid-19, overall?

Programmatically and financially, we’re doing fairly well, all things considered.

Like most companies, we created a Covid-19 task force right off the bat in early March. We were anywhere from about two days to two weeks early in starting restrictions and preventative measures, compared to others around us. I know we had a lot of community administrators that were hearing from frustrated family members and being called fascists and wardens. And then a week or two later, they would get calls and apologies from family members because they came on so strong, but they now can really appreciate that what we were doing was to protect the health of their loved ones.

Three of the pillars that Gardant provides to our residents are love, compassion and dignity. With family members [responding how] they were, we had to rephrase it to say, we’re providing a tough love.

How did the restriction protocols vary by care level?

We restricted communities pretty quickly to just staff. There were some end-of-life situations in hospice where we would, on a case basis, allow family one at a time, [with] PPE. In our memory care units, we had some instances where family members were essential to the care and services for that person, and we were allowing that.

Did Gardant’s Medicaid billings and census give it an advantage in securing testing early on from federal sources or state and local public health departments?

We were along the same lines as other providers in that testing was very inconsistent, with regard to timing and test results. Because we have volume in some states, we tried to do the best we could to set up alternate private testing labs, in addition to what state and local health department testing was available.

It’s gotten better, but I still think we have some inconsistency in test results. Last month, if we did 100 tests, maybe 16 of them came back within 48 hours, and then 60% of the testing came in within five days, and then stragglers didn’t come in for eight or nine days. It depends upon which state or which county we’re in, how much resources come from state or local health departments, versus what we had to do ourselves.

What are your biggest expense pressures stemming from the virus?

Definitely PPE.

A month into the pandemic, we received some stock shared from local health departments to some of our properties, and some just never did [arrive]. We were out scrapping and scratching for everything we could find. I remember telling our communities that every building needed to have their own Radar O’Reilly, someone who is begging, stealing, trading to get PPE because we’re going to help you corporately as much as we can. We’re going to order things and have you order things and build as much redundancy and try to leverage our volume.

Also, [cost increases from] disinfecting supplies in some buildings, adding on some extra labor to make sure we could execute the services that we needed. We’ve been tracking all of those in our financials and would not expect [reductions] until there’s a widely available vaccine.

We’ve been hearing from other CEOs about phased reopenings. Does Gardant have a plan for that?

We have a plan called “Reclaiming Our Home,” designed with the resident as the main stakeholder. When we lift restrictions on our communities, we want to do it from their point of view, because a lot of the decisions to secure buildings came from the top down, in crisis management. We shoved so much isolation on them, they didn’t have much say so in it.

We really wanted to do a 180-degree turn when we could lift the restrictions. Let’s look at that from the eyes of residents and families and our employees. And our residents told us that family is important. “The first thing we would like as you start lifting restrictions is, we would like to have small group activities, indoors and outdoors.” Second, they want the ability to meet with families outside in a controlled environment.

We have a very multidimensional team that guides us on how we lift these restrictions, so that residents and families are satisfied and appreciative of how we lift these things.

Do you see Covid-19 increasing the need for more affordable and middle-market senior housing?

Even before Covid-19, the baby boomer generation — and how they’re set up or not set up for retirement — put more demand for middle-market and affordable [options]. And then, [reports] say 40% feel that they’re changing their retirement plans because of Covid-19.

That’s pretty simple to draw the conclusion that this is going to create even more demand for affordable or middle-market.

We’re continuing to create volume in states that have decent Medicaid waiver programs. We continue to look at straight middle-market that might be at a price point that would make it more financially feasible for people that are not Medicaid eligible, but still need a creative financial price point. We’re keeping our eye on that but, right now, we’re in more of a maintenance mode, waiting for a vaccine. We have four properties opening in Indiana this year that we want to stabilize. But we’re always looking for that opportunity to further expand in the affordable and middle markets.

Gardant was one of 11 operators that participated in a congressional study that calculated at least 7,000 deaths in assisted living stemming from Covid-19. What insights did you learn from that report regarding your response to the virus?

When that report came out, we could compare our Covid-19 penetration rate to the group as a whole. I was a bit surprised that our penetration rate was only one-fourth of the percentage that was reported in the aggregate. It made us feel good about what we did to implement restrictions and when we did it, and that we continue to be diligent.

Then I compared our numbers with [the National Investment Center for Seniors Housing & Care’s] broad-based survey and our penetration rate was about half.

We shared that with our communities to say, we’ve got to keep doing what we’re doing, it’s paying off. While we do have some rural properties, our portfolio has a lot in Chicago and Indianapolis. We have 14 properties throughout the suburbs of Chicago, which had tremendous outbreaks in nursing homes and other assisted living facilities.

It just further solidified that we keep doing what we’re doing.

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