Ohio Living has a window of opportunity to increase revenues via Medicare Advantage in 2021. In fact, capturing more dollars via MA is a linchpin in the Columbus, Ohio-based nonprofit provider’s “revenue reform and recovery” strategy, CEO Larry Gumina told Senior Housing News.
Ohio Living is a partner in the Perennial Consortium, an operator-owned MA network, alongside fellow providers including Juniper Communities and Christian Living Communities and managed services partner and risk management company AllyAlignHealth. Currently, Gumina estimates MA penetration in Ohio stands at around 41%. By offering its own plans via Perennial, he believes that Ohio Living can bring in revenue that currently is flowing to third-party MA insurance companies. For every MA resident at Ohio Living currently, Gumina estimates that the provider could earn $500 to $700 that is going to insurance companies, instead.
With the Perennial Consortium plans currently enrolling members for the 2021 plan year, Ohio Living wants to capture that potential revenue. With 13 communities across the Buckeye State totaling nearly 3,300 units, this is a major opportunity to open a new revenue stream for the provider. Ohio Living ranks 18th on the 2020 LZ 200 list of top nonprofit providers compiled by investment bank Ziegler and industry group LeadingAge.
“Simply put, we’re providing the care at the bedside, so we should be compensated accordingly,” he said.
Ohio Living also plans to continue solidifying its service line diversification. Its home health and hospice segments have realized significant growth during Covid-19, and the provider is set to launch a new physician services line. This helps mitigate ongoing pressures in Ohio Living’s higher care segments, as more seniors choose to postpone moves to senior housing but require some form of health care services.
In this interview, Gumina also discusses other facets of Ohio Living’s revenue reform strategy; whether senior living and care will be a priority for the incoming Biden administration; the ongoing isolation of senior housing residents; and permanent expense increases stemming from the pandemic.
This interview has been edited for length and clarity.
Do you believe the Biden administration will be more receptive to the pandemic-related needs of senior living?
If you were to ask me that 10 months back, I would be pretty infuriated about us being low on the totem pole. That tide has turned, fortunately.
What we can expect as an industry from the new administration is to keep the aggressive push on the vaccines and the delivery. We’re expecting their first batch [in mid-December] in Ohio, but we need to ensure that the distribution is well-orchestrated, seamless and quick, so that we can begin to vaccinate our health care heroes and our residents.
Second, we must make sure that we continue to be at the table in terms of making sure that we’re getting the increased production and being treated equally with the rest of the health care industry. That wasn’t the case 10 months back, but it is today.
Another industry concern is the possibility of more federal oversight of senior housing. Do you expect a Treasury Department under Janet Yellen to push for accounting of how CARES Act money is spent?
We’ve received funding from the state of Ohio. We’ve received grant money. The accounting of these dollars and how they’re applied organizationally gets more clarity every day. It’s important for us to make sure as an industry — certainly at Ohio living — that we’re properly accounting for those dollars. If they are not applied appropriately, there should be some clawbacks from the federal government, from CMS, and from Yellen.
But going forward, we’re continuing to see a drain in occupancy. The effects of this pandemic have increased the reputation risk of our segment of aging services. The reputation challenges we’ve had historically are concerning, yet I think the climb just got steeper. Specifically, our staffing continues to be a challenge.
In our previous conversations, you touched upon the isolation seniors are undergoing right now to be a growing concern. With vaccines on the horizon, how is Ohio Living planning to address this?
When the vaccine is administered, we’ll be in a better position to safely relax the stringent guidelines that we have in place right now. I’ve been doing this for 30 years. Resident rights are imprinted in my brain as an operator. I’ve been on phone calls with frustrated family members who can’t come in and see their mom or dad, and that hurts. Yet, we have an obligation to make sure that we keep everyone safe. When vaccines [are administered], we’ll be in a better position to softly relax those rigid guidelines that we have in place right now. But we have to own some of this, too.
We have an obligation to continue to advocate. I look at [new state legislators] coming into Ohio — a large percentage of those legislators have no clue, with all due respect, about the health care industry, let alone the aging services sector. We have an obligation to educate. That’s part of our agenda. If we can assist in the education of those legislators, they’ll be in a better position to effectively advocate on our behalf for changes. But it hurts right now to know what we’re intentionally doing to our residents who we’re caring for.
What permanent expense increases do you see coming out of the pandemic?
The number one expense increase that we’re going to be assuming is increased wages, because of the demand for labor and the importance of our caregivers and our associates who are providing care and support to those we serve.
We have historically been on the low side of the wage index. And an underpinning to increased wages is increased reimbursement. It ties back to historically low Medicaid funding from the states; every state is different. What we’re seeing now is an increased recognition from CMS of our segment of the delivery system, and it’s long overdue.
Now, with the light shining a little bit brighter on our segment, I would love to see increased reimbursement to our service sector.
In addition to advocating for higher reimbursement rates, what steps are you taking to drive revenue?
We’re continuing to move forward with our open enrollment in our Medicare Advantage special needs plans. So from a revenue reform perspective, as we continue to see increased Medicare Advantage penetration in Ohio — which I think right now is sitting about 40%, 41% — we’re seeing this as an opportunity for us to not only provide more care at bedside to our residents that we can coordinate, we can orchestrate, but it’s an opportunity for us to recoup some of that revenue, right now, that’s going out to the balance sheets of these insurance companies. So that’s a revenue reform/recovery strategy that we’re embarking upon.
Where else does Ohio Living plan to drive revenue, besides its Medicare Advantage push?
We’re continuing to see growth in our home and community-based services division, Ohio Living Holdings. This is the operating entity that encapsulates our palliative care, Medicare-certified home health, and hospice segments of our mission.
We’re continuing to see growth in that segment of our mission, and we want to add fuel to that engine. What we’re going through, in the overall industry, is that we are going through a reset, we’re going to go through a reinvention, and we’ll go through a recovery. If you lump everything in together, our segment of the health care industry has been fertile for disruption for a long time. I’m a glass half-full kind of guy. At the end, we’ll come out stronger as a result of what we’re experiencing right now.
Some have said that changes to life plan communities are coming due to the pandemic. Do you foresee a growth in rental versus entrance fee models?
Yes. We’ve introduced that in our markets over the last three years. The rental model is going to be more in demand going forward and in our product offering.
Just look at where we are in the economy today. I read a publication this morning that there will be a significant amount of foreclosures in the next two years. If you look at those who are serving right now, they’re, they’re leaning on their home equity. And is that going to be there in the next 10, 15 years?
Final thoughts?
The underpinning of everything is a culture of an organization. And if you’re going to ask me what I’m concerned about it’s talent, I’m concerned about revenue reform. But it takes our people to drive this mission forward. And, and I’m really proud of our culture, but we can’t rest on where we are today. We have to continue to strengthen it through optimizing our staffing initiatives that include not only recruitment, but retention. It comes down to creating a real sound culture. We’re proud of being a Great Place to Work three years in a row at Ohio Living, but we just have to continue to do more. Regardless of whether you’re a for profit or a not for profit, it takes a team to move forward.
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