A growing segment of the long-term care field, continuing care retirement communities, has piqued the interest of the federal government.

The Senate Special Committee on Aging recently held a hearing on the risks involved in investing in one of these approximately 1,900 communities around the country. The communities typically require an entrance fee. Seniors spend anywhere from $20,000 to upwards of $500,000 to live there—sometimes for life. They also pay monthly fees.

During the hearing, which was held earlier this month, a report was released from the Government Accountability Office. The report found that regulation of the communities varies widely from state to state. Also a report issued from the Aging Committee found many CCRC ownership structures to be very complex, and that financial troubles at any level can have real consequences for individual residents. 

So is there is a reason for residents in CCRCs to worry? Larry Minnix, CEO of the American Association of Homes and Services for the Aging, isn't too concerned.

“We believe that the risk is minimal and that consumers should be informed,” he told McKnight's.

AAHSA, the American Seniors Housing Association, and the National Investment Center for the Seniors Housing and Care Industry actually released a comprehensive and informative report in conjunction with the hearing about this business. It offers a snapshot of CCRCs—who lives there, their history and how the financing works.

Among the findings, the report said that an estimated 65% to 75% of CCRCs offer contracts that include a lump-sum initial payment (entrance fee). The large majority of these offer some degree of repayment to the resident if he or she moves out of the community, or to the resident's estate if the resident dies.

Other notable information in the report:

—A total of 82% of CCRCs have not-for-profit sponsorship.

—Most residents represent the middle- or upper-income brackets. A total of 32% of new independent living residents reported current annual incomes ranging from $50,000 to $99,999.

—The number of CCRCs known to be in payment default or to have filed for bankruptcy since the economic crisis began only includes about 15 borrowers. Still, a number of CCRCs are facing covenant violations, or technical default situations.

—CCRCs that have filed for bankruptcy protection “in most cases have done so without adverse impact to the financial security of the residents,” the report said.

Erickson Retirement Communities comes to mind when thinking of financial risk affiliated with CCRCs. The CCRC declared bankruptcy and recently was sold to a private firm. While that was a troubling situation, it also seems to have been an anomaly because of its unusual corporate structure, which collapsed as a result of the recession. Their housing continues to serve residents.

CCRCs, while still small in number, are becoming a significant part of the continuum of care. The idea behind them is a good one. They help to protect people's wealth while providing for them medically as they age. Known for their amenities, such as upbeat dining facilities and health centers, they also offer an opportunity to age with quality care. It's hard to beat that.

To follow up on Minnix's point, people should be aware of the fine print when they move into one of these communities. CCRCs, for their part, should honor and respect the financial commitment that residents have made in their new homes.

[McKnight's writer Brett Bakshis]

When crafting legislation, horse trades are a well-established part of the ritual. What's unfortunate is that many people who have a stake in these deals don't know about them.

I'm speaking of a move last week to remove the repeal of the RUG-IV delay from the jobless benefits bill (H.R. 4213). It occurred sometime between the time the Senate approved the bill on Wednesday and when the House passed the bill on Thursday.

What was interesting, and a bit disturbing, about this development was that seemingly no one connected with the nursing home community knew about it. To make matters worse, policy and legislative experts affiliated with long-term care said they were not even aware that the repeal of the RUG-IV delay was in the bill.

How do I know this? Because of our enterprising reporter Brett Bakshis. It's fair to say that had it not been for his sleuthing, there's a chance this information never would have come to light.

As background, Bakshis saw that the repeal was in the bill last Tuesday after visiting thomas.gov, a governmental website that offers text of legislation, its sponsors and actions taken on it. Since the Senate was planning to vote on the bill, he sensed the makings of a big story. But when called, the two nursing home associations, the American Health Care Association, and the American Association of Homes and Services for the Aging, were not able to confirm that this repeal was in the bill.

And they were not the only ones. It was only after numerous calls with the associations, the Centers for Medicare & Medicaid Services, the White House, Rep. Charles Rangel's office, the office of the Speaker of the House, and a clerk with the Library of Congress that he was able to get to the bottom of the situation. Finally, the American Health Care Association confirmed Thursday that the repeal of the delay indeed was in the bill but had just been stripped out of it. (As a side note, the House has passed the Veterans', Seniors' and Children's Health Technical Corrections Act of 2010, H.R. 5712, which definitively contains a repeal of the delay.)

Do you, like I, see something wrong with this picture? If experts at the associations, CMS and others charged with following these bills say they don't know what is in them, then who does? This by the way, has been a common criticism of the healthcare reform bill. People have accused it of being so overloaded that not even lawmakers are fully aware of what's in it. One problem is that these bills, including the jobless benefits legislation, undergo numerous iterations by the time they are passed.

But the repeal of the delay of RUG-IV is a pretty important provision. Maybe, in hindsight, it's good no one knew it was in the legislation. This way, no one was disappointed when it failed to make it into the final version.

It must be summer. How do I know? Congress is dragging its heels on an important piece of legislative business.

Not that the two chambers haven't been productive. The House and Senate passed a major—some say historic—financial reform overhaul bill, so certainly they've been busy. But at least one bill is languishing in the chambers, and nursing home providers are feeling pressure because of it.

That, of course, is legislation to extend the federal medical assistance percentage (FMAP) increase. Just short of begging, governors, providers, lawmakers and now the AARP have implored Congress to pass a bill to offer some needed Medicaid relief to states—about $24 billion from January to July.

Like the doc fix dilemma, Congress knows it has to do something, but pressure  to hold down spending has slowed up the works. Also, in the mind of Congress, the 6.2% increase doesn't end until Jan. 1. So, really, what's the rush?

Of course, governors, who are frantically trying to stop their fiscal bleeding, and are planning for the next fiscal year, disagree. Many are struggling to find areas in their already-lean budgets to cut. Not an easy task. 

But budging their lawmakers will be a struggle as well. After all, they are competing with the summer mindset in Washington.

I always look forward to the research that emerges from the annual international Alzheimer's conference. This year,  the meeting has not disappointed.

Two interesting scientific developments have been reported from the Alzheimer's Association International Conference on Alzheimer's Disease in Honolulu. One (see story) involves the release of new criteria to diagnose the disease. The diagnostic guidelines would allow new technology, such as brain scans, to detect the disease before there are signs of memory loss. If adopted, the number of people with the disease could rise dramatically.

This is quite a development. To be able to identify Alzheimer's possibly years before it presents itself could lead to drugs that stop the disease earlier. But such a breakthrough also could present a philosophical dilemma: Would you want to know you have this disease years before it appears? Would the fear and anxiety of knowing you have it prevent you from enjoying your years before its onset?

As you deliberate this, another scientific discovery from the conference may make you squirm. A randomized controlled trial found that the jellyfish protein apoaequorin improves cognitive function in individuals with memory concerns. Yes, you saw correctly. A protein from jellyfish—the Aequorea victoria jellyfish specifically—may help our memories.

Quincy Bioscience, a research-based biotechnology company in Madison, WI, shared the findings. Jellyfish protein improved cognitive testing scores by 14% in 60 days compared to placebo in the Madison Memory study, which enrolled adults who had a memory concern. The average age in the study cohort of 35 people was 61 years old.

So what to make of this? Plumbing protein from gelatinous sea creatures to boost our brain power? What will they think of next? And that's exactly what I like about the annual Alzheimer's conference.

[Photo: A new apartment at Renaissance Gardens at Riderwood]

Long-term care facilities around the country are working to enhance the appeal of their units. Renaissance Gardens at Riderwood in Silver Spring is one of them.

The extended care community has de-licensed 65 of its 114 skilled nursing rooms and transformed them into one-bedroom and two-bedroom apartments.

The new apartments, which are called Assisted Living Premium and Assisted Living Plus, offer assisted living care with skilled services, explained John Mann, administrator of Renaissance Gardens, which is part of the Riderwood continuing care community in Silver Spring, MD. Assisted Living Premium is designed for residents who are able to direct their day but may need more care because of a life-altering event such as a stroke. Assisted Living Plus is for those with memory loss.

“Those residents historically would have been cared for in skilled nursing,” Mann said. “They now can live in these Premium and Plus neighborhoods.”

He notes that there are limits to how much skilled care he can deliver to these residents. If a resident needs a feeding tube or treatment for a Stage IV pressure ulcer, a visiting licensed nurse has to come in to administer this care—much like you'd see in a home-care environment, he noted.

Still other skilled-type services, such as extensive assistance with activities of daily living, catheter care and IV therapy for short periods of time “are fair game in an assisted living environment,” he said. De-licensing these units allows for a more flexible care model, he added. Staffing is based on the needs of the resident.

Consumer feedback

The decision to create apartments is the result of opinions from about 100 residents and families, Mann explained. While they liked the private rooms in skilled nursing, they wanted apartment-style living and larger residences. They preferred full baths, not half-baths, he said, along with kitchenettes.

“We have this 24-7 dining initiative, but they also wanted to know they had their own refrigerator to go to any time of day,” Mann said.

In case you were wondering how expensive these units are, Mann noted that because they are licensed as assisted living, the costs are lower. Instead of paying $9,000 a month as they would for skilled nursing, residents are paying $6,500 per month. The price includes visiting nurse services.

A different staffing model

To accommodate these particular residents, Renaissance Gardens has carved out a special role for its frontline workers. Known as household associates, these blended workers are cross-trained in duties beyond being nurse aide care, Mann said. They receive education and leadership to care for residents with dementia, to lead activities and are trained in ServSafe food handling.

The staffing ratio of blended worker to resident is 1:5 or 1:6, which is higher than the community's other assisted living residences, Mann said. There is also a registered nurse available 24 hours a day everyday, he said. Among 420 employees at Renaissance Gardens, 45 are blended workers.

Dignified living

This decision to create skilled living-type apartments pushes the culture change/homelike trend further. To be able to live in an apartment with some skilled services offers a level of independence and dignity that most skilled nursing-type environments cannot offer.  (It also shows the extent to which assisted living is serving more acute-care residents.) 

But replicating it in other settings may be a little tricky. It's worth noting that Riderwood, formerly an Erickson Retirement Community, is for residents who can pay privately. (There is a benevolent care fund for assisted living residents who move in and deplete their resources, Mann said. Some skilled residents are also on Medicaid.)

Still, whenever a long-term care community decides to improve the standard of living for its residents, it works to raise the bar for all long-term care communities.

Another proposed rehab rule threatens to cut significant revenues from long-term care providers.

The rule applies to the Medicare Physician Fee Schedule. It would reduce Medicare Part B reimbursement for secondary procedures when residents receive more than one therapy service on the same day.

Specifically, it would reduce the practice expense (a cost component in the Physician Fee Schedule) by 50% for a second procedure. Third and four procedures also would receive the 50% cut.

If this takes effect, it would reduce therapy reimbursement among all Medicare Part B settings where Part B is reimbursed by 12%, said Peter Clendendin, executive vice president for the National Association for the Support of Long Term Care. That translates to $500 million across the board, he said. Skilled nursing facilities, which are one of the larger providers of this type of therapy, would see a bigger loss than the other providers.

Not pretty, Clendenin notes, especially because it comes on top of the concurrent therapy rule, which is set to start in October, and, of course, the longstanding Part B therapy caps.

“You add this to concurrent therapy in Part A and the therapy cap in Part B, it's starting to get to be a number of therapy issues and can create some real instability,” he said.

A bit surprising

The proposed rule, which the Centers for Medicare & Medicaid Services introduced in June, was a bit of a surprise, Clendenin said. CMS introduced such a rule for surgeons four years ago and for X-ray imaging three years ago. He said he sensed it would be coming.

But the troubling part is that skilled nursing providers operate in a different way than other therapy providers, the industry veteran explained. Residents don't usually receive therapy services one after another. They make take two in the morning, come back and then do one in the afternoon. That means that some of the rituals that CMS believes are redundant still have to occur.

“To have the reduction for that third code is really inappropriate because you have to start all over again,” he said. 

Finding efficiencies

The purpose of the rule is to find efficiencies, Clendenin explained. CMS claims there is a duplication between the therapy codes.

Clendenin offers an example that could occur in the skilled nursing setting:

Mrs. Jones has therapy in the morning—wheelchair positioning and gait training. CMS allots three minutes for greeting and gowning of the patient. Both those codes—wheelchair positioning and gait training—have a three-minute allowance for greeting and gowning.

CMS believes that if Mrs. Jones goes directly from wheelchair positioning to gait training, there is no need to greet and gown again. So the agency has decided that for wheelchair positioning it will pay 100%, but for gait training, it will reduce the practice expense by 50%. 

Some of that efficiency makes sense, Clendenin said, but CMS already took such duplications into account back in the 1990s.

“I think this clearly is way over the top,” Clendenin said, adding his group intends to fight this proposed rule “pretty hard.” 

Proposed rules are subject to a 60-day comment period. You can bet nursing home providers will take full advantage of that.

President Obama has made another recess appointment—this one with big implications for long-term care.

The president appointed Don Berwick administrator of the Centers for Medicare & Medicaid Services on Wednesday. A recess appointment means that the nominee is not subject to Senate approval.

Obama made the appointment because of the Senate's delay in holding nomination hearings on Berwick. Since so much of healthcare reform is tied up with Medicare and Medicaid, Obama wants a new person at the top as soon as possible.

Berwick has been a controversial pick because of his work with the British healthcare system and a statement about rationing. Republicans have come out fiercely against him. Healthcare groups largely have stood up for him.

Many in healthcare are greeting this appointment with outright praise.

“Dr. Berwick is the right person for this era of health transformation based on defined quality outcomes and new ways of serving the needs of America's seniors,” American Association of Homes and Services for the Aging President and CEO Larry Minnix said Wednesday in a statement.

They also must be breathing some relief. There has not been a permanent CMS administrator since 2006.

Implementing healthcare reform is important. It's also about time that CMS got around to resolving some burning regulatory concerns. Fixing nursing homes' Five-Star Quality Rating System is just one of them.

So, it's been (nearly) determined. The new name for the American Association of Homes and Services for the Aging is, drum roll please, LeadingAge.

I have to say it's a pretty gutsy title. It suggests that the organization not only affiliates with the field of aging but also leads the pack. And this powerful message is exactly why the folks at AAHSA like it. The moniker sums up the package—more so than the current name does, they believe.  

“We're this incredibly bold organization on the inside,” said Sharon Sullivan, vice president of marketing and conferences, who talked to McKnight's about the new name Wednesday.

The current, soon-to-be former name, “didn't capture us on the inside,” she noted.

Of course, some 5,400 individual members still have to vote on the title by the end of the month. They may not feel the same way as Sullivan about the name, but that is unlikely. Because of the excitement the name has already generated among state executives and some state boards of directors, AAHSA decided to run it by members early, in advance of its fall meeting.

“We want to capitalize on the momentum,” Sullivan noted.

To wit: The name is strikingly similar to the name of AAHSA's magazine, FutureAge. That name was one possibility, but the creators felt that FutureAge conveyed “think tank” as opposed to an organization working now and in the future on aging concerns, Sullivan said.

It's worth mentioning that the board-approved title comes with certain catchphrases:

— The brand promise is “inspire, serve, advocate.”

— The brand ethos is “transformational stewardship.”

— The new mission is “expanding the world of possibilities for aging.”

Once members provide feedback, AAHSA will go ahead and create a new tagline and logo.

So far, it appears that AAHSA is hitting the right notes. After all, if you're going to change your identity, you may as well go for big and bold. Today, especially, a name is more than something to call yourself. It's a brand that defines you.     

The skinny on obesity

OK, America. It's time to go on a diet. About 40 states have obesity rates of more than 25%, according to a new report, “F as in Fat: How Obesity Threatens America's Future 2010.” The report contains some other particularly troubling findings. Here are a few:

— Adult obesity rates for blacks topped 30% in 43 states and D.C.

— Rates of adult obesity for Latinos were at 30% and above in 19 states.

— The 10 states with the highest rates of hypertension are in the South.

— The number of states where adult obesity rates exceed 30% doubled in the past year, from four to eight—Alabama, Arkansas, Kentucky, Louisiana, Mississippi, Oklahoma, Tennessee and West Virginia.

This is not healthy, both from the standpoint of individuals, and for our healthcare system. Obesity leads to chronic diseases, such as diabetes and hypertension, which cost big bucks down the road. It'd be nice if we could head off some of our looming healthcare costs by keeping our diets in check. But even a nearly $1 trillion healthcare bill cannot solve this one. Its up to each of us to take responsibility for our own health.

[Photo: Mark Ordan, CEO of Sunrise]

A recent move by the board at Sunrise Senior Living Inc. may prompt some questioning from those in long-term care. 

Sunrise, the country's largest assisted living operator, said in a recent government filing that it would make bonus payments to its top executives.

Specifically, CEO Mark Ordan will receive $325,000, while Chief Financial Officer Julie Pangelinan and Chief Investment Officer Gregory Neeb will receive $133,333 each, according to a Securities and Exchange Commission filing.

These bonuses represent “33 1/3% of their respective target 2010 annual bonus amounts set forth in their employment agreements,” the filing said. The executives remain eligible to receive the balance of their 2010 annual bonuses, provided they meet individual goals established earlier this month.

It is common and customary for companies to reward top officials. But the timing seems suspect here. After all, this is a firm that laid off more than 100 employees this past year, and owes a bundle to its creditors.

Sunrise's compensation committee approved the payments to "recognize the extraordinary work of the company's executive officers during a difficult and uncertain period and the significant progress that has been made on a number of corporate imperatives, including asset dispositions, extensions and restructurings of company debt, cash management and managing core business to budget," the company said in its recent filing.

It would be understandable for people to see such bonus payments as egregious, given the company's dire straits. It lost $16 million in the first quarter. It is still in default on $241 million of debt.

But it also is important to acknowledge that the company's financial situation may be turning around. The firm lost less than it did during the first quarter last year—$18 million. It is also paring down its loan obligations. If a sale of eight of nine facilities in Germany takes effect by August, the company will have reduced its debt significantly.

So how should we treat news that a company that has reduced its workforce, extended expiring credit lines and sold properties is rewarding people at the top?

We could see the bonuses as business as usual. Then again, if the company makes it through the crisis intact, we might view them as a very small price to pay. 

The American Health Care Association is hitting the road on Tuesday. That's when the association is kicking off its 40-state Driving for Quality RV Tour.

And it couldn't come at a better moment. The Senate Thursday failed to pass legislation that would extend critical Medicaid funding to states—otherwise known as the federal medical assistance percentage (FMAP). 

“The kickoff of the AHCA/NCAL Driving for Quality Care grassroots RV tour is now perfectly timed to ramp up pressure on our lawmakers to act on this vital legislation as state budget crises persist and seniors' access to care is imperiled,” Bruce Yarwood, president and CEO of the American Health Care Association, said in a statement.

And what a defeat it was. Congress had been tinkering with this bill for weeks. First, the House passed the jobs bill that excluded the FMAP increase extension. Then the Senate took the bill and carved out the Medicare physician measure as a stand-alone to concentrate efforts on the FMAP extension. But even after Sen. Max Baucus (D-MT) whittled the 6.2% FMAP increase down, Senate Republicans rejected it.

Pricey package

It was the cost—about $24 billion—that killed it, in part. Republicans and moderate Democrats are resistant to shelling to out any more money for healthcare. This message rang like a loud gong in my ear while I was in Washington, D.C. earlier this month for AHCA's congressional briefing. Visiting some of the lawmakers on the Hill, their frustration with healthcare reform and spending on entitlement programs was palpable.

Rep. Jim Marshall (D-GA) was not shy about his dislike of healthcare reform: “We screwed up healthcare reform,” he told two members of the Georgia delegation. “We really blew it.”

He was not optimistic about his support for any future healthcare expenditures.

“We're going to cut this off at some point,” he said. “It's not whether; it's when.”

Paying for an increase in the FMAP and other healthcare spending would be fine if we can pay for it, he said. He suggested that the long-term care field find a “pay for” to offset the cost of the FMAP bill.

“We're just passing this off on the next generation,” he said. “We are being very selfish.”   

Funding emergency

That's one point of view. Meanwhile, governors and nursing homes have pleaded with Congress to pass a six-month extension of the FMAP, which is set to expire at the end of the year. AHCA talked almost exclusively about this issue to members at its congressional briefing earlier this month. State budgets are in bad shape. In response, states are trimming outlays for Medicaid and other programs.

The situation doesn't look like it will improve any time soon. Spending in fiscal year 2011 is expected to be $52 billion lower than fiscal 2008, a report from the National Governors Association and the National Association of State Budget Officers found. Twenty-eight states have proposed reducing Medicaid payments to healthcare providers in fiscal year 2011.

Well, perhaps we'll see more progress by the time the RV tour ends at its annual conference. Still, that will only be October. FMAP funds don't run out until the end of December. As far as Congress is concerned, that's a long distance off.