Patrick McCormick

As residents and staff depart in unprecedented numbers in the wake of the COVID-19 pandemic, the flow of emergency federal funding has been a lifeline for skilled nursing facilities. But while many operators can expect a few more stimulus dollars to flow their way, that spigot will soon be turned off.

Even with stimulus money, only one-quarter of nursing homes are confident they can last another year at current revenue levels, according to an American Health Care Association (AHCA) and National Center for Assisted Living (NCAL) survey.  Clearly, owners can’t wait much longer for revenue to bounce back. However, they also can’t expect a return to business as usual anytime soon.

But savvy, creative operators who are willing to rethink, reallocate and reconfigure can forge opportunity out of this looming crisis.

Some steps to accomplish this include: 

Convert to private rooms. The industry already was headed toward exclusively private rooms; the pandemic merely accelerated the journey. With patient census down, converting to private rooms isn’t the sacrifice it might have once been. For some operators, accomplishing this is merely a matter of de-licensing excess beds. For others, it may require capital investment to reconfigure spaces. Either way, single occupancy rooms may be the minimum expectation for potential residents and their families. 

Create resident neighborhoods. In this germ-phobic world, nobody wants Mom to have a roommate. At the same time, nobody wants Mom to be isolated. Those heart-wrenching pandemic photos of distraught family members and locked-down residents peering at each other through glass windows created a lasting impression, one that operators must work to overcome – while still emphasizing resident safety. 

Jim Stradiot

One way to do that is to create “neighborhoods” within a facility. Instead of 100 people gathering in a single dining room, or having everyone exercise in the same space, turn a wing or a floor into a ‘’neighborhood” and turn some resident rooms or smaller common areas into a place where a dozen or so residents can dine together. This reduces potential germ exposure while still allowing residents to interact.

Re-examine contracts. If your resident volume is down, but you’re still paying dietary, maintenance and other contractors at pre-pandemic rates, it may be time to re-negotiate. Or you may discover you can save money by bringing a couple of those services in-house. 

Make sure you get paid. It sounds basic, but we’ve seen providers so delighted to welcome a new resident that they neglect to determine whether and how they are going to be reimbursed for that resident’s care. It may take designating a dedicated staff member or training all staff to investigate potential reimbursement sources, including Medicaid pendings, but either way, it’s worth it. The only thing worse for the bottom line than an empty bed is a bed filled by a resident who is receiving care, food and therapy that you’re not getting paid for. It happens more often than one might think.

Reward staff. Hiring good people has never been more difficult, and it’s much easier to retain staff than attract new workers. Increasing pay is the most obvious means to accomplish that, and more than 45% of executives told a recent Hospital & Healthcare Compensation Service survey they had done that over the past year; more than 79% said they had provided incentives like hero or hazard pay. 

Still, pay increases aren’t an option for everyone. But there are creative ways to make employees feel valued and foster loyalty. Is childcare an issue for some staff? Transform some now-unused space into day care. For others, finding reliable transportation may be difficult. So put the facility vans that are probably sitting idle to work by picking staff up and taking them home. 

Offer adult day care. Even families who are reluctant to choose full-time residency for a loved one can use a break now and then. Again, put space that’s no longer used to work as an area where seniors can gather during the day. Daytime staffing typically isn’t as difficult as for overnight shifts. What’s more, when daytime guests are ready for full-time residency, the transition is easier.

Provide long-haul COVID care. Many issues, including insurance reimbursement, remain to be worked out, but this increasingly common diagnosis could become a revenue source as older patients recover enough to leave the hospital. The lingering COVID symptoms make it impossible for these people to care for themselves at home. Again, a sudden surplus of unused space could be reallocated to meet this need.

Explore Institutional Special Needs Plans (I-SNPs). A small but growing number of facilities are taking advantage of these plans. For qualifying facilities and residents, I-SNPs operate like mini managed-care plans, providing individualized, comprehensive care for patients. The care provider assumes the insurance risk but gains additional revenue streams. Built into I-SNPs are incentives to keep residents out of the hospital, which benefits everyone. 

For skilled nursing facilities, operating as if the pandemic never happened isn’t going cut it. Exploring new revenue sources and being open to changing operations now is imperative.

Patrick McCormick, CPA, is a partner in Plante Moran’s senior care and living practice. 

Jim Stradiot, CPA, is senior manager for senior care & living, strategy & operations at Plante Moran.

The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.