Just a year after deciding not to renew 11 leases it held with Omega Healthcare Investors, Vivage Senior Living is moving forward with a merger it hopes will reinvigorate innovative programs across its skilled nursing footprint.
“We’ve always prided ourselves on providing a niche market,” Vivage CEO Jay Moskowitz told McKnight’s Long-Term Care News last week. “We’ve always developed by saying what is the need out there in the community, and how do we serve that? In giving those properties back [to Omega], as part of that process, we had to sit and ask ourselves, if we’re going to continue being that company that provides all those services, how do we do it now in this market?”
In early February, Vivage announced its solution. The company, which has its roots in a 2012 merger of two Colorado management firms, is looking to expand again through an alignment with Beecan Health. Both Vivage and California-based Beecan will bring 21 skilled properties to the merger. Together, they’ve formed a new entity with 42 skilled nursing facilities and nearly 3,600 licensed beds.
Vivage also brings an assisted living brand, a consulting arm and a talent firm to the mix. Beecan will continue to operate other skilled assets in California and New Mexico separately.
On its own, Vivage had often co-located different specialty skilled nursing centers to allocate resources and staff according to need. Under Omega, for example, the company operated three buildings on one block; one for dementia care, another with designated MS and neurological services and a third long-term care-focused building infused with Korean programming.
The company also has specialty ventilator, memory care, dialysis and behavioral health buildings and units. The goal now is to expand those specialties, and to bring them to new parts of the state.
“This gives us that ability to, as we have empty beds on the Beecan side, to talk to our hospital partners and say, what else are you seeing that you really need programs for?” said Heather Heather TerHark-Monreal, vice president of ancillary services at Vivage. “We haven’t been doing that because we’re kind of bed-locked in some of our communities. The merger will also give us the ability to serve more of Colorado.”
But continued evolution comes at an especially challenging time in Colorado, where providers took a 2% Medicaid cut in early 2020 that hasn’t been reversed during the course of the pandemic. Staffing shortages are among some of the toughest in the nation, with agency use still running high.
The plan is to use additional presence and capacity to boost occupancy, capture more market share and strengthen services in expectation that staffing and reimbursements pressures will ease somewhat with continued advocacy.
Cuts at ‘worst time in history’
Beecan has faced stiffer census declines than Vivage, which reported 89% occupancy of occupied beds last week.
But in those open beds, Moskowitz sees an opportunity to add value. He knows the benefit a specific slate of services can bring to hospital partners. For many years, Vivage outpaced state occupancy averages because of its niche programming.
But because the state’s licensing process monitors only Medicaid beds, many skilled companies have gone to building new, Medicare-only facilities.
Where Vivage used to be at 15% to 20% Medicare mix, that fell as insurers increasingly removed Medicaid buildings from their provider agreements, saying that patients wanted the high-end hospitality finishes and private rooms of newer facilities.
“We watched those Medicare numbers really shrink down as these freestanding Medicare only buildings popped up,” Moskowitz said. “Those contracts started drying up for us…. When you give the patient a choice, they clearly look at whether you’re 5 stars or not. But they truly love the Taj Mahals, they love their single rooms only, they love those high-end buildings.”
The state hasn’t responded to Medicaid providers who have beseeched officials to reconsider their permitting process. And the challenge got worse as COVID closed in.
“It’s unbelievable to think we actually got cut 2% during the worst time in the history of this profession,” Moskowitz said, noting that led to some 13 closures over the last two years.
That’s 13 times more than in preceding years, when the state might average one annual closure, said Moskowitz, a former president and present board member of the Colorado Health Care Association.
Colorado also was one of the most challenging states operationally early in the pandemic, with strict admissions stops after a single case long after facilities had adopted stringent new infection control protocols.
Moskowitz said Vivage is being underpaid $37.50 a day per Medicaid patient, with a state association estimate showing that providers are losing about $9 million a month.
Pre-COVID, Medicaid reimbursement averaged 90% of what providers spent. The 2020 reduction dropped that to about 85%. Lawmakers are now in final negotiation on efforts that would bring that back to the mid-90s for at least this year.
“We think we have a bill that will sail through and, July 1, we should see an increase that will at least get us rebased,” Moskowitz said. “We may have this conversation again a year from now, but at least there is some hope to get us stabilized, especially if we can find the staff. If we could find the staff today, our buildings, including the Beecan communities, we wouldn’t be full, but we’d definitely move our numbers substantially.”
Highly trained staff needed
A statewide assessment found nursing home labor costs went up by as much as 22% during the pandemic, depending on position. One placement firm Vivage works with told Moskowitz Colorado nursing homes are at this point using more agency staff than any other state.
Vivage created Viva Talent Solutions, essentially an internal float pool, as a response to agency dependence.
“The majority of people who work for agencies work there for a few reasons: One, because they want to get paid better, but also the flexibility of working when they want to work,” Moskowitz said. “So Viva Talent was our solution, a way of saying that we’d find those employees who wanted that flexibility and would work in the Vivage system, in our buildings, where their access code would work in building A, building B or building C, it makes no difference. They’d been trained on our procedures, so when they walked in the door, they’d understand our policies.”
An executive director and two employees screen calls from Vivage (and now Beecan) buildings to look at Viva first to fill open nursing and therapy slots, before resorting to agency.
“It’s helped a bit, but not enough,” Moskowitz added. “We’re doing a lot of emphasis now on hiring more recruiters and adding software that allows them to respond immediately when someone is looking for a job.”
Reliance on agency is especially problematic for providers like Vivage that bill themselves as specialists. Need-specific programs require staff with additional training and patients rely on consistent care.
Vivage opened the state’s first Green House Home and plans to launch another. But Moskowitz pointed to the concept’s universal workers, known as shahbazim. They provide all kinds of care for their residents, far beyond what a typical CNA would be expected to know or do.
Vivage is also planning to add dialysis care to more facilities, rising to meet a need that has been demonstrated by its own patients and by several hospitals in its new, expanded footprint. Still, dialysis requires more training and additional knowledge.
In addition, the company wants to rebuild or enhance programs for parolees, younger patients with dementia, people who have dementia with behaviors and other psychiatric conditions that can’t be addressed in assisted living or other settings. They require more psycho-social staff than nurses, including one-on-one sitters, which can be even tougher to find at a reasonable rate.
Neither the state’s small $7 daily add-on for behavioral programs nor the ongoing agency reliance will make that easy to achieve. Capturing more market share and increasing census with Beecan should help make that vision more practical.
“Opening new units or specialty programs with agency, it doesn’t make sense,” Moskowitz said. “With the Beecan merger, we’ll continue to specialize those programs throughout the state. … Our focus with Beecan in Colorado will be to keep growing and making sure that we capture as much of the market as possible and really focus on our staffing.”
