When Oregon-based Avamere Living picked up four properties in a Sabra Health Care REIT shuffling announced late last year, a therapy implication might not have been immediately clear.
The four Washington state facilities had previously been leased to North American Health Care, which operated them with an in-house therapy model. Nine months later, Avamere has decided to embark on a journey to bring all of its therapy back in house.
Avamere’s 34 facilities will convert to having their own staff therapists by the end of the year in a move meant to improve operational control and patient outcomes, President Carl Tabor (pictured) told McKnight’s Long-Term Care News.
“Really, initially for me, it wasn’t a financial play. It was a quality play,” Tabor said. “If I switch, will I get greater patient satisfaction? Will I get greater provider and payer satisfaction, because then I’ll have more of an ability to individualize and oversee, maybe, a plan of treatment?”
“So first of all, it was a quality-driven decision for me. And then, as we started to really explore it further, we saw that there is some potential financial upside. For me, it doesn’t matter whether or not I gain profitability by eliminating a contract rehab company.”
The shift bucks recent trends, especially following the adoption of the Patient Driven Payment Model and the COVID pandemic, which reduced how much therapy was delivered to residents and, frequently, how it was being delivered.
Tabor acknowledged he’s going against the grain but said he’d be satisfied with a break-even approach, although his modeling shows better results than that. He expects better therapy results will ultimately lead to more specialization, better results and increased referrals.
High stakes move
Avamere, with locations in Oregon and Washington, has a high share of short-stay Medicare patients, and both states it operates in have a high concentration of seniors on Medicare Advantage plans. In this case, that can pay off because those organizations increasingly want providers to take on risk and meet high clinical and patient satisfaction standards for bonus pay. Therapy is a risk component Tabor feels he can better manage with an in-house system of internal staff and regional supervisors.
The team started to consider the concept more fully after Avamere picked up a fifth new building in Port Orchard, WA. It had contract therapy but through a different provider than the rest of Avamere’s facilities. The discussion about the changeover led to a bigger discussion about future goals.
“There are some current macro forces at play that are really prompting a lot of operators to really look at their in-house programs,” said President of Rehabilitation JoLynn Munro. “I think it comes down to things like the financial pressures a lot of our skilled nursing operators are facing. Rehab is no longer a revenue-driver as it was before. And I think the stakes are really high.”
The consistency of in-house assignments also could help attract and keep more highly qualified therapists, Tabor and Munro noted. Avamere is starting its conversion by offering its existing contract therapist, provided by an Avamere-affiliated company, jobs under the SNF arm.
“I think being perceived as part of a team in their skilled nursing facility is really attractive to therapists,” said Munro.
And Avamere wants to make the most of their willingness to be part of the interdisciplinary team. Tabor expects rounding therapists could help bulk up Part B therapy for long-term Medicaid patients who experience a subtle change in condition that might not have been seen as regularly under a contract model.
“We will see greater productivity out of the therapist,” Tabor said. “We will see greater Part B utilization, which to me means that patients who have therapy needs are being seen more frequently. We see higher case-mix index scores because therapists are in treating patients that, maybe traditionally on Medicaid, they’re not being seen as frequently because of a cost structure. So I’ve eliminated the additional cost of the management company.”
Treating changes sooner also could also decrease hospitalizations and improve quality of life because now the patients if it promotes independence, mobility or cognition.
“That’s the quality that I want to have Avamere be known for,” Tabor said.
Rehab regains influence
On the Medicare side, Tabor expects a therapy program with better oversight could drive down length of stay, which would attract something that managed care payers want, as long as rehospitalizations also stay low.
And the ability to hire therapists with specific skill sets for certain buildings, or encourage additional certifications in support of a speciality program, is also attractive to company leaders who right now see themselves as “generalists.”
“This gives us the ability to have magnet facilities where we could say that not only do we do traditional rehab, but we also have greater expertise in wound care, etc.,” Tabor said. “Building greater expertise in pain management in this building or greater expertise in cardiac, whatever it might be. This does allow us to have a vision of specialization and the ability to recruit, whereas a contract company may be more limited and challenged to do that.”
To start the conversion, Avamere hired Munro, who also previously worked for the affiliated therapy provider. Avamere also has started onboarding recruiters and setting up payroll for the therapists who will now come under Avamere control. The switchover will occur in three rounds, with the last of buildings converted by December.
Meanwhile, amid this major undertaking, the company continues to look for additional opportunities to grow and promote its new approach to therapy.
“I want to take good buildings to great buildings,” Tabor said, emphasizing his ongoing interest in operations along the Northwest’s I-5 corridor. “I’ve probably looked at somewhere between 25 and 30 facilities over the last year and chose five, so I’m being selective. No growth for growth’s sake.”
