Data that puts operations and expenses in perspective is more critical than ever, with skilled nursing providers facing more competition for both patients and workers.

That was a key message Wednesday during a webinar on skilled nursing trends hosted by accounting and tax consultant CliftonLarsonAllen. Extreme staffing needs and conflicts over contract workers have only heightened the stakes, said presenter Stephen Taylor, CPA, a principal with CLA’s healthcare group. 

“(H)aving a lot of different ways to slice information puts a lot of folks in our industry more in the driver’s seat instead of a little bit of a reactionary environment,” ne noted.

No longer can providers work blindly toward the goal of recapturing 1% of occupancy a month, he said. Some of those gains may be coming with added costs, or may attract an unbalanced payer mix.

For success in today’s more competitive market, providers should look for insights within their own data, as well as when comparing it to that of local peers and the best operators in their states, he advised.

Pay rule opportunity

CLA Principal Deb Emerson said providers need to consider four elements in their data analysis: occupancy, revenue optimization, staffing and expense efficiency. She said the recently announced final Medicare pay rule, and its better-than-expected reimbursement, presents providers with an opportunity to reassess position before the full weight of Patient Driven Payment Model cuts hit. 

“When we think about that definition of opportunity, we’re not only looking at opportunity from a financial perspective,” Emerson said. “We’re looking at it from a market share perspective. We’re looking at where are you spending dollars. And it’s not just about looking at your facility but looking at how you compare to your peer group… and looking at areas such as the clinical opportunity.”

CLA provides analysis with Medicare cost report data, Payroll-Based Journal stats, and other data the Centers for Medicare & Medicaid Services uses to calculate its nursing home quality ratings. Having a broad spectrum of numbers, and being able to compare them locally, regionally and nationally, may reveal where providers are overspending or over-investing in efforts that aren’t paying off.

CLA has been providing insights nationally during the pandemic and the staffing shortage; the consultant ran the numbers behind several American Health Care Association reports outlining threats to the long-term care sector.

Emerson said it was important for nursing home operators to understand if, and how well the extra dollars they were spending to staff up and stay open are delivering patients, and whether they’re drawing the same, high-acuity patients as their competitors. Diagnosis codes and rehab needs could indicate that.

Get what you have coming

Another aspect to consider is whether similar competitors are getting far more, better-paying Medicare Fee-For-Service referrals. If so, a provider might need to take a look at its clinical capabilities and to reset its payer mix. Hospitals may be more likely to send lower-acuity patients or those transitioning from Medicare to Medicaid to facilities they see as less equipped to handle complex needs, Emerson noted.

She said many providers continue to miss opportunities to capture and code speech disorders and mechanically altered diets, services for which PDPM offers additional reimbursement. It’s smart for a provider to compare their rates for those diagnoses against others in their market and nationally. 

In addition to spotting opportunities, such reviews can also highlight potential overdiagnosing and audit risks.

Emerson added that such insights are becoming more important as many states begin transitioning their Medicaid payment programs to a case-mix system based on the Patient Driven Payment Model’s nursing and non-ancillary service components.

Capturing more diagnoses accurately and shifting revenue upward based on documentation, as well as staffing appropriately for the patient mix and reviewing therapy contracts and provision, could improve a provider’s “contribution margin,” she noted.

“Digging into the various components to really be able to isolate and identify, what is it that‘s the driving the margin?’” Emerson said, noting that the first round of PDPM reductions would further eat into margins. Providers need to be able to adjust as Medicare payments decline, she added.