The cost savings from the Patient Driven Payment Model have “pretty much gone away” following the onset of the coronavirus pandemic, Sabra Health Care REIT CEO Rick Matros revealed Thursday. 

Matros noted that many of the cost savings for SNF providers had to do with group and concurrent therapy. But with new federal mandates in response to COVID-19, many activities are now being done on a “one-on-one basis.” 

Rick Matros
Rick Matros

“Those cost savings — while they will come back post-pandemic — currently do not exist,” Matros added. 

However, Matros remained upbeat about the new reimbursement system, saying the sector is “much better off” with PDPM in place as opposed to Resource Utilization Groups (RUGs). 

“RUGs incentivized operators to admit short-term rehab patients only. Since we’ve had PDPM in place, we’ve expanded the kinds of patients that are admitted to the facilities to include a lot of nursing conditions, more complex nursing care and that is helping us [put our portfolio] in a stronger position going into the pandemic,” Matros explained. 

The benefits from PDPM have also allowed its skilled/mix occupancy, despite a drop in skilled nursing/transitional care occupancy, during the pandemic, 

The California-based real estate investment trust reported that its skilled nursing/transitional care occupancy declined 460 basis points since February. However, its skilled mix occupancy is “slightly higher” during the same time frame.

“We are cautiously optimistic, however, because our census decline is slowing in skilled nursing,” Matros said. 

The company reported that it currently has 80 facilities with positive COVID-19 patients and residents. Operators have been treating every patient and resident as if they have COVID-19, which is in accordance with federal guidelines, and admissions have stopped at facilities that have had large outbreaks. 

“If there hasn’t been a large outbreak, and working in conjunction with the Department of Health and Human Services, most of our facilities are still admitting [residents] — particularly if they’ve got the capacity to isolate and quarantine new admissions when they come in,” Matros said. 

Diversicare: Industry could see 11% decline in occupancy due to COVID-19

The skilled nursing industry could see an 11% drop in occupancy in response to the coronavirus pandemic, according to Diversicare Healthcare Services President and CEO Jay McKnight. The company itself saw its census decline by 1.7% by the end of March and by almost 7% through April. 

Diversicare President & CEO Jay McKnight

“It’s difficult to get a firm number for the industry as a whole but anecdotal information is indicating an 11% decline in census across skilled nursing facilities from the end of January through April,” McKnight said during a first quarter earnings call late Thursday afternoon. 

“We expect to see a slow rebuilding of our census as the spread of the virus stabilizes, but it’s not possible for us to predict when our patients-served will return to the levels we previously experienced,” he added. 

The company reported that 72 patients have died from COVID-19, and 15 of its 62 centers have or are currently treating coronavirus patients. Diversicare has also tested more than 2,000 of its residents and staff members. Of those tests, 25% have tested positive — with nearly 50% of them being asymptomatic. 

“The ability to test everyone in our centers, we believe, will be key to properly cohorting or grouping our positive and negative patients and staff to minimize the spread. Without tests to identify our asymptomatic carriers, even the best infection control procedures are fighting a losing battle to stop the spread,” McKnight said. 

Diversicare also reported that its net loss for continuing operations was $0.5 million for the first quarter of 2020, compared to a $1.6 million net loss in the first quarter of 2019. 

McKnight said despite the impact of COVID-19, the “results for the quarter are the best that we have reported for some time,” citing increased Medicare and Medicaid reimbursements and improvements to its cost structure.