Skilled nursing operators are able to mine more opportunities from the Patient Driven Payment Model than they may realize, a new analytical report from CliftonLarsonAllen found.
Most concerning has been the largest annual decline in cash flow ever observed, researchers said. “There’s a lot of distraction, a lot of disruption that’s impacting skilled nursing operators. We don’t want to minimize that, but we also don’t want organizations to take their eye off the ball,” Cory Rutledge, principal and head of CliftonLarsonAllen’s senior living practice, told McKnight’s Long-Term Care News.
Several important trends emerged from CLA’s 35th annual “Skilled Nursing Facility Cost Comparison and Industry Trends” report, which was released Oct. 15.
By not stressing the importance of PDPM, operators could miss out on clinical and coding opportunities for appropriate reimbursement.
“To state it plainly, operators cannot afford to leave PDPM reimbursement on the table,” the report warned.
The 34-page analysis revealed that operating margins for SNFs hovered around zero for the third year in a row, meaning that roughly half of U.S. facilities are not operating at a profitable level; it also calls their viability into question.
And the report found a significant decline in earnings before interest, depreciation, and amortization (EBIDA), which provides a rough measurement of cash-flow for skilled nursing operators.
“That metric has been declining year-over-year, but this year it’s been the largest single-year decline that we’ve seen in the industry. It went from 10% to 9.4%, so a 60 basis point decrease, which is pretty substantial,” Rutledge said.
From the November 2020 Issue of McKnight's Long-Term Care News
