Solid suggestions

By ANNEMARIE SCHUETZ
Posted 7/28/20

MONTICELLO, NY — The July 23 Executive Committee meeting showed a Sullivan County Legislature that, while it might like to say it works together, clearly doesn’t. It did, however, hear a …

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Solid suggestions

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MONTICELLO, NY — The July 23 Executive Committee meeting showed a Sullivan County Legislature that, while it might like to say it works together, clearly doesn’t. It did, however, hear a presentation that outlined potential changes that could improve the finances of the Care Center at Sunset Lake.

Chris McCarthy and Michelle O’Reilly, from accounting firm PKF O’Connor Davies, suggested areas to target that would improve the finances of the center. 

There were changes that a for-profit would make to save money that could be duplicated by a county-owned home, they said. But the discussion underscored how complicated it is for skilled nursing facilities in general to stay solvent.

Here are some of the recommendations: 

Improve occupancy. Skilled nursing facilities typically have 90-92 percent occupancy; the care center had 81 percent in 2019. Low occupancy, McCarthy said, is “a drain on the revenue side... but you still have a lot of the costs” to pay. Fewer patients equals less revenue.

Increase numbers of Medicare-funded patients. Rehab generates income for skilled nursing facilities; the patients cycle in and out, and “Medicare rates are the highest rates in New York State,” McCarthy said. Of those rates, Medicare Part A pays the best. Typically, a skilled nursing facility would have 10 to 15 percent of patients funded by Part A; at the care center, it was seven to eight percent.

Address Medicaid. McCarthy said the Medicaid program pays $184 per patient per day, “almost $300 less” than Medicare. In a typical skilled nursing facility, 55 percent of patients receive Medicaid; at the care center, 80 to 85 percent do. According to the Census Bureau, 19 percent of county residents are 65 or older. Censusreporter.org records an 11 percent senior poverty rate here. The care center also looks after the county’s disabled, who often receive Medicaid.

Watch the case-mix. Nursing homes care for people with different needs; some require lots of care, others don’t. Often those who don’t need much care get reimbursed at a higher rate, while people with dementia (very high-need) get reimbursed at lower rates. (McCarthy pointed out that Medicaid only pays $8 more for a dementia patient.) To make your nursing home viable, you need more of the high-reimbursed, low-care folks than the high-need, low-paying patients. This is based on 2007 numbers with no inflation factor included, McCarthy said.

Documentation is key. MaCarthy said, when it comes to the semiannual case-mix review, staff need to be sure they are documenting and capturing everything. The county’s case-mix numbers are 10 points lower than other county-owned facilities and 25 points lower than for-profits. Each point translates into about $44,000 in revenue.

Enhance valuable programs like adult day care. These need to be better utilized, he said. Utilization was “in the 30-percent range. That’s an extremely important program for the community.” 

Look at levels of care. “I’m talking all departments,” McCarthy said. A for-profit would look hard at economies of scale and ask the question: “Are we understaffed, overstaffed?” There isn’t an industry standard since facilities handle different types of patients. “It depends on your case-mix,” McCarthy said.

“These are all issues that you can certainly address,” he said. Look at the different elements, evaluate them, “and that allows you to start to say, ‘How do we turn this ship around?’

“Can facilities turn themselves around?” McCarthy asked. “Absolutely.” But he cautioned that sometimes places were sold too.

Click here for a full report of the Sullivan County Executive Committee meeting.

Click here for an indepth interview with county manager Josh Potosek.

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