SNF Survey Stress

SNF Survey Stress



SNF Survey Stress


Hey everyone, how are you. Welcome back.

So last week I was scrolling through my news feed.

Looking through whatever happens in the news that day, and I pass by the terrible, unfortunate incident that happened at Virginia Beach on Friday, where there was a shooting.

12 people were killed, others were injured, and the whole community is mourning.

It’s a really terrible story, but what I’m embarrassed to say is that I found my self beginning to scroll past the story, and then I caught myself..

How can I pass by a story that’s so devastating like this, and so many people are terribly hurt, and so many families are mourning, and I’m just gonna scroll past it?

And it hit me that I’m not even sure what I’m sadder about, the fact that this terrible incident happened, or the fact that us all over are inundated with so much of these terrible stories happening one after another after another.

That we’re kind of sadly numb to it, and it doesn’t even catch our attention anymore that I was just gonna scroll right past it.

So firstly, our thoughts and prayers are with the Virginia Beach community, the victims and family members.

But what I want to talk about is a recognition in the health care community.

That this is something that is traumatic, and something that you’re seeing more and more victims or patients that are suffering from this trauma, induced by such events like this.

And because of that CMS is putting into place in November of this upcoming year, new regulations that everyone should be aware of that are going to address to make sure that patients who may have had traumatic events in their life, may be suffering from PTSD or something similar, will be monitored and there’ll be steps put in place to make sure that they don’t trigger another traumatic event to happen to them at any point.

So to add to this trauma, now administrators are gonna start getting traumatized by the fact that they need to stress out before survey to make sure they have the right care plans in place, the right policy in place, to identify people that may be prone to something like this, or be subject to getting into another event that they couldn’t have caught.

So, for all the administrators out there, make that you understand about what these requirements are in order not to get this F tag at survey.

And for us as a company, it’s interesting to us because it’s kind of a way we’re seeing a link between skilled nursing post-acute care providers, behavioral health, and even substance abuse treatment which are all areas which LTC contracting services.

And the reason why that’s happening is because very often, people that do suffer from these traumatic events and have PTSD, do suffer from behavioral or mental health issues as well as turning to substance abuse, and therefore need the substance abuse treatment.

So, we’re seeing a lot of policies and requirements that are similar for each of these provider types, but for you administrators out there, make sure that it’s early enough before November.

Make sure you’re prepared, and make sure you know what needs to be in place so you don’t suffer from any traumatic events by your survey.

But if you do, hopefully your staff will put a care plan in place to make sure it never happens again.

Thank you so much for watching and I hope you have a great week, take care.

Foresight is 2020

Foresight is 2020



Foresight is 2020

Ok, who is ready to play a game? Are you ready? Here we go! It’s going to move quick so hold on tight.

We’re going to show you pictures. I’m going to show you picture after picture after picture and you have to choose if they fall under Category A or Category B.

Pretty simple, right?

Category A and Category B are as follows.

Category A are things that are primarily health related. That means they have a lot to do with your health.

Category B are things that improve health or functions, so they have to do with health but they’re not primarily health related.

So, again, A has a lot to do with health and B, eh, not so much.

Ok? We’re going to do this quick like a lightning round. I’m going to show you the picture and you’re going to choose A or B. Here we go!

The first picture is adult daycares. A or B? It’s A, good!

Companionship: someone that needs help so they’re not lonely or getting depressed. B, good!

A grab bar: when someone’s in the shower and they don’t want to fall down or they need help getting up. A, good!

Next, shampooing your carpets if someone has asthma and they can’t breathe and this will help them breathe better. A or B? B, very good!

How about transportation like Uber Health? Transportation to a medical visit. A.

How about the next one? Transportation not for medical needs? B. I see you’re catching on.

You’re doing well. One more!

Pest control? A or B? If you answered B you got it right.

Now, let’s show you all of your choices. Here are the “A’s” and here are the “B’s.”

Why in the world am I telling you this? First of all, so you can see that you’re good at this game. We should play this more often!

But also because there’s a very big difference between Category A and Category B.

Category A is what CMS told insurance companies they can roll out for 2019 as benefits to their premium paying members.

Category B are new benefits that CMS said can be rolled out by insurers for their membership in 2020.

So, this is going to be another thing we’re going to see changing in 2020, is that they loosened the shackles, they loosened the terms of what should be included by insurers.

So, as the competition gets greater, and as the market gets more interesting, you’re going to see insurers offering more Category B stuff.

These are just some of the examples, they can really choose anything that improves health or function. Let’s see what happens and thanks for playing! See you next time.

CMS and Seema

CMS and Seema



Hey everyone and welcome back!

I want to talk to you about something that is going on now that is so impressive: we have a government-pending shutdown.

Is it going to shut down? Is it not?

Is it going to stay open? We don’t know.

But that’s why it’s so impressive when you have a bipartisan backing on something going to The White House.

Everybody agrees to this. Yes, everybody is agreeing to the concepts that were put forth by CMS in December of this past year by Seema Verma.

The suggestion was to expand Medicare Advantage plans and push forward for value-based insurance design as much as possible.

Value-based insurance design, as we’ve discussed in the past, is something that’ll keep the cost down for the membership and the insurer by making sure that the value is at the highest level possible for the care that is provided.

So, I just want to point out to you all, that we will see a big expansion from the insurance companies on Medicare Advantage and of course, more membership on Medicare Advantage plans.

You probably already knew this because you saw our preview 2019 video where we discussed this would be coming down the pipe.

So, yes, this is something that was suggested by Seema Verma and, by the way, Seema, what does a guy have to do to get connected with somebody on LinkedIn?

I put the request out there, I keep trying to get connected. Seema, do you see me?

Another thing that I want to point out, back to business, is Any Willing Provider.

This is something that is in certain areas of the marketplace where, if you’re a willing provider and you want to participate with a certain health plan you are able to.

They are also suggesting that this gets scaled back because it is putting the insurers a little bit in a corner.

By making them have to bring providers in network, that takes away their leverage. Therefore, in order to keep their cost down, they end up charging the membership more money, which nobody likes.

So, they did put in a suggestion regarding the Any Willing Provider to try to scale that back down. But, remember, for the Medicare Advantage plans, yes, you probably will see a big expansion of that.

So, while the government is deciding if they should shut down or not, you just make sure that your business doesn’t shut down. That’s what you’ve got to do and they’ll handle that part.

If you have any questions, comments, or suggestions, please let us know so that we can make this better for you.

A Steal or a Bad Deal? 5 Pitfalls to Avoid in Skilled Nursing Facility Acquisitions

A Steal or a Bad Deal? 5 Pitfalls to Avoid in Skilled Nursing Facility Acquisitions

By Steve Zicherman, CPA
Managing Partner, LTC Finance and Advisory Services

Consider this scenario: A skilled nursing facility (SNF) is on the market, and you’re interested. If you’re a seasoned nursing home administrator ready to move into an ownership role, a successful SNF owner interested in expanding your portfolio, or an entrepreneur seeking investment opportunities, you’ve taken steps to minimize the risk. After a careful review of the historical financials and some number-crunching, you’re certain that with diligent attention to increasing the census and cutting expenses, you can project a healthy profit in year one. So now it’s time to trust your intuition and move quickly to capitalize on the opportunity, right?

Not so fast. After more than a decade on the front lines of SNF acquisitions, we’ve learned why some acquisitions succeed while others struggle to realize their goals. Here are some key points:

  1. Numbers don’t lie?

Those historical financials paint a pretty picture of a nice little “fixer upper” that just needs some TLC. Sure, the margins have tended to be slim, but with some decent marketing and ancillary contract trimming, this facility has real potential.

Or does it? Don’t let the numbers they provide be the only story you see. Unfortunately, there’s plenty of creative accounting in SNF operations that can mask or minimize significant issues. Add a few strategic management or corporate allocations here and there, and a money pit looks like a reasonably manageable turnaround candidate with great prospects. It will take robust, skeptical due diligence during the underwriting process to break through the façade and reveal the truth.

  1. Projections: Live with them, don’t die by them.

In pursuit of lower rates on those critical terms and A/R loans, ambitious plans to slash expenses in the first year will certainly impress lenders. But you can count on unexpected challenges, and daily operations will almost certainly be a distraction from your turnaround strategy.

Don’t get tripped up! Setting projections that will make the bank happy while still being practical and achievable is an art form. Close coordination with your mergers and acquisitions advisor before closing can help you set realistic covenants and ratios, and it can also assist you in negotiating terms that will satisfy all parties and ensure uninterrupted cash flow.

  1. Got the loans! Great—but that’s not enough.

Planning for your strong A/R line of credit to cover your startup costs? Even the most generous lenders don’t want to be on the hook for more than 60 to 75 percent of total A/R, after factoring in collectability and advance rates. It’s easy to overestimate the collectability of your receivables, and your projected profitability may be months out. Are you ready to meet the shortfall?

Bottom line: A realistic cash flow projection will help ensure smooth operations until revenue stabilizes.

  1. I know! I can work with the vendors…

Maybe you’ll find some breathing room on the AP side. But remember—you’re the new kid. Your track record isn’t established yet, and your leverage is limited. Squeeze vendors too hard and they’ll terminate, leaving operations in turmoil and investors heading for the exits. That’s a recipe for disaster.

Strike the right balance. Your advisor can provide realistic strategies for astute management of AP, and tough negotiations with suppliers can deliver significant results if handled with care.

  1. Cut staffing for sure-fire savings?

The payroll looks pretty bloated on paper. It’s a classic strategy: cut your way to profitability. Trim some nursing positions here, pay a few department heads less there, get rid of deadwood—and bingo, hundreds of thousands in savings. Works every time, right?

Actually, there are many obstacles to this approach. This is a people business, and that overpaid supervisor who’s been here forever could be the heart and soul of the operation. New ownership makes everyone nervous, and if morale crashes, hundreds of disgruntled employees may suddenly decide to shop their resumes around. There are plenty of opportunities in the current highly competitive labor market, and new minimum wage rates in many states will make new hires significantly more expensive. Good luck replacing them without significant onboarding and incentive costs. And what will high turnover do to your facility’s reputation?

What’s more—this is a highly regulated industry. State-mandated staffing ratios need to be maintained if you want to survive past the first survey. Star ratings, Medicaid reimbursement, and simple resident satisfaction are all directly related to both staffing ratios and costs.

There are savings to be had, but cuts must be made with a razor, not an ax. An accurate staffing analysis can provide a cost-effective solution to optimum staffing.

Bottom line:

There are great acquisition opportunities out there, ready to outperform under good management. Making sure you get one of them is a challenge, and an experienced M&A team on your side can make all the difference.

Happy New Year from LTC Consulting Services!

Happy New Year from LTC Consulting Services!




2018 was a whirlwind of a year.

There was so much going on and we helped so many clients this year that the memories are just amazing.

We’ve had clients that have been just spinning their wheels without making any headway at all.

And then there were some who found themselves stuck in a hole and they needed our help to get pulled out.

Would you try winging it on your own? Or attempt getting away cheap?

This year, don’t settle for mediocrity. Rather, trust the pros at LTC.

Centers for Medicare & Medicaid Services to Cut Payments to Skilled Nursing Facilities

Centers for Medicare & Medicaid Services to Cut Payments to Skilled Nursing Facilities

The Protecting Access to Medicare Act of 2014 established a Value-Based Purchasing (VBP) Program for skilled nursing facilities (SNFs). SNFs were required to start reporting hospital readmission rates and other performance data to the Centers for Medicare & Medicaid Services (CMS) in October 2017. CMS is rewarding or penalizing nursing facilities based on this data, which has resulted in payment cuts in a majority of cases.

What Is the Skilled Nursing Facility Value-Based Purchasing Program?

The purpose of the SNF VBP Program is to focus on rewarding nursing facilities that offer better care to patients with Medicare. Here’s how it works:

  • SNFs are evaluated for unnecessary hospital readmissions within 30 days of a patient’s discharge
  • SNFs receive an individual performance score and a comparison performance score based on how other SNFs in the country perform
  • SNFs receive confidential quarterly and annual reports disclosing their performance scores
  • SNFs receive reimbursement incentives or penalties according to their performance scores

By focusing on reducing unnecessary readmissions, CMS has moved toward incentivizing the quality, rather than the quantity, of care that SNFs deliver. This is critical when you consider data cited by The Hospitalist. In 2010, 23.5 percent of patients who were discharged from the hospital to a nursing facility were readmitted to the hospital within 30 days, costing over $10,000 per admission or $4.34 billion per year. Astoundingly, 78 percent of these readmissions were considered avoidable.

Results of the VBP Program’s First Year

Since the penalties and rewards of the VBP Program are divvied out once per year, and the program started one year ago, the results are now in.

First, under the VBP Program, SNFs automatically lose 2 percent of their Medicare reimbursements, which they can earn back by reducing their hospital readmission rates. 60 percent of the withheld funds will be redistributed to the top-performing SNFs as bonuses.

According to Skilled Nursing News, 73 percent of SNFs were unable to earn their Medicare reimbursements back by keeping readmissions below a certain threshold. This means that nearly 11,000 of the 15,000 facilities that reported sufficient data are being penalized.

CMS used a formula to rank the nation’s nursing homes and determine each one’s incentive payment multiplier. The 73 percent of NSFs with a multiplier of less than 1.0 will receive reduced Medicare payments. Consider these examples:

  • A multiplier of 0.98 or less results in a payment reduction of 2 percent (meaning CMS withholds 2 percent and rewards a 0 percent incentive payback)
  • A multiplier of 0.99 results in a payment reduction of 1 percent (meaning CMS withholds 2 percent and rewards a 1 percent incentive payback)

The remaining 27 percent of SNFs with a multiplier of 1.0 or above will not be penalized or will receive a bonus payment from CMS. For instance:

  • A multiplier of 1.0 results in a payment reduction of 0 percent (meaning CMS withholds 2 percent and rewards a 2 percent incentive payback)
  • A multiplier of 1.01 results in a payment increase of 1 percent (meaning CMS withholds 2 percent and rewards a 3 percent incentive payback)

The highest multipliers awarded by CMS were around 1.016, earned by the 440 top-ranked facilities in the country. The lowest multipliers were about 0.98.

Get Help Figuring Out Your Finances

If your facility is among the 73 percent of SNFs affected by the Medicare payment cuts, LTC can help you figure out your finances and keep your facility running smoothly. We’re accustomed to pivoting and adapting as the healthcare industry changes, and we help our clients do the same.

To learn more about LTC and our financial advisory services, please contact us today.

The New Medicare Advantage – Coming 2019 to an Insurance Broker Near You

The New Medicare Advantage – Coming 2019 to an Insurance Broker Near You




In a world of well intended plans, there is one plan that stands out. It’s called Medicare Advantage, with one company pushing the limits even further.

Imagine getting paid to walk. Well, there’s an insurance company paying out millions of dollars a year to people who meet walking goals.

Where skill used to be everything, or should I say skilled care, but now CMS raises the stakes.

The folks at Medicare got together and they’re scratching their heads and they’re like, “This doesn’t seem right. If our coverage is for primarily health-related care, we should be covering more nutritious food, transportation to health-related services, independent living, assisted living, adult daycare…Other health care settings are now considered for Medicare reimbursement.

A place where wellness programs fail. A new data rich Medicare Advantage is getting stronger by the day, enforcing individual healthy habits.

Get ready for more insurer-promoted healthy choices, like free gym membership for people that clearly do not need it.

Of course the most annoying are those people in exceptionally good shape at the gym. I’m always like, “What are you doing here? You’re done. What are you, rubbing it in? Luckily there’s always one or two people at the gym you look at and you’re like, “Don’t bother. You’re wasting your time. And then you realize it’s just your reflection in the mirror.”

The new Medicare Advantage coming in 2019 to an insurance broker near you.

What is CHOW?

What is CHOW?




Hey everyone, you remember Harold.

What’s up?

What’s up, Harold? I’m so happy to have you back here. Everybody’s been asking to have Harold back, so we got you back.

We’re not going to talk rapping today, we’re going to talk business. You want to talk some business?

Absolutely. What do you want to talk about?

I want to talk about CHOWS.


Yeah. Could we talk about that?


Do you know what CHOW means?

Um…a fine Chinese restaurant?

OK, in the healthcare realm, CHOW, does that mean anything to you?


Let me tell you, CHOW stands for change of ownership.

Stop right there. I’m sure it does.

No, you see how change, CHOW, change of ownership.

Shouldn’t that be COO? Or is that your title?

Oh, please.

Was that already taken?

Don’t start getting personal. Yeah, I guess COO would make sense.

Do they have a suggestion box? I could throw that in.

If they did, you should drop that in. I think that’s a good idea. But that’s what the industry calls it. When there’s a transaction going on and there’s a change of ownership, they’re going through a CHOW.

And what does that process entail?

It’s a very difficult process. It’s a lot of different pieces, mainly financial, that need to be done in order to make sure that every part of the transaction is set up for them to go live.

Interesting. How do most operators/owners maneuver through that process?

They usually would either choose to work with an attorney or they would actually try…


Yeah, why?

And they pay the attorney legal fees through the financial paperwork?

Yeah, it doesn’t really make sense because they actually don’t handle a lot of the financial stuff anyway. I don’t know why. Some of them would try to wing it on their own and see if they can make those deadlines….

Always trying to outsmart the system.

Yeah, I don’t know why people don’t realize there’s a solution out there.

Well, what do you suggest?

Well, you know at LTC we handle everything for a CHOW from A to Z.


Everything, yeah.


Yeah, licensure. Of course we handle that.

A to Z…Medicare/Medicaid Enrollment?


Managed Care Contracting?

You know that’s a big focus of ours, of course we do that.

Software setup?

Software setup.

Bank account structuring?

Bank account structuring. Come on, yeah. A to Z. I’m serious.

A to Z? What about the old AR that I inherit with my acquisition?

Do you know we have a team of specialists that focus on collecting outstanding AR and write offs when there was a change of ownership? Of course, this is something we’re very big about.

OK, time out. Is there anything you don’t handle? Is there a catch?

What don’t we handle? We don’t change carpets when they’re getting replaced.

I knew it! There’s a catch.

Long-Term Care Statistics You Need to Know in 2018

Long-Term Care Statistics You Need to Know in 2018

If you operate a nursing home or other long-term care facility in the United States, your primary concern is to care for your senior residents and their families. However, finances are the lifeline of your facility, so you need adequate revenue to pay the bills and still make a profit at the end of the day. Consider these long-term care statistics that relate to your business.

  • 52 percent of people—47 percent of men and 58 percent of women—who reach age 65 will need long-term care in their lifetime.
  • 10 percent of Americans over age 65 have Alzheimer’s disease. This increases to 33 percent among people ages 85 and older. Two-thirds of Americans with Alzheimer’s are women.
  • The average length of time spent in long-term care is two years (2.5 years for women and 1.5 years for men). Only 14 percent of people need long-term care for five years or more.
  • As the US population ages, the number of people needing long-term care is on the rise. As a result, long-term care expenditures skyrocketed from $30 billion in 2000 to $225 billion in 2015.
  • The median yearly cost for weekday adult day care is $18,200.
  • The median yearly cost for assisted living care is $45,000.
  • The median yearly cost for nursing home care is nearly $86,000 for a semi-private room and over $97,000 for a private room. These figures vary significantly by location. For instance, the average yearly cost for a private room in a nursing home in Monroe, LA is under $52,000, while in Manhattan, NY, it’s over $215,000.
  • The median household wealth for adults over age 65 with no disabilities is just over $263,000. As for those with physical or mental limitations, the median household wealth is $94,200.
  • Unpaid family members and friends provide 83 percent of all long-term care in America, and two-thirds of older adults rely exclusively on free care. The estimated economic value of this unpaid care is $470 billion per year.
  • 65 percent of unpaid long-term caregivers are female, and 25 percent of them are in the “sandwich generation,” meaning they provide care for their aging parents, as well as their children. Another 34 percent are over age 65 themselves.
  • Medicaid provides care for 62 percent of nursing home residents, which covers 51 percent of all long-term care costs. 20 percent of Medicaid’s total funding goes toward paying long-term care, which is expected to increase by 50 percent between 2016 and 2026.
  • In 2000, 125 insurers offered standalone long-term care insurance policies. As of 2014, fewer than 15 do. Also, only 20 percent of businesses with 10 employees or more offer long-term care policies to their workers. Still, the number of people with long-term care insurance has increased from 4.5 million in 2000 to 7.25 million in 2014.
  • 14 percent of long-term care applicants ages 50 to 59 are denied coverage due to health issues. 45 percent of applicants ages 70 to 79 are denied.

With mounting costs, an aging population, and an increasing need for quality, affordable long-term care, you may struggle to manage it all. LTC Consulting can help you cut costs and navigate Medicaid and Medicare reimbursements to boost company profits. With us in your corner, you can focus on providing the best possible care for your senior residents while we oversee every financial aspect with great care and accuracy.

To learn more about LTC Consulting’s health care management services, please contact us today.