“We had federal surveyors walk in. We actually did fine. They found two deficiencies, both low in scope and severity. I had had [a survey] before so I knew what to expect. Those surveyors were much more intense and stressed than from the state. Ours are usually very supportive and educational, in order to spread best practices. The feds are out to get you. I’ve been doing this for 23 years, so I know what they’ll ask for. Immediately get out all the forms for them. Whenever you’re in that [eligible survey window], have that folder ready for them. That day went surprisingly well. We learned immediately who our [staff] superstars were.” — Derek Buckley, Chief Operating Officer, Attic Angel Association, Middleton, WI

“The excitement and knowing I was finally where I was supposed to be. Knowing I had made it — my first administrator position. I remember walking in and going, ‘Oh my God, I’m in charge.’ That was in February. I kept looking around and wondering who’s going to deal with this and that. And it was me! It was definitely a feeling that I had the power to make a difference. I had a safety survey that day, and that afternoon I had a family walk into my office and let loose on me. I got a pen and paper and said, ‘We’re going to take care of this and everything is going to work out.’ I was challenged right away off the bat.” — Christin Delahay, Administrator at a New York City-area facility

“I felt thrilled to be back in New York City, where our profession has a very different pace and approach. I had spent a year in Connecticut and 20 years in New Jersey. In New York, it’s so different. And so much had changed after 20 years. New York is so progressive with its care. We do so much online through the state portals that I didn’t do in New Jersey and Connecticut. To take a train to the Harlem train station, 100 feet from my new nursing home, was incredibly exciting. I was very glad — I have an involved owner [Norman Rausman] who believes in investing in what we need to provide patient care without being wasteful.” — Michael Hotz, Administrator, Northern Manhattan Rehabilitation and Nursing Center, New York, NY

In the program’s first year, 2016, there were 85 complaints. Last year, the number jumped to 225.

Private insurance companies run Iowa’s Medicaid health programs for more than 750,000 poor or disabled residents. Several other states are also considering increasing managed or privatized care options around the country.

The Iowa ombudsman’s report included 15 examples of Medicaid investigations, many of them looking into contractors who reduced care or funding by arguing that beneficiaries were receiving too many services.

Earlier this year, Iowa’s program came under fire when a managed care doctor was caught on tape saying a man with cerebral palsy whose home care was reduced could be a “little dirty” for a few days between visits.

In her report, ombudsman Kristie Hirschman said official notices of similar reductions were often not provided as required by law, and that the managed care organizations pressured members to sign new care plans along with their service providers and case managers.

As with all arrangements based on contracts, you must first review the written terms of the agreement to determine the responsibility the company undertook or promises made to you.

Under the contract, if the company certified the employee sent was qualified to perform certain tasks because of educational background or work experiences, yet the employee sent was not qualified, and that breach caused the facility to be fined, then you would be able to sue the company for breach of contract and the damages would be measured by the fine amount.

You should make sure such contracts clearly set forth the obligations of the parties so liability may be imposed for breach of those obligations. You also should make sure the contract does not have a term that limits the obligations of the breaching party to a set amount of damages below the actual amount of damages caused by the breach.

Additionally, you should make sure the contract does not require arbitration of disputes.

Litigation is a costly and time consuming process with uncertain outcomes. The general rule is that the parties pay their own lawyers and court costs. However, parties to a contract can modify the general rule by having the losing party pay reasonable attorney fees and court costs to the prevailing party.

Ask The Legal Expert Attorney John Durso, Esq. LeadingAge Legal Committee member since 1980 Please send your legal questions to John Durso at ltcnews@mcknights.com.

While acknowledging a split among state courts with respect to this issue, U.S. District Court Judge Douglas P. Woodlock ruled in March that Massachusetts would follow other states and the U.S. Supreme Court in allowing nursing homes to enforce arbitration agreements involving survivors.

In this case, Golden Living Center-Heathwood sought to force the daughter of a resident who died there into arbitration.

“This case is an example of the many skirmishes that continue along the recently intensifying — but wavering — battle line between those who support resolution of disputes by arbitration and those who support resolution of disputes by conventional litigation,” he wrote.

The judge ruled the defendant, Jackalyn Schrader, signed an arbitration agreement on behalf of her mother, and that her “failure to read or understand” it did not exempt her from its terms. Without proof that a nursing home resident or guardian’s agreement was obtained by “fraud, duress or misrepresentation,” it will be upheld, Woodlock said.

The judge’s decision in this case furthers the ongoing controversy around the use of arbitration agreements in nursing homes. Some state courts are still reluctant to rule them valid, yet last year, the U.S. Supreme held that the Federal Arbitration Act preempted a state law that limited the authority of a person, as a resident’s power of attorney, to enter into an arbitration agreement for the resident.

In June, CMS proposed that long-term care providers ensure that the language of their arbitration agreement is in plain writing and that it is explained to the resident and his or her representative in a form and manner they understand.

The U.S. Attorney’s Office in Baltimore announced the resolution in March, which stemmed from a civil lawsuit  led under the whistleblower provisions of the False Claims Act. The government joined the suit, accusing the defendants of systematic false reporting of the number of minutes skilled therapy was delivered between January 2010 and January 2014.

It was alleged that the accused mischaracterized the medical necessity of therapy in numerous cases. By increasing minutes in many instances over the four-year period, the company was able to bill patients at higher reimbursement rates.

“The United States alleged that the consulting companies and the skilled nursing facilities put systems in place to maximize Medicare and Tricare reimbursement and that caused the submissions of claims for therapy services that were either not provided or that were unnecessary,” the Department of Justice said in its news release announcing the settlement.

Caring Heart Rehabilitation and Nursing Center in Philadelphia agreed to pay the United States nearly $1.3 million. Other amounts providers agreed to pay were: Riverview Rehabilitation and Health Center in Essex, MD ($1.2 million); Gowanda Nursing Home in Buffalo ($811,153); and Ocean Promenade Nursing Center in Rockaway Park, NY ($608,365).

In addition to those sums, GHC Clinical Consultants agreed to pay $1.8 million and Global Healthcare Services Group $190,000. Both consulting firms are based in New Jersey, according to the U.S. Attorney’s Office.

“No one wants to live in a nursing home — we offer a home,” says CEO Mark Steele. “Salemtowne’s households are licensed as skilled nursing, but they are not defined by the words ‘nursing home.’ Instead, we create an atmosphere of a good daily life, filled with choice and accessibility.”

The community in Winston-Salem, NC, recently unveiled its $42 million, 127,000-square-foot Babcock Health Center. It’s designed to hold up to 120 residents, including 40 short-term rehabilitation beds, three 20-bed skilled nursing households and one assisted living-memory care household. Each household has an outside courtyard, living room, dining room and activity space. All rooms are private with baths that have no-barrier showers.

Conceiving a project of this scope required collaboration across the stakeholder spectrum. The CJMW Architecture team worked closely with the Salemtowne administration, and it also had a lot of input from staff, residents and the board of trustees throughout the project. “This input was very important to the final outcome of the project,” Steele says.

The design of the Babcock Health Center is a unique advantage for Salemtowne, Steele says, because “each of our target populations have their own space that allows them to flourish.” As the only provider of the “Home in Just 10 Days” rehab program in Forsyth County, he says Salemtowne “goes beyond clinical outcomes to ensure that patients have an experience that exceeds their expectations.”

The Babcock Health Center project features some inspired design elements, such as:

• Satellite kitchens for food preparation in each household

• Openness between skilled nursing, memory care and rehab through abundant communal areas to reinforce personal relationships between residents

• Natural light and a highly efficient Variable Flow Refrigerant HVAC system that reduces energy consumption

• A rehab therapy area that includes a kitchen and bathroom built in a typical residential design for guests to retrain on everyday tasks before returning home

Moravian heritage and history provided a context for the exterior design as well as many of the interior features, says Susan Perkins, CJMW’s marketing director.

“Local craftsmen transformed reclaimed walnut trees into multiple pieces throughout the center,” she says. “Reclaimed oak from the site became shelves, trusses and ‘barn doors’ in the large common room, and the paneled ceiling in seating alcoves around a living plant wall. The natural materials — wood, stone, greenery and water — together with the large skylight give residents yet another connection to the outside.”

Adds Perkins: “Daylighting was exceptionally important and guided the design of private resident spaces as well as commons spaces.”

LESSONS LEARNED

1. Household units are key to turning a nursing home into a true home for residents.

2. Rehab programs like Home in Just 10 Days offer a competitive advantage for those who have them.

3. Focusing on high-quality materials and culture creates a home-like environment that residents embrace.

1. Most of the federal tax reform benefits are positive.

Even though early legislative iterations that would have terminated private activity bonds for senior living died, the jitters they caused will lead lenders like HJ Sims to likely evaluate more and more HUD mortgage insurance alongside tax-exempt and taxable financing options, says Anthony Luzzi, president of subsidiary Sims Mortgage Funding.

Still, a healthier economy is what’s driving greater transaction volume more than anything, according to Imran Javaid, managing director at BMO Harris Bank.

“Tax reform seems to be contributing to the upward momentum in interest rates,” adds Lancaster Pollard Senior Vice President Bill Wilson HJ Sims Managing Principal Aaron Rulnick notes that, since tax reform, “bank debt isn’t as cheap as it once was.”

Meanwhile, some lenders are taking a wait-and-see approach. Nick Stahler, senior vice president of JCH Senior Housing Investment Brokerage, hopes owner-operators will use their tax reform windfalls to hire more staff in the second half. Adds Jeffrey Sands, HJ Sims managing principal, “While the tax changes will have an impact on the tax rates paid by corporate and individual tax payers that own nursing homes, we have not seen a trickledown effect.”

2. Don’t read too much into a sagging census.

“While occupancy pressure exists, due largely to a historic number of units entering the market and this pace exceeding units absorbed, there are definitely markets where the supply and demand scenario is either balanced or positive,” observes Jeff Binder, principal and managing director of Senior Living Investment Brokerage Inc.

What can operators do to combat anemic census? Luzzi believes that for borrowers “to be able to maximize leverage opportunities in an overall environment of declining occupancy, they will need to concentrate on marketing, revenue-enhancing and cost control strategies.”

3. As always, focus on the fundamentals.

Experts urge keeping an eye on these key indicators:

• Quality of operations and the ability to retain key labor

• Interest rates, competitive market balance and more importantly, ensuring floating rate debt combined with increased pressure on operating costs, do not push coverage ratios into possible covenant breaches

• Operator track record, financial performance and reimbursement

• The pace of integration of nursing homes into accountable care organizations

• Overbuilding and across-the-board labor shortages.

• Market depth and quality of management teams

4. Knowing the extremes in availability is going to matter.

Difficult financing options the second half are numerous. Steve Kennedy, senior managing director of Lancaster Pollard, points to “higher leverage bank construction financing due to tightening underwriting due to rising interest rates, depressed occupancy and over-supply in some sub-markets,” while bank and non-bank capital will continue to be plentiful for proven operators that exhibit strong cash flows and good operating histories.

“Conventional long-term commercial loans, non-agency debt, are still somewhat elusive in the sector, and we don’t see that changing anytime soon,” says Stahler.

The JCH senior VP adds that easier options should include bridge loans and long-term HUD debt. Sands believes operators who have shied away from tech upgrades could find lending difficult for certain projects, and rehab-only loans could be scarce in markets lacking certificate of need restraints. Overall, Javaid believes “continuum of care facilities will continue to attract the most dollars.”

5. Lenders could soon swoon over ‘people’ investments.

Binder believes owner-operators should focus on staffing issues such as recruitment and retention as part of a “pay now or pay later” scenario.

Javaid agrees: “Time and again, most operators report labor challenges as the biggest threat to their margins. Ultimately, labor challenges and an operator’s abilities to attract and retain talent in a tightening labor market will drive sustainable results.”

“The best advice we can give is to stay focused on operations,” adds Stahler, warning operators to not allow themselves to be distracted by “all the institutional debt and equity chasing the senior housing space.”

Mistakes to avoid

1. Assuming short census lags are a reason to avoid borrowing. Experts all agree the issue was a blip.

2. Ignoring the key indicators. Sticking to the fundamentals is always a safe bet in any lending environment.

3. Ignoring the “people” dividend. Lenders love operators who are investing in staff recruitment and retention.

Pruitt Health Pickens in South Carolina delivered for Regina Clardy, 49, who had resigned herself to hitting the dance floor only in her power wheelchair. Pruitt, Second Wind Dreams, and Pruitt’s Toccoa Pharmacy pitched in for additional therapy and the equipment Clardy needed to sway for 90 seconds of Rascal Flatts’ “My Wish” on March 17.

This was the “big day” Clardy very much needed, according to staff.

Clardy has multiple system atrophy, which eventually caused inability to move her arms and legs and brought her to Pruitt late last year. “When she first came, she was very withdrawn, watching Netflix in the dark,” said activities director Danielle Merck. “When we told her we were going to try and make this happen … the difference was night and day. She is out of her room every day, talking to everyone.”

Keys were special braces on her feet and a gait belt her son, Brandon, used to support her.

Through Pruitt’s Committed to Caring contest and a partnership with Second Wind Dreams, Clardy also received a limousine ride, a spa day and lunch at her favorite restaurant.

Social isolation — be it the experienced or perceived lack of personal relationships with family, friends and acquaintances who can be relied upon — is a serious issue for older Americans, and its impact is even greater for older adults residing in skilled nursing facilities.

Its prolonged health risk is significant, with some evidence showing that chronic loneliness is on par with the effects of smoking 15 cigarettes a day.

First launched in October, the updates, released in March, include the addition of five new technology products to help older adults engage and connect with family, friends and caregivers: Better Every Day, ConnectMeMore, LiveCare, NucleusCare and The Birdsong Tablet.

The toolkit can help long-term care providers easily sort through the myriad of tech-based solutions to find those that would be the best fit for their care setting, the population they serve, the purpose of the technology and other requirements, said LeadingAge’s Senior Vice President of Technology Majd Alwan, Ph.D.

It also provides tips on successful implementations of these technologies from other providers.

For example, some residents may need help connecting with neighbors in the facility and engaging in community activities, while others may want to stay connected to far away family and friends, Alwan says. Additionally, memory care residents might benefit from a technology that provides individualized engagement in music and reminiscence.

To examine why this might be, researchers at Lancaster University in the United Kingdom embarked on a series of interviews with older adults.

In a paper published in the Association for Computing Machinery’s magazine Communications, they found that, in addition to issues with usability and accessibility, personally held values having to do with the desirability of technology, wider concerns regarding its impact on society and fears of getting things wrong when using software are also significant factors holding back technology use among older adults.

Many participants said they worry that online shopping takes business from local shops, and eradicates the social benefits of daily face-to-face contact from shopping in person. They’re also concerned that if they don’t go into the bank or the post office, these facilities may close and people will lose their jobs.

Some participants said they see online tools such as comparison websites as being arduous and time consuming compared to getting recommendations from an expert in person. Security concerns also were omnipresent among the older adults interviewed, with many of them lacking confidence in their own knowledge of how to use online tools properly, for online banking in particular.

“The efficiency gained by conducting online interactions is not a powerful motivator for technology adoption by older adults who may be experiencing loneliness and isolation,” says study co-author Vicki Hanson, Ph.D.

“In many cases, making digital technologies appealing for older adults means ensuring that digital engagements do not replace social interactions, and if possible, facilitate new social and community-building opportunities where they can meet people.”