The Mexican tax authority (“SAT”) and the Internal Revenue Service (“IRS”) have announced a joint agreement to expedite the Advanced Pricing Agreement process for maquiladora operations in Mexico

Not-for-profit nursing homes tend to have the lowest payment-to-cost ratios compared to for-profit and government-owned nursing homes, raising questions about sustainability and service quality in these facilities (See Appendix Table 9).

Nursing homes with lower staffing levels (below 3.00 hours per resident day) had a higher average payment-to-cost ratio (0.85), while those with more robust staffing (above 4.0 hours) had a lower ratio (0.77) (See Appendix Table 9). This could imply that better-staffed facilities might be more efficient or effective in managing costs.

The mean and median all-payer payment-to-cost ratios were nearly 1, indicating that payments from all sources (Medicare, Medicaid, etc.) weren’t fully covering provider reimbursable costs.

It’s important to note that the study didn’t evaluate whether the Medicaid payments are adequate or if nursing homes are operating efficiently based on resident acuity — critical factors for understanding the overall care quality.

Takeaways for nursing home providers

The insights gained from the ASPE research are valuable to inform policy discussions supporting assessments and Medicaid payment reforms and help stakeholders understand the implications of potential changes.

In particular, the report’s impact analysis is useful for examining how modifications in Medicaid payment policies could affect the financial performance of nursing homes at both the state and facility levels. This analysis also addresses Medicaid payments and costs across different nursing homes, highlighting areas that may require further attention and reform.

Overall, the research contributes to a deeper understanding of the financial landscape of nursing homes while underscoring the importance of aligning Medicaid payments with the actual costs of care to ensure quality and sustainability in the long-term care sector. 

Actions you can take today

In response to the findings of the ASPE report on Medicaid payments and nursing home costs, here are five actions your organization can take now.

1. Advocate for payment increases

Partner with state-level nursing home associations to present unified arguments for higher Medicaid reimbursement rates. Leverage the cost reports and data from the ASPE study to highlight the gap between payment rates and the actual cost of care.

2. Optimize your staffing strategies

Consider implementing flexible scheduling to minimize overtime costs while maintaining care standards. Invest in staff training to improve efficiency and reduce turnover, which can in turn lower recruitment and onboarding expenses.

3. Investigate options for cost management

Engage experts to conduct an operational assessment to identify staffing and operational inefficiencies and other cost-saving measures.

Review vendor contracts, and where appropriate renegotiate with suppliers to secure more favorable terms for essential goods and services. Evaluate whether contracting for services such as dietary, laundry, housekeeping, etc., are viable options for your organization.

4. Explore alternative funding sources

Seek federal or state grants aimed at improving long-term care facilities. Look for philanthropic partnerships; engage with nonprofit organizations or local charities that support healthcare initiatives. Maximize participation in institutional special needs plan partnerships or Accountable Care Organization or other pay-for-performance programs that may provide additional revenue streams.

5. Evaluate quality improvement initiatives

Align care practices with metrics that can qualify the facility for value-based incentives. Demonstrate commitment to quality through community outreach and transparent reporting to stakeholders.

These measures can help your nursing home address financial challenges and sustain quality care delivery amid Medicaid reimbursement shortfalls.

If you have questions regarding the direct impact on your organization, submit a contact us form today, and Plante Moran reimbursement expert will follow up with you soon.

As summarized in Table 7 of the report only three states appear to cover Medicaid costs (Delaware, Louisiana and North Dakota) while Nevada and New Hampshire appear to have the lowest payment to cost ratio.

As summarized in Table 9 below non-profit and continuing care retirement community nursing homes have the lowest payment to cost coverage ratio. While bed size and occupancy rate did not have a significant impact to the cost coverage. However, operators with a lower Medicaid population were able to have more of their costs covered, as private pay and Medicare provide more appropriate reimbursement of costs.

Addressing the rising number of behavioral health patients presenting in the emergency department (ED) is essential for hospitals, large and small. The lack of behavioral health beds for patients that present to the ED is a major contributor to overcrowding, disrupting patient flow, and extending overall length of stay throughout the hospital. While the volume of behavioral health patients presenting in EDs throughout the country is increasing, resources to handle the growing need aren’t keeping pace with the demand.

This diminishes the patient experience and delivery of appropriate care within the ED. Since the busy, loud environment of most EDs can exacerbate behavioral health symptoms, it’s important to move patients into a more suitable environment as efficiently as possible.

Whether your hospital or health system has a behavioral health unit, or you partner with a local or regional resource, the question every hospital ED must ask is the same: How can we optimize the flow of patients to a behavioral health unit and get them the care they need? The answers lie in the following four strategies.

1. Treat behavioral health as any other medical service

Patients presenting with behavioral health needs can be perceived as exceptions to the hospital’s routine care processes. When the ED and other units treat behavioral health differently, they tend to disregard established tools. This includes the electronic health record (EMR), tracking boards, predictive discharge workflows, and bed-tracking tools that keep your processes moving. Not only does this hinder the ED; it also prevents other service areas — bed placement, transportation, housekeeping, house supervision, and many others — from operating efficiently. The result can be significant delays, and a lack of standardized processes for behavioral health patients.

Behavioral health patients may have particular needs, but the processes for treating them, protecting privacy, and managing their flow through the ED to inpatient units should be no different from any other medical or surgical patient.

2. Strengthen the partnership between the ED and behavioral health providers, both internal and external

Often ED physicians see patients who they undoubtedly know will meet the criteria for admission. In these cases, a highly collaborative relationship with behavioral health can get the wheels moving quickly.

First, can an ED provider make the decision to submit an admission order for a behavioral health patient in particular cases? If so, identify criteria for ED providers to use to determine when they can admit or discharge a patient, or when they need to request a psych consult to confirm a decision. Build this criteria into a workflow to reduce the number of process steps and the amount of time spent obtaining and completing a behavioral health consult before submitting the admission order.

In cases where a behavioral health consult is needed, might a phone, rather than in-person consult, be appropriate? A phone consult reduces wait time in the ED and enables the behavioral health provider to stay in their unit. This prevents downstream delays as well.

When establishing a workflow for behavioral health consults and admission decisions, consider your current service-level agreements between provider groups as well as your organization’s culture to ensure the process is in alignment.

3. Use flow drivers in your behavioral health unit just as you do in your general medical and surgical units

Similar to your other medical and surgical service lines, establish a process for the behavioral health unit to provide predictive discharge information to the ED. When behavioral health providers document predictive discharge in the EMR during daily rounds and huddles, bed placement and the ED will know when beds are opening up for admitted behavioral health patients still waiting for placement.

Using the same common flow drivers also enables bed placement and the ED to identify future locations for behavioral health patients and plan transport from the ED to the inpatient unit prior to the bed becoming available. This proactive approach helps decompress the ED and improve patient flow.

A word about privacy: Often behavioral health records are separated from the usual charting system. Taking steps to protect privacy is appropriate for documenting treatment planning and medications, but your hospital still should be using flow drivers to communicate with other service areas. We see it again and again — hospital EDs and behavioral health units are underutilizing resources at their disposal for managing behavioral health patient flow. Remember, data that drives flow isn’t protected information such as alerting when a bed is ready for cleaning or when a bed becomes available on the unit.

4. Establish urgent outpatient appointment slots for ED patients appropriate for discharge

Your ED clinicians can often tell if a presenting patient might be better served by an urgent outpatient behavioral health appointment within the next 24 to 48 hours. If an appropriate follow-up plan can be created for a patient who doesn’t meet criteria for admission, your ED can help schedule that urgent appointment and discharge the patient.

Creating urgent care openings in the outpatient book helps to free up space in the ED for other patients who need the bed. Many health systems don’t currently have urgent outpatient behavioral health appointment scheduling setup — this is a missed opportunity.

Don’t have behavioral health services within your hospital or health system? This strategy still applies, and you’ll need to work closely with your behavioral health partner to establish urgent appointment slots.

To achieve this level of service, the ED needs to work closely with its case management team. Case management hours of operation should align with your hospital’s peak placement hours for behavioral health patients. If case management is available during these busy times, discharge planning can take place earlier in the patient’s stay. In this way, case management can better identify long-term placement for patients and secure transport when discharged.

In conclusion

These four strategies can help resolve many of the patient holds that EDs experience when patients present with behavioral health needs. With an increase in awareness of behavioral health needs in our communities, it’s even more critical to manage the flow of behavioral health patients in the ED by using the same processes and tools for all your patients.

To get started, ask your ED these questions:

• Are we managing behavioral health patient care processes the same as we do with our other patients?
• How do we handle admission orders for behavioral health patients? Do we require an in-person psych consult, or have we established workflows so that our ED clinicians can initiate an order in particular cases?
• Are we using EMR mechanisms to optimally manage patient flow from the ED to all units, be they the ICU, surgery, or behavioral health?
• Are we requesting housekeeping and other ancillary services the same way for our admitted behavioral health patients as for other patients?
• Are we using the same predictive discharge planning tools as we do for other patients?
• Are we using tracker boards for our behavioral health patients?
• Do our case management hours align with our ED’s peak placement times for behavioral health patients?

Your answers can help guide specific changes within your ED and strengthen the relationships between the ED and the rest of the hospital or health system. The result? Better flow of patients through the unit, shorter lengths of stay, reduced holds, and more standardized care for ALL your patients.