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LTC trends report: Reimbursement #1 challenge, technology #1 game changer

October 15, 2012
by Pamela Tabar, Associate Editor
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Long-term care facilities will have to pay attention to staff nurturing, deliver a new generation of quality care and learn some new competitive skills in order to remain financially successful, according to the 28th Licensed Nursing Facility Cost Comparison, published by CliftonLarsonAllen LLP, one of the nation’s largest firms for healthcare accounting and financial consulting.

Occupancy rates continue to dip: Census rates dropped to 91.5 percent in 2001, compared to 93.6 percent in 2007. Likewise, gross earnings have been on a five-year slide in most U.S. regions, with occasional exceptions in the Midwest. The impacts of national and state healthcare reform initiatives, accountable care organizations and new payment models for dual-eligibles (52 percent of skilled nursing payment still comes from Medicaid) are demanding that LTC providers become more savvy at contracting with their partners, the report notes. A “clear shift away from volume-based reimbursement to value-based reimbursement is underway.”

Challenges can also be turned into competitive opportunities, the report explains. As consumer knowledge of eldercare services continues to increase, a new openness to creative service delivery and corporate culture will be needed. In the effort to prove quality care delivery and streamline business processes for cost-efficiency, “technology is potentially the single-most important phenomenon that can synergize the other driving forces to assure value,” the report says.

The 37-page report is based on the analysis of 450 nursing facilities nationwide, including for-profit and non-profit. The trends and cost ratios in the annual report are placed in the context of a five-year look-back.

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