Top Ten 2023: Long Term Care Reforms

Based on AHLA’s annual Health Law Connections article, this special series brings together thought leaders from across the health law field to discuss the top ten issues of 2023. In the seventh episode, Anna Bhat, Office Managing Principal, PYA, speaks with Bill Hopkins, Partner, Spencer Fane LLP, about recent government initiatives to reform the U.S. post-acute care industry. They discuss some of the challenges currently facing the post-acute care industry, the presidential directives announced by the Biden Administration, and potential issues around private equity. Sponsored by PYA.

Watch the conversation here.

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Transcript

Speaker 1: 0:14

A H L A is pleased to present the special series highlighting the top 10 health law issues of 2023, where we bring together thought leaders from across the health law field to discuss the major trends and developments of the year. Support for A H L A in this series is provided by P Y A, which helps clients find value in the complex challenges related to mergers and acquisitions, clinical integrations, regulatory compliance, business valuations, and fair market value assessments, and tax and assurance. For more information, visit pya pc.com.

Speaker 2: 0:48

So, hello everyone. Um, very happy to be here on, um, this podcast series. I have Bill Hopkins here, and Bill, I'm very excited to be speaking about this important topic today with you. Um, just, you know, to help the listeners, um, know a little bit more about me, I am Anna Bon. I'm a principal at p y a. Um, p y a is a healthcare consulting firm, and we are so excited to be partnering with a H L A on this series of, uh, podcast. Um, bill, would you be, uh, kind enough to introduce yourself to our, uh, listeners here?

Speaker 3: 1:27

Absolutely. Thank you. First of all, thank you for, for allowing me the opportunity to be here and to participate. My name is Bill Hopkins. I am the office managing partner of, uh, the law firm, Spencer Fain. Uh, I'm a healthcare partner as well in, in a, in our healthcare section. And, uh, uh, have been a member of h l A for a long time.

Speaker 2: 1:48

Excellent. Excellent. So this is a very interesting topic. Um, bill and I, you know, you and I had talked a little bit, uh, prior to this about how it, it touches everybody. You know, you don't have to be a healthcare attorney or a healthcare consultant to wanna, uh, understand more about long-term care. It's gonna touch our lives in one way, shape, or form, if not now, in the future. So, um, I'm very excited to hear more from you. I think maybe to kind of start off, you know, I was think as I was thinking about this topic, you know, long-term care facilities, they, um, provide services for some of our most vulnerable, uh, population. You know, those who really cannot advocate for themselves. Sure. So when I read your article, you know, it covers what we can expect to see in 2023, uh, by way of initiatives proposed by the Biden administration. Um, that's, you know, sort of, um, trying to reform, um, persecute care. So, but before we cover some of the proposed reforms, you know, could you provide the listeners with some examples of where you feel the system has actually failed those vulnerable population that we talked about earlier?

Speaker 3: 2:55

Well, you know, it's, it's, it's an interesting question and perspective. Uh, as a, as a healthcare defense attorney who represents nursing homes, I don't, I don't know that I'd take the position that they failed, but<laugh> at least not public<laugh>. Um, but, uh, but a and you know, and, and, and, and, you know, all joking aside, I think realistically, we're not talking about a failure. We're talking about a disconnect. What's really happened in long-term care and post-acute care, depending on, on where you are, long-term care is kind of the old term that was utilized, no pun intended, with regard to the industry, uh, because it was obviously the, the caring for individuals that were older. It's ironic because long-term care is kind of a misnomer because it's a short, it's a relatively short period of a person's life. Um, so post-acute care is, it has become the new terminology, which makes sense because most people that derive, uh, some time in, in, into these facilities that we're discussing, uh, long-term care being, uh, nursing home, home health, hospice, uh, those type, uh, assisted living, those types of facilities, um, they typically come from a hospital. And so the hospital being the acute care setting and then these other settings being the after or the post-acute. So that quick, quick explanation of that term, uh, really the difficulty in this industry is multifaceted, and you could waste a lot of time discussing kind of the philosophical aspects of it. But a big, a big part of it is the way that America deals with and views their elderly. If you look at other cultures, there is a fundamental difference between how other cultures look at and address their elderly in the population. In some cultures, they're absolutely mainstreamed, and you see families and households that have multi-generations in one home, uh, you know, in other cultures similar to the United States, there's a bit more of a separation. There's the notion that that, you know, individuals, you know, start off as children grew up to be adults, live their lives as adults, and then after they reach a certain point, uh, arguably, uh, for lack of a better term, a, a a, a difference in viability as far as the productiveness of their life, the American culture kind of shifts, and we don't have a system readily set up for those people to be cared for or addressed as a part of society. And so what you'll see is that long-term care, post-acute care kind of becomes a repository. And I hate the way that word sounds, but it's a very accurate concept for what happens to people once they reach a certain age because the new, you know, their children are going on with their lives and living and doing what they're doing. And, and these people are placed in these homes because the, the children, uh, or the other, uh, people in, in their lives can't care for them. And so there's a little bit of a fundamental disconnect there. And then as a result of some of that, you don't have the same interactions. You don't have the same constancy of interactions between the families and the individuals that are in the facilities. And, you know, studies have shown that that affects the quality of care, because if you're feeling isolated and and alone, then you don't heal as well. You don't, you don't have the same zest for life. And so it, it's a, it's a long way to not really answer your question.<laugh>. There's a lot of, there's a lot of factors that come into this. And the other factors, the obvious factors are money, obviously caring for someone, costs money. And, uh, the industry would, would like me to put out there if, if they were, you know, if they had a hand in my back telling me what to say, they would say that one of the largest influences of how the care is provided is the money. You know, the reimbursement for, uh, for, for the care that's provided in nursing homes is often very different than what you'd think it would be. If you look at the per diem, uh, that, that, that nursing homes are paid to care for people in a full care 24 7 setting, in some cases, the amount of money that they're paid to care for a human being is less than what you and I would pay for a hotel room to just get a room. And somewhat are, would argue, I think rightly so, that that's a pretty significant disconnect when we're talking about human beings tied to that. And one of the things that we'll talk about are all the staffing issues. You know, we're, we're seeing a lot of staffing issues going on, but it, but when you look at it and, you know, you examine the staff that are working in nursing homes, especially at the nurse aid level, you have scenarios where these nurse aides are, are, are, are individuals who are looking for fairly entry level positions. They're typically undereducated by comparison to the general population. And we're asking them to come in these facilities and care for human beings on, on, on a, you know, a fairly constant basis and at pretty significant levels, depending on the acuity of the care of the resident that they're caring for. And from an hourly wage standpoint, they could literally go across the street and work at a fast food restaurant and make the same, if not more money, and take that human element out of it entirely. And so there's, there's an argument that there is some pretty significant disconnects between the industry who they're caring for and what it, and, and, and, and what can be done with the parameters that we're currently dealing with.

Speaker 2: 8:40

Yeah, I can, I can exactly relate to, you know, sort of the cultural genesis of, of the issues that we are facing. We were driving past a, a very large, um, you know, 65 plus community and it was just expanding and expanding. And my husband made a comment, my God, look at the number of these, these, um, apartments that are coming up. And I said, yes, for every single family home that's being built out there, that's a set of parents who need to live somewhere. Right? Right. Whereas, you know, I mean, I've come from Singapore and it's, you know, a lot of Asian culture definitely has the multi-generational, you know, the expectation that parents would live in the same house with the G grandkids. And, and so I think the needs are are very different in those scenarios. So, so definitely very helpful and very, very interesting. For sure. So, you know, the Biden administration, we talked about this a little bit earlier. They, they have announced a certain set of reforms, um, early part of, um, last year. So at a very high level, what are, what are the presidential directives?

Speaker 3: 9:47

Yeah, so essentially what the Biden administration did was they, you know, the, this issue has been going on long before the Biden administration got involved. So obviously every administration deals with it to some degree, but, uh, the Biden administration has taken pretty significant stances on this. And last year in particular, essentially mounted three, three reforms that, that, that then created four initiatives. And so to make sure I get it right, I'll read it to you each, the, the three reforms are every nursing home provides a sufficient number of staff who are adequately trained to provide high quality care. That's the first reform. Second reform is poorly performing. Nursing homes are held accountable for improper and unsafe care and immediately improve their services or are cut off from taxpayer dollars. And then the final reform is that the public has better information about nursing home conditions so that they can find the best available options when choosing a nursing home. So those are the three reforms from those three reforms. Four main initiatives were, were, were created and then other programs have have spun off of those before. The four initiatives are, the first one is establishing minimum nursing home staffing requirements. The second one is reducing resident home crowding. The third one is strengthening the skilled nursing facility value-based purchasing program, which is how the nursing homes get paid. And then the fourth one is reinforcing safeguards against unnecessary medications and treatments. And if I could really quick touch on each of those initiatives, cuz I think a little details helpful with regard to that first initiative, establishing minimum nursing home staffing requirements. We talked about that to some degree. The fundamental issue is, you know, you've got to find people, first of all, you have to find the people to fill those spots. Second of all, you've got to create a system that allows them to be paid a living wage that that facilitates them wanting to work there. The third issue and that ties to this initiative is what is the correct number? And this is really the magic of this issue. What is the correct number of staff that are required to properly ensure that that adequate care is being provided in a nursing home? And that is a number that you can bring, you know, multiple scholars into a room and debate for quite a while. Because the issue is that there's going to be arguments that that turns on the quality of the individual you have. Because if you've got a really skilled staff person, they don't necessarily need as much support as someone else. If you've got lesser skilled, you need more people. And then you have the entirety of the issue of the acuity of the residents that are in the facility, which can run the gamut as well. So literally developing a national standard is problematic because you could have two facilities right next to each other, but because of the difference in the acuity of the residents, they admit their need and their minimum standard might be vastly different. And so it's very problematic and part of the reason why we don't have a national standard are exactly those reasons because it's really hard to put a number when you have so many other variables involved. The next issue, which I think is one of those issues that's kind of a classic easier said than done, is reducing resident room crowding. It's funny when you think about it because the fundamental notion of this is that, you know, people, you know, live their lives as children being taken care of and living in multiple people in arrangements. Then the whole idea when you're an adult is to move out and, and live on your own until you have a family and then do that. And then when you're, you know, and, and in the, under the current nursing home model, once you enter a nursing home, you then enter a room where you're immediately assigned a roommate. And a lot of that is spacing. A lot of that arguably is the industry trying to maximize revenue by having as many people in the facility as possible. And therefore they, they create these group rooms to have two or three more people, two or three people to allow, you know, the facility to have as many people as possible. And that's sometimes on need, sometimes just on the way that the, that the building is designed. But the, but, but the notion now is that despite the fact we've had an industry for as long as we've had the industry that has had these multiple person rooms, this initiative would seek to reverse all of that and give ev and, and, and give everyone a private room. I think it sounds great. I think it's one of those great stump speech concepts, but I don't know how they're gonna do it logistically because the majority of nursing homes that are in that, that, that are in action are currently built. And so, you know, maybe an initiative going forward that may, that might make sense. But as far as reforming the current nursing homes to make them them modify their facilities so that everyone has their own room, I just don't think it's financially or, or, or reasonably likely to happen, quite frankly. Um, so that one's interesting on paper, but I don't think it's got a lot of reality attached to it. Um, third one is strengthening the, the skilled nursing facility value-based purchasing program. Now this one is interesting. This one tracks the general trend of healthcare to, to look more at value, value-based payments. And the notion is the better the care you provide, the more we pay you. As we've talked about, the nursing home reimbursement scale has been an issue that the per diem we discussed earlier, that's been an issue. And so I think the industry would welcome the concept of, you're telling me if we provide good care, we can get paid more. Sounds great. I think that's something that would be welcomed and something that would be considered. Now obviously the devils in the details, what constitutes quality of care in that environment? And once again, it fluctuates because if we're talking about, if we look at kind of how the hospitals do it and have patient satisfaction and things like that in a nursing home, it's just different because your, the acuity, the the acuity of your patients are different, but also the mental levels mm-hmm.<affirmative> of your, of your residents are different. And so how do you judge the patient satisfaction of a resident with severe Alzheimer's or dementia or, or, or other issues that prevent them from being readily interviewable, you know, does the facility just suffer on that standard memory care is another example, you know, does the facility suffer because they can't score on that value because their residents can't be interviewed? So there's a lot of issues there as well that, that are you, that that, the concept is great, but how it's going to play in a post-acute world I think is very, very complicated. Once again, sounds great on paper. The last one is reinforcing, reinforcing safeguards against unnecessary medications and treatments. This one is one that is somewhat unique to two nursing homes and these long-term care facilities because a lot of these individuals that come to the facility are coming there because their family members cannot control them or cannot properly care for them. And so a lot of them come with some level of behavioral complication. The unfortunate side of that reality is that there are certainly nursing homes out there. I don't think it's the majority, I don't think it's, it's as widespread as you might hear from the proponents of issues like this, that the notion is, is that there are two forms of restraints in a healthcare scenario. There's a physical restraint where I would actually literally, you know, tie someone down. But then more rel more relevant to this issue is the chemical restraint. And the concept is that facilities are admitting individuals and through the use of the physician and, and the medical orders, they are having them chemically restrained by having them prescribed medications that essentially limit their activity, limit their mental acuity limit, limit their, their behavior by limiting their, their involvement. And in some cases by limiting their consciousness. And so their examples, the extreme examples certainly are of residents who are in, who are admitted into a nursing facility with tremendous history of behavior and other problems. And then when you look at them in a nursing home, they are almost comatose 24 7. And it's because of the medication regime they're on. And what this initiative is seeking to do, and I think it's a great idea, is to force nursing homes to make a determination of we can either care for this person as they come to us or we can't if we can, great, then let's, let's if, if their behavioral issues, let's deal with those issues. Let's find ways to adequately assess them, modify them, and ensure that this resident is allowed to live their life as they should versus chemically treating them and restraining them and essentially filling the bed but taking away the person.

Speaker 2: 19:07

It's kinda scary. Bill, I think I, yes, I, I'm going, I'm gonna<laugh> get on better terms with my children and make sure they take care of me when I get older.

Speaker 3: 19:17

<laugh> yes,

Speaker 2: 19:17

It sounds like a horror story.

Speaker 3: 19:19

This, this whole issue does raise some, uh, some, some, some philosophical matters to, to be discussed. There's no question.

Speaker 2: 19:26

Wow.

Speaker 3: 19:26

But, but once again, it gets back to how we started. It gets back to how America views its elderly, you know, uh, there's an argument from the industry standpoint that we can't keep having administrations trumpet all of these issues without addressing the underlying aspect of how America views elderly. If you know you have people and, and you know, that, that, that are placing individuals into these facilities and essentially abandoning them, then it's, it creates a very difficult scenario to then expect the post-acute industry to fix and make up for that without additional consideration for how they got there in the first place. It's, it's, it's very, it's incredibly complicated.

Speaker 2: 20:13

Yeah. And I think really if there's a solution, it's a really long, long, long-term solution that comes from like really the basics of how human interaction forms and how you That's right. Take care of one another in your, in your own little family nuclears and all of that

Speaker 3: 20:29

Cultural change. I mean, that's absolutely right. I mean, I mean, there needs to be a fundamental shift of how we view the elderly and there's, there's other side aspects of that that get to the malpractice issues and, and kind of how these cases work out when something goes wrong that, you know, and that's, you know, know I don't get me started on that soapbox, but, but there are, you know, the point is is that, you know, human beings are complicated machines, but in, in the most scientific of standpoints, we are machines and like any other machine, we break at some point, we all have warranties, and at some point the body's warranty fails. And no matter what you do, you cannot maintain that body. You cannot, you cannot ensure that person lives like they used to live. And that's a cultural acceptance that America doesn't have like other cultures have. Mm-hmm.<affirmative>, you know, other cultures embrace kind of the, the beauty of aging and they embrace the fragility of it, and they transition, you know, from one stage to the next. There's an argument at least that America has kind of, you know, ignored that transition and has expectations that are not necessarily realistic to what, what actually is happening.

Speaker 2: 21:51

You know, you talked about a little bit about the measurements that are needed in order to, you know, do do better value-based reimbursements. You know what, yes. What is, what is to be, what is to be measured. I mean even identifying what we should be measuring, how it can be measured, you know, all the, the issues that you pointed out. Do you go and interview an Alzheimer's patient and then find out whether they're satisfied with the services? I think those get very tricky For sure.

Speaker 3: 22:17

Absolutely.

Speaker 2: 22:19

So, you know, money, money makes the world go wrong. We know that reimbursement is a very big issue. If let's say any, you know, you can, you can argue for a much higher reimbursement for persecute care, um, there's an argument that, you know, the care would probably be of much higher standards. You can hire the right people, so on so forth. Um, interesting again, in your article is about how private equity has been quite active in this space. Yes. So obviously they are seeing that there's money to be made because that's really, really what makes them go around. Um, so, you know, there'll be lots of transactional attorneys who are probably in this space, um, and I'm seeing that if there's going to be more scrutiny in this industry, that's something they need to be thinking about as well. So what are your thoughts about what, you know, those who are operating in, in, in healthcare law and, and encountering more of this, um, private equity type transactions, what can they be doing to mitigate any kind of major issues that may be coming down the road?

Speaker 3: 23:25

It's a great question. And, and what's what's interesting about the private equity entrance into healthcare is that it, it, in some ways it's transformative. Um, depending on which side of the equation you're on, you could argue it's transformative, positive or negative. The part of what, part of the scrutiny that's coming, uh, from the Biden Biden administration, and that's, that that's being placed on the healthcare, uh, industry as a whole with regard to private equity equity is that the notion is, is that not every, not every private equity deal is good. Not every private equity deal is going to fix the problems. And it gets back to your previous point of money, makes the world go round, but money doesn't fix everything that's broken. And that's really kind of the issue that in, in some instances, the private equity entrance into a a healthcare facility is truly, you know, a divine intervention. It allows the facility to purchase, uh, equipment, it, it didn't otherwise have, or to upgrade equipment to the, to the, to the latest standard. It allows them to hire staff that they couldn't otherwise afford. It allows them to revamp the care they provide and reach a significantly higher level. On the downside, there are, are private equity, uh, scenarios, uh, you know, anecdotes if you will, that speak to private equity firms coming in purely under the notion of there is profit to be made in this facility in the bricks and sticks, meaning the land, the actual land or the building or, or in the equipment and, and, and the stuff that's involved in the industry, but there doesn't seem to be the same level of concern with regard to the actual care that's being provided in the actual people. And so there are stories and anecdotes of private equity coming in on, on paper looking like it's going to save a facility. They come in, they put some money towards different things, and essentially what they're doing is they're, they're, they're shining it up the facility with the notion of selling it for a profit to another company that may or may not care about improving the quality either. And so the short-term benefits of having them come in, infuse cash and shine up the penny, if you will, are lost the minute that that facility is then sold either for the la for the real estate or for some other reason. And, you know, perhaps it closes, perhaps it stays open, but there are horror stories of facilities being left literally in shambles because private equity came in, took whatever they could get out of it, sold it, and then left it with no other choice but to close and then no care being provided to those individuals in that community. So I, in, in this, I, I don't think that's anywhere near the majority of these deals, but, but it's a classic scenario of, there's a few bad examples out there and a few horror stories that are driving a tremendous amount of scrutiny.

Speaker 2: 26:31

Well, bill, I think you have scared the daylights out of me,<laugh>

Speaker 3: 26:38

My daily thing.

Speaker 2: 26:41

Jokes aside, you know, um, very important. I think this is a very important, um, topic and I would think that it's straightforward. Have enough staff members, you know, spend the money need to spend, provide quality services, and to think that in 2022, the precedent needed to create a directive to try to get these basics in place. It's, it's surprising. It was very surprising to me. But I, I hear all the points that you've made that kind of got us where we are right now and the things that probably need to get done. Hopefully we are moving in the right direction and, um, we create more positive encounters for, for us to use long-term care facilities in the future. I guess. So, but this is very helpful. Your article that you had, um, you know, written for a H L A that was very informative as well. So, um, I'm sure the listeners had a had, um, a good time listening to, to all of your thoughts, and I thank you very much for joining me on this podcast.

Speaker 3: 27:43

Thank you again for the opportunity. I appreciate it. And I think, you know, the benefit to the industry is any attention paid to the industry is helpful because it, it allows them the opportunity to raise these issues and to have these discussions. And obviously there's a little bit of frustration as well because the, you know, it, the initiatives all come out pretty negative. But you know, if we can yield good results and take care of people because that really is the point. If we can take care of elderly humans better, that's probably a good thing.<laugh>, I think everyone's on board for that, so thank you for the opportunity and the, and and the platform to talk about it.

Speaker 2: 28:17

Excellent. Thanks so much. You have a nice day then.

Speaker 3: 28:19

Thanks, you too.

Speaker 1: 28:27

Thank you for listening. If you enjoy this episode, be sure to subscribe to a H L A speaking of health law wherever you get your podcasts. To learn more about a H L A and the educational resources available to the health law community, visit American health law.org.