The following article was published in the September 2020 issue of the New England Administrator, an online quarterly publication issued by District One of the American College of Healthcare Administrators (ACHCA).


If ever there were a system primed to become a virus petri dish, it was nursing homes.

Residents were severely compromised by physical and mental conditions that made virus incidence high and
survivability rates low. Most of their direct care employees had wage limitations that forced them to work in multiple facilities, thereby serving as deadly virus carriers. Their aged physical plants and inadequate public reimbursement systems led to a congregate model of care that required residents to share rooms and bathrooms with those in ad-joining rooms, not to mention the lack of high-quality air filtration systems. It should also not be a shock to anyone that other more modern, consumer-driven, better funded, private accommodation models of care such as assisted living have weathered theCOVID-19 onslaught far better than nursing homes.

The question on everyone’s mind is how nursing homes should be restructured and re-financed in a post-COVID world to better protect their residents and provide quality, patient-centered care. The possibilities for change are limit-less. They range from making minor modifications to the current system, particularly in areas such as infection control making major structural and reimbursement changes to the system that allow for greater diversification of services and funding sources; or throwing the current system out entirely and starting over. Most would agree that the second of the three options is the most realistic and likely.

Here are some suggested changes that state and federal regulatory and reimbursement systems should consider in-stead of the punitive, regulation-driven approach history would deem most likely.

  • Close chronic under performing nursing facilities. The Massachusetts Nursing Facility Task Force Re-port issued before theCOVID-19 outbreak identified 18 chronically low quality and low occupancy facilities with a total of 2,474 licensed beds. Those beds are not needed in an over-bedded system where occupancy rates in the low80s have become the norm. The roll call ofCOVID-19 disaster facilities could also yield likely candidates for closure and resident relocation.
  • Support and encourage structural changes to the nursing home system that allow providers to diversify services and funding sources. Conversions and co-location of services are examples, as are efforts to create “hybrid” facilities that offer multiple types and levels of care (e.g. post-acute care, affordable and private-rate assisted living, residential care, congregate care, adult day health, outpatient care, etc.) in a single location. The dam-aging and consumer unfriendly disconnect that exists between skilled nursing facilities and assisted living residences must be bridged by creating campuses that offer both options of care that enable residents to benefit from their synergistic possibilities.
  • Realign and reform the nursing home financing system from its current, silo-based approach that hopes that adequate Medicare reimbursement for short-stay, post-acute care will cross subsidize losses from chronically underfunded Medicaid payment for long-term care. States should sup-port models such as the Senior Care Options(SCO) program, Medicare Advantage Special Needs Plans, and ACOs that merge funding streams and integrate medical care and social services.
  • Develop reimbursement policies that promote a“living wage” for direct caregivers in nursing facilities, most notably certified nursing assistants(CNAs). Wage pass-throughs, wage minimums, state minimum wage add-ons, etc. are needed to ensure that these crucial employees do not need to moonlight to achieve a living wage.
  • Reform and revise the certificate of need and capital reimbursement methodologies that currently discourage providers from renovating or replacing their cur-rent physical plants. Rhode Island’s Nursing Facility Transportation Program is a good first step in this process and should be watched closely by other New England states.

SNF providers also bear some responsibility in promoting, innovating, and developing better and higher quality modes of care. They should work with their real estate in-vestment trusts (REITS) and lenders along with government and should be open to reducing their licensed bed capacity, creating more private rooms, and converting existing space to non-SNF purposes.

Like a phoenix rising from the ashes, disasters often produce opportunities for innovation and creativity that are realistic but fleeting. If the COVID-19 epidemic is met with traditional, punitive measures, we will have lost an opportunity that may never reappear.

W. Scott Plumb and David A. Roush are partners of Strategic Care Solutions. SCS is a team of experienced experts who offer consulting and management services to the New England elder care community including financial, clinical, and operational management; planning and development services; administrative and nursing placement, and IT solutions.