Harmony Healthcare Blog

AHCA Provider Lounge Series: What Payment Reform Means for Skilled Nursing Facilities

Posted by The Harmony Team on Fri, Feb 03, 2017

Interview with Jim Gomez, President - California Association of Health Facilities

Kris Mastrangelo, President of Harmony Healthcare International (HHI) interviews Jim Gomez, President of California Association of Health Facilities (CAHF), in the AHCA Provider Lounge.  Jim discusses the effect that Payment Reform, ACOs and MCOs are having on Skilled Nursing Facilities.   (Audio transcription below).


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Transcribed Audio:

Kris Mastrangelo:   Good Afternoon everyone.  Welcome back to Day 2 of the Provider Lounge at the American Healthcare Convention.  This morning we’re with Jim Gomez, President and CEO of California Association of Health Facilities.  Thanks for coming Jim.

Jim Gomez:  Pleasure to be here.

Kris:  You know Jim, lots of discussion this week on payment reform and education and training and all these issues – or excuse me, obstacles that are happening.  Tell us a little bit about your perspective and maybe some specifics you’re seeing in California.

Jim:  Sure, I think for us one of the keys is that we are seeing both Accountable Care Organizations and Managed Care Organizations coming to California in our major metropolitan areas and part of that really puts the Skilled Nursing Facility second or third in the food chain and our payment reforms on the national level really would provide a SNF-only bundle in which the Skilled Nursing Facility would be able to have an episodic bundle and be responsible for the care of in a bundled-fashion, rather than in a day-to-day basis.  We think that’s where the industry needs to go and in California we’re seeing some of those ramifications of ACOs and MCOs both trying to cut length stay and all of the savings go to the Accountable Care Organizations and none of the savings going to the Skilled Nursing Facility.  So we think it’s really important for Skilled Nursing Facilities to participate in the profits that accrue out of that.

Kris:  You know it’s fascinating because in the first three pages of the Affordable Care Act it talks about the three entities that can have this - you know - cost savings.  Number One:  the hospital, Number Two: Physician Groups, Number Three: Insurance Companies.  So you’re one hundred percent right.   The Skilled Nursing Providers are like the stepchild.  They are not seated at the table.

Jim:  Absolutely.  And you know they all live on the mountain, we live in the valley.  We get what they give us as it flows down and I think it’s important that the post-acute care that’s provided in the Skilled Nursing Facilities is critically important to people’s rehabilitation and so it should not be just a cost issue, but it should be a cost and quality issue. In California we’ve done tremendous efforts on improving quality, of meeting quality measures and we think that the quality that is being provided in California nursing homes is what our public needs and we can’t sacrifice that quality at only the expense of profit.  We think there needs to be a balance and we think a national payment reform which would have Skilled Nursing Facilities holding a bundle is where that would occur.

Kris:  I agree with you a hundred percent.  It will be intriguing to see how this all plays out.  Now one more question too.  What is the feel for the Providers in California…in other words are they – I know they see the challenges, but with regards to the keynote, with the amount of seniors entering – the baby boomers – with that infiltration into the settings are they aware of that?

Jim:  Sure.  I’ve been presenting the demographic changes and 2018 and 2019 you’ll really start to see the 84 year-old and older come into the population.  So yes they absolutely are aware of that, but I think at the same we are going to have this major demographic change.  We’re already at 88% occupancy in California so we are going to have a demographic change.  People are going to look at reducing length of stay and secondly, I think technology is going to come in the next ten years – it’s going to have an impact.  So we need to make sure that we have enough nursing homes and there’s enough quality that it’s the right place to be.

Kris: Excellent.  Jim Gomez from California Association of Health Facilities.  Thank you so much for coming today.  It was great to have you.

Jim:  My pleasure.

Topics: Payment Reform

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