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noting that prisons were a priority before skilled-nursing and
assisted-living facilities in some states. “Throughout the U.S.
we have not been a priority for testing from the outset of this,”
he said. “Crisis testing was for hospitals and hospital work-
ers. We are just now being listed as a priority when we are the
front lines of this crisis. And we still can’t get tests.”
at Riverdale
reconfigured
Testing costs are steep
one of its buildings
to be a dedicated
New York Gov. Andrew Cuomo mandated the state’s nurs-
COVID-19 recovery
ing homes to test employees twice a week. That level of test-
building; it’s
ing, PPE and other related expenses will cost Hebrew Home,
equipped with
adequate PPE and
which has 1,200 employees, around $200,000 a week, Rein-
specially trained
gold said. All the testing kits are provided by the state Health
staff.
Department, but facilities must pay processing costs. “That is
HEBREW HOME AT RIVERDALE Hebrew Home
an enormous financial and logistical hurdle,” he said.
Just testing staff and residents once in all 1,700 SNFs in the
U.S. would cost nearly $440 million, the AHCA estimates. It a nursing home’s bed days, and they were virtually wiped
would cost New York’s 619 SNFs nearly $34 million. When out through the first two months of the pandemic. The rest
factoring in assisted-living communities, the projected cost are long-term residents, largely financed by Medicaid, who
jumps to more than $672 million nationwide. One nursing often have higher rates of cognitive impairment.
home had spent $700,000 more than usual for cleaning, ad- Nursing homes are left with residents they largely lose
ditional staff, testing and new equipment through mid-May, money on, which has pushed them to the brink as staff-
Fulmer said. “Nursing homes will close unless the federal ing and supply costs surge, Grabowski said. “We need to
government comes in. They just can’t survive.” realign those two payers more closely with the true cost of
ProMedica, which has around 44,000 employees who providing care—it makes no sense to have a system where
care for about 30,000 patients, is paying 200 to 300 times nursing homes are forced to cross-subsidize one govern-
what it was paying for PPE prior to the pandemic, executives ment payer with another,” he said.
said. The cost of a mask has increased from around 5 cents
to more than a dollar, said Brian Jurutka, president of the Misaligned models
National Investment Center for Seniors Housing & Care. There has always been misalignment between the busi-
While the new testing requirements are reimbursed in ness model and care model of the post-acute sector, said Dr.
the SNF Medicare Part A bundle, the costs are consider- Jay LaBine, chief medical officer at naviHealth.
able. Depending on local market factors and state require- Nursing homes should be better segmented into long-
ments, the tests may cost up to $500 each and may need to term care providers or shorter-term post-acute recovery
be repeated during a stay, according to the AHCA. facilities, experts said. “The goals, criteria and surveillance
“Such testing costs quickly would erode Medicare Part A of those two environments are very different,” said Carney,
payment coverage of a stay,” the association said. adding that long-term facilities should have less of a medi-
There isn’t much slack to accommodate reduced revenue cal focus and be more sub-acute. “But we are conflicted in
and higher expenses. Margins at SNFs fell to 0.5% in 2017, what they are as a society.”
down from 0.7% in 2016, according to the Medicare Pay- Meanwhile, fewer Medicare beneficiaries are getting
ment Advisory Commission. treated by SNFs across the country. Utilization in the
While margins on the Medicare share of their business Northeast fell the most, moving from 1,675 SNF days per
have remained in the double digits for two decades, ac- 1,000 beneficiaries in 2007 to 1,177 in 2017, according to
cording to MedPAC, the average non-Medicare margin, HMP Metrics.
which includes Medicaid and private insurers, was -2.4% in Nursing homes that are predominantly dependent on
both 2016 and 2017. Medicaid reimbursement are more likely to close. They
“Frankly, a lot of nursing homes aren’t going to make it typically have lower staffing levels, are located in poorer
through this,” Reingold said. “The financial impact on us neighborhoods and change ownership more often,
and our colleagues is very significant. It will be a while be- Grabowski said.
fore post-acute care rebounds—a lot of people are not going Since June 2015, 555 U.S. nursing homes have closed,
to want to go to a nursing home.” which represents about 4% of all nursing homes, according
The nursing home industry rests on a tenuous business to a February report from LeadingAge. “They are systemat-
model, said David Grabowski, a professor at Harvard Med- ically underfunded,” he said.
ical School and healthcare policy researcher. Only about 2.6% of the $3.65 trillion that was spent on
Some are short-stay patients coming from the hospi- healthcare in 2018 was directed to government public
tal—largely Medicare beneficiaries recovering from pro- health activities, leaving communal senior-care settings
cedures like knee and hip replacements. While they are particularly vulnerable.
more lucrative, they typically only account for about 20% of Dollars have to shift, said Dr. Robyn Stone, senior vice
14 Modern Healthcare | June 8, 2020