The benefits to developing senior housing in an “essential community” abound: potentially cheaper land prices, increased quiet enjoyment for the residents, and reduced congestion. But there is another incentive you may not have considered: attaining federal recognition as an “essential community provider” under federal regulation.

Essential Community Providers

While underserved communities of elderly are in need of housing in low income areas (or areas where there is a shortage of health professionals and care facilities) an opportunity is presented to investors to qualify as essential community providers to secure the support of the federal government in its efforts to expand coverage under the ACA.

The Center for Consumer Information and Insurance Oversight (CCIIO) recently prepared its DRAFT 2016 Letter to issuers in the federally-facilitated marketplaces. In addition to calling for comments or suggesting improvements to the draft federal regulations, the proposals are flush with incentives to promote an influx of healthcare facilities to what the federal government has dubbed “Low-Income and Health Professional Shortage Area Zip Code Listings” as part of the expanding database of essential community providers (ECP). Check out their FAQs here.

Local, State, and Federal Information Mean Value

While determining the location of a future senior living facility, a smart developer would navigate this emerging program. Furthermore, a prudent investor may elect to build based upon the demands of housing for seniors comparable to other supply of existing facilities, the needs of both residents in the community and the municipal government, as well as considerations in selecting applicable federal and state incentive packages.

To further support the last contention, the Centers for Medicare & Medicaid Services (CMS) posted informationrelating to quality of care provided by physician group practices, Accountable Care Organizations (ACOs) and hospitals. These data are available on Physician Compare, Hospital Compare, and

These considerations may give the investor the potential first glance at what metrics the government uses in furtherance of providing the best healthcare possible to our country’s seniors. The Centers for Medicare & Medicaid Services report that Medicare and Medicaid enrollment shows room for improvement in its 2013 report, positing that “In the fourth quarter of 2012, 15,6431 nursing homes participated in the Medicare and Medicaid programs. Except for a slight increase between 2010 and 2011, the number of nursing homes participating in these programs has decreased steadily since 2003. From 2008 to 2012, the number of nursing homes decreased by 0.7%, somewhat slower than the decline in the prior five years (3.2%). Over the past five years, 14 states have had an increase in the number of nursing homes, and there has been no net change in an additional eight states.” This report can be viewed here.

Talk to Cambridge Realty Capital today to discuss how to maneuver these market metrics so that private investments mesh with the current healthcare market and potential unexplored areas for development.

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