Medicaid rates are increasing across the US, and Cambridge Senior Vice President Brent Holman-Gomez invites senior living operators to take note: Now may be the ideal time to take long-term advantage of the new infusion of funding. “Over the last couple of years, the government has made temporary stimulus payments for Medicaid providers in response to the enormous challenges presented by the COVID-19 pandemic,” Holman-Gomez stated. “While this funding helped to solve some of the emergent problems and crises created by the pandemic, its ‘stop-gap’ nature also prevented providers from being able to make long-term business decisions that might be dependent on that income.”
Senior care operators are ready to begin setting long-term goals and plan for the future again. Increases are occurring coast to coast, although each state has the ability to shape what those increases are going to look like and how they will be directed. “Some of the increases are simply making the temporary rates permanent, others are significant increases due to effects of the pandemic, inflation, and staffing needs,” Holman-Gomez remarked. The expectation is that the funding increases will be used for improvements to nursing, capital, indirect care, and quality components of Medicaid rate setting, to provide a reliable funding source for care for the elderly living in both nursing homes and assisted living facilities. Helping providers pay better wages to caregivers is a key initiative during the nationwide staffing crisis, as many facilities and agencies continue to struggle with a lack of adequate qualified staffing.
“Now that the funding is reliable, we are seeing borrowers breathe a sigh of relief and move forward on a variety of initiatives and projects,” Holman-Gomez asserted. Specifically, Cambridge borrowers are:
- Staffing for full occupancy as wage rates had diminished the ability to care for more residents.
- Expanding facilities now that they know they can pay to staff additional beds.
- Replacing a lease on the property by taking ownership with reliable mortgage payments.
- Transitioning ownership of the facility/business to operating personnel.
- Expanding service offerings for dialysis, psychiatric, and other skilled services and procedures.
- Making capital improvements.
For example, Holman-Gomez pointed out a Connecticut campus that has plans to replace variable rate mortgage debt with a lower fixed rate mortgage, something not previously possible with the temporary payment structures that responded to COVID; while an Illinois skilled nursing provider with a growing census plans to exercise his lease option to own the building, lowering his cost of using the building with a mortgage.
“The fact that Medicaid providers’ businesses have more significant and regular funding allows operating companies to take control of their own destinies within their facilities,” Holman-Gomez pointed out. “It’s a welcome advance, after the last couple of years of risking their lives and health while facing many new challenges from the pandemic and economy. When providers can plan payment for the care they provide, they can better fit their business to the ever-changing demands of healthcare and residents.”