On Independence Day, the “Big Beautiful Bill” was signed into law. The BBB will impact Medicaid in an effort to cut Medicaid spending by almost $1 Trillion in 10 years.
Most of you have read about the impact to the nursing home community. The one “Gold Star” strictly from a cost perspective is the staffing mandate which has been delayed. Many nursing homes feared bankruptcies or just shuttering the doors, especially in rural parts of the country if the staffing mandate was enacted sooner. Now we have an “updated” set of fears including:
- 27% of nursing homes believe this bill will force them to close.
- Administrative changes include Medicaid (re)-eligibility from every 12 months to every 6 months. Retroactive reimbursement is reduced from 90 days to 60. Tighter controls on the state’s ability to increase Provider Taxes that could potentially offset the Medicaid cuts. What type of impact will this result? Not a good one.
- 55% suggest they will provide fewer Medicaid beds which will impact “bed supply” (and what will this do to the hospital’s ability to discharge)?
- The Silver Tsunami is coming with 27.1 million people aged 75+ in 2024 to a projected 34.2 million by just 2030.
I found the research from KFF to be very helpful to better understand the full financial impact of this bill on Medicaid services. You can read it here:
Today’s Next Step
Thankfully just as this bill starts to have a negative financial impact on services, 2 opportunities continue to emerge as potential lifelines. Additionally, nursing homes always seem to be in some sort of financial crisis, but they continue to stay open and deliver quality care because they are innovative – and lets’ face it -demand for services is only expanding.
- Artificial Intelligence is becoming mainstream. Lots of great nursing home operators have teamed with brilliant technologists and advanced technology platforms to create products and services to serve and support our aging population. We have robots, AI “companionship,” reinforced medication management, wound care prevention and other predictive care analytics, better RCM tools and so many more innovations that will augment care staff, improve care – and reduce overall costs.
- Maturity in value-based care models. While less than 20% of nursing homes participate in some sort of value-based care model today, it is expanding. At this summer’s Zimmet Conference, Gov. Mark Parkinson, the recently retired President of the AHCA, suggested that in order to be successful going forward, operators should get involved with a value based care model. Interestingly, he also suggested getting involved with other care models such as PACE. Message me if you want a copy of his presentation.
- Finally, get “community active” – every health care provider and institution is going to be impacted in some way with the BBB. If your community hasn’t done this already, round the health care community up and begin the dialogue on how you can improve your partnerships, services, care models and support for one another. In particular, rural hospitals are going to have significant cuts all while nursing homes reduce Medicaid beds. Start talking about these concerns now-together.
- Honorable Mention: I attended my first PACE National Association Convention this year and left with a profound interest in the PACE model. It’s unfortunate that only 83,000 recipients use a PACE program today. Where the Silver Tsunami crashes into the BBB, PACE seems like a great opportunity for the nursing home operator to also get involved.
SNF Metrics (www.snfmetrics.com) provides nursing home operators with data-driven insights to improve care and reduce costs. We constantly expand and grow our insights to meet the demands of today—especially now with the BBB. Our most popular platform, SNF Compass, is the standard for data-driven nursing home operators just like you. Message me to learn more.
El Harris
410-808-7194
