What’s Ahead for Skilled Nursing Facilities: Pressures and Possibilities
Skilled Nursing Facilities (SNFs) have played a vital role in caring for individuals with complicated needs; however, the industry is facing intense pressure. Factors such as rising costs, staffing shortages, shifting payment models, and regulatory scrutiny are making it challenging to stay ahead. With the rise of new opportunities, SNFs must keep up with key trends and adapt strategically to remain resilient.
1. Value-Based Payments
Both Medicare and Medicaid are continuing to switch towards value-based payment (VBP). This mode of payment provides providers with performance rewards for achieving quality outcomes, such as fewer hospital readmissions and higher payment satisfaction. SNFs that follow this model prioritize quality, track key metrics, and have dedicated staff members for improvement.
2. Medicare Advantage and Its Challenges
Even though Medicare Advantage (MA) plans cover more seniors than traditional Medicare. However, they come with lower payments, shorter stays, and tougher preauthorization processes. It is crucial for SNFs to build strong referral relationships and work closely with MA plans to get better rates, especially if they are capable of showing strong outcomes and high star ratings.
3. Medicaid Switches to PDPM
Most states are now shifting Medicaid Reimbursement to the Patient-Driven Payment Model (PDPM), which ultimately results in lower payments. It would be ideal for SNFs to begin preparing now by learning from peers in states that have already made the switch. This can help avoid any financial surprises and ensure smooth adoption.
4. Tighten Up PBJ Reporting
Staffing shortages remain a problem, bringing the accurate Payroll-Based Journal (PBJ) under great scrutiny. A facility’s star rating can easily be wiped out by missing deadlines or submitting inaccurate data, which can impact contracts, referrals, and Medicaid pay. To tackle this, SNFs should build internal systems and use specialized software to ensure timely and accurate PBJ submissions.
5. More Services to Boost Revenue
To fight against tight margins, many SNFs are exploring more services like short-term rehab, memory care, ventilator support, or dialysis. To do this effectively, SNFs should assess community needs, potential competitors, reimbursement rates, and operational requirements before launching something new. For this, a market study or third-party advisor can help evaluate feasibility and ROI.
6. Consider I-SNP Participation
Institutional Special Needs Plans (I-SNPs) offer another revenue stream, which is designed specifically for long-term care residents. These plans focus more on preventative care and also provide extra perks like on-site dental or beauty services. The facilities that are able to meet quality benchmarks are likely to receive bonus payments, and participation often improves long-stay outcomes.
Without a doubt, SNFs are navigating through various challenges in a fast-changing environment. With the help of a clear focus on quality and a strategic approach to new opportunities, they can adapt, stay competitive, and thrive in the coming years.
Shayne Bevilacqua, MBA, TRA, is a licensed insurance agent and the Principal of Professional Liability Insurance Group (PLIG) and Bevilacqua Insurance Group (BIG). He works with organizations across healthcare and other professional sectors to align risk management strategies with industry shifts, helping clients stay protected and positioned for long-term success.
