This new 'opportunity' might have a bad aftertaste

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John O'Connor
John O'Connor

Here's one of the new dirty little secrets about skilled care facilities: More of them don't want to deal with residents once their Medicare eligibility dries up.

To understand why, consider basic economics. Medicare typically pays skilled operators nearly $14,000 a month for services, whereas Medicaid rates (which vary greatly across states) often tend to be about half as much, and can be less.

So in the grand tradition of out-with-the-old, in-with-the-new, many SNFs are pruning as never before. It's not uncommon these days to see facilities where residents routinely arrive and depart in less than two weeks.

Yet many of those discharged residents are a far cry from being fully independent. And that's the good news. For if you happen to be a senior living operator in close proximity to such a SNF and are willing to accept Medicaid payments, you probably won't have too much trouble keeping heads in beds. And who doesn't like a full building?

But we already are starting to see some signs of a troubled marriage here. It turns out that in their zeal to remove Medicare-ineligible residents, many of these skilled care operators are not being terribly picky about their new business partners. And we are already hearing reports of residents being mistreated or worse at unlicensed senior living settings.

Relatively speaking, it is probably only a few bad apples causing most of the trouble. But the saying is not “a few bad apples is nothing to worry about.” It's “a few bad apples spoil the bunch.”

In 1986, most nursing home operators similarly argued the field's shortcomings were limited to a few bad apples. But that didn't stop a federal nursing home law from being enacted one year later, did it?

Am I suggesting senior living is on the same path? Not exactly. But as much as nobody in senior living wants federal rules, some uncomfortable realities should be kept in mind.

One is that there may be as many as 40,000 senior living operators in existence. Another is that more than a million mostly older, mostly frail Americans are being cared for in these communities. Finally, there is no unified oversight agency for this multi-billion dollar business. Instead, it largely falls on each state to police the sector.

For those without skin in the game, those are hardly conditions for preserving the status quo.

But perhaps most troubling of all is this: the field flat-out refuses to hold its bad actors accountable. When is the last time you heard any person in this sector publicly say that clearly unscrupulous actions by another operator are unacceptable? It does occasionally happen, but not nearly as often as it should.

Is the silence because there is simply no awareness of dubious behavior elsewhere? In a sector where mystery shopping is a way of life?

Look, I get it. Nobody wants to be a snitch. But if this field is not going to hold its bad actors accountable, then you can bet that it's just a matter of time until someone else steps in. And as stories about unlicensed operators robbing and abusing residents continue to escalate — which they will — you can bet that more consumers, lawmakers and regulators will insist on greater oversight.

But don't take my word for it. Just ask that SNF down the street sending you all those new residents if such things are possible.

John O'Connor is editorial director of McKnight's Senior Living. Email him at

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