COVID‐19 is disrupting referral patterns to skilled nursing facilities, resulting in a significant revenue shortfall and cash burn that the fragile skilled nursing ecosystem may not be able to endure, according to data released last week by professional services firm CliftonLarsonAllen. This revenue shortfall could result in a $6 billion to $9 billion negative cash impact, putting up to 70% of SNFs in a negative cash position within the next 90 days, the firm reported.
Those figures don’t include the increased cost of personal protective equipment or labor, which also will have a negative effect on liquidity, CLA Principal and Senior Living Leader Cory Rutledge said.
CLA developed the data set using more than 10 billion data points on skilled nursing operations and finance. The assessment includes more than 14,000 SNFs from across the country and incorporates multiple public data sources, as well as several proprietary calculations, algorithms and connections, Rutledge told McKnight’s.
He pointed to several programs available to SNFs that can improve revenue access during this challenging time. Options include the Small Business Administration’s Paycheck Protection Program, loan opportunities included in Title IV of the CARES Act, the Medicare Accelerated and Advance Payment Program and various state-specific relief efforts.
“We recommend that facilities explore the relief opportunities available to them and consider utilizing those relief opportunities to help with the cash burn that many skilled nursing facilities are facing,” Rutledge said. He noted however, that although funds from the federal government’s stimulus reportedly are on the way, it’s only one item that will help operators weather the liquidity storm.
“Other strategies may also need to be pursued to maintain financial health during these challenging times,” he said.
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