The Association Between Facility Affiliations and Revenue Generation in Skilled Nursing Facilities – An Exploratory Study

Figures & data

Table 1 Skilled Nursing Facility Revenue Comparison per Time Period

	1980s–1990s	1990s–2011	2013–2023
Primary Revenue Sources	Medicare & Medicaid	Medicare, Medicaid, and Managed Care Companies	Managed Care through Medicare, Medicaid, and Other Sources
Timing of Medicare Part A Payment	Retrospective Payment of Costs	Prospective Payment Based on Minimum Data Set (MDS) Assessment	Bundled Payment Arrangements (ACOs via BPCIs)
Medicare Part A Payment Determination Method	Fee-for Service and Cost Reimbursement and Annual Cost Report Settlement	Resource Utilization Group (RUG System) Using Minimum Data Set (MDS) Assessment for 5 Periods within the 100-Day Stay: RUG III – 44 groups (1998) RUG IV – 53 groups (2011) – Accounted for need for higher reimbursement for medically complex.	Bundled Payments for Care Initiative (BCPI) for 48 clinical episodes of care: Model 1 (Phase 1-Preparation Period) (Applications in 2011; program from 2013 to 2016) – lump sums for 5 common medical conditions (for hospitals only) using 2013 inpatient prospective payment. Organizations phased into Model 2 in 2014. Model 2–3 (Start of Phase 2) (2015–2018) –retrospective fee-for-services payment reconciled to bundled payment target amount for both inpatient and post-acute services for episode of care up to 90 days. Model 4 (In Phase 2) – single prospective bundled payment to host with dissemination to other providers/services for one episode of care, after separate service providers filed claims to Medicare (2018 – Current)
	LTC Facility Directly	LTC Facility Directly	Host Organization(s) – Accountable Care Organizations (ACOs) or medical networks
Payment Review	Retrospective	Prospective & Concurrent	Prospective, Concurrent, and Retrospective (for Outliers)
Effective & Common Management Strategies	Documentation QA & Standards Larger Company with Adequate Technology, Billing, and Training Resources Skilled Therapy (PT, OT, and SLP) Utilization Management Denials Management including Response to Request for More Information & Administrative Law Judge Hearings	Clinical Assessment Accuracy and Capturing Skilled Therapy and Nursing Need in the MDS Assessment Clinical Pathways for Coordinated Interprofessional Standards of Practice for Stage of Skilled Care Increasing Capability of Managing and Treating the Clinically Complex Patients/Residents to Prevent Hospital Readmission Case Mix Management within SNF and NF Medicare Part B Therapy Cap Management	Enhanced Relationships/Partnerships between host organizations and SNF Facilities Development and expansion of Health Information Exchanges (HIEs), fostering sharing protected beneficiary medical information. Multi-organizational and interprofessional clinical assessments Multi-organization care coordinators critical
Customary LTC Margins	6 to 11%	2.5 to 4%	−3.0 to −5.0%

Table 2 Descriptive Statistics

	Minimum	Maximum	Mean	Std. Deviation
DEPENDENT VARIABLES
Net Patient Revenue per Bed (LN)	8.77	13.73	11.28	0.44
Net Patient Revenue per Discharge (LN)	5.94	14.50	10.67	0.67
FACILITY AFFILIATIONS
ACO Affiliations	0	1	0.033	0.18
HIE Affiliation	0	1	0.16	0.36
BPCI Participant (1 = BPCI participant)	0	1	0.034	0.18
FACILITY ATTRIBUTES
Co-Located at a Hospital (1 = Co-located)	0	1	0.02	0.12
Rural Location (1 = Rural)	0	1	0.18	0.38
Govt or NFP Ownership (1 = Gov’t or NFP owned)	0	1	0.29	0.45
Network Facility (1 = Network Affiliated)	0	1	0.86	0.35
Midwest Region	0	1	0.33	0.47
Southeast Region	0	1	0.24	0.43
Southwest Region	0	1	0.11	0.32
West Region	0	1	0.13	0.34
Northeast Region	0	1	0.19	0.39
FACILITY PERFORMANCE
Overall Rating	1	5	2.83	1.41
Total Nurse Staffing Hours per Resident per Day	0	14.36	3.66	0.82
Percent Days Medicare	0.00%	99.90%	0.12	0.11
Percent Days Medicaid	0.00%	99.60%	0.55	0.26
Bed Utilization	0.30%	100.00%	0.71	0.15
Average Length of Stay	1	5623	182.15	196.14
Average Daily Census	0	6319	82.66	75.83
Number of FTE Employees	0	5757	85.46	77.02
PATIENT CHARACTERISTICS
Average Age	47	92	77.91	4.64
Average HCC Score	1.15	8.26	2.90	0.67
Average Number of Chronic Conditions	3	10	7.02	0.69

Note: N = 13,447.

Table 3 Multiple Regression Analysis – Analysis of Net Patient Revenue per Bed

Analysis of Net Patient Revenue per Bed	ACO Affiliation			HIE Affiliation			BPCI Participant
Independent Variables	β	S.E.	Sig	β	S.E.	Sig	β	S.E.	Sig
	N = 13,447, Adj R^2 = 67.1%			N = 13,447, Adj R^2 = 67.1%			N = 13,447, Adj R^2 = 67.1%
FACILITY AFFILIATIONS
ACO Affiliations	−0.073	0.016	<0.001
HIE Affiliation				0.012	0.006	0.051
BPCI Participant (1 = BPCI participant)							0.032	0.012	0.008
FACILITY ATTRIBUTES
Co-Located at a Hospital (1 = Co-located)	0.033	0.018	0.067	0.022	0.018	0.227	0.024	0.018	0.182
Rural Location (1 = Rural)	−0.053	0.006	<0.001	−0.053	0.006	<0.001	−0.052	0.006	<0.001
Govt or NFP Ownership (1 = Gov’t or NFP owned)	0.080	0.006	<0.001	0.072	0.006	<0.001	0.072	0.006	<0.001
Network Facility (1 = Network Affiliated)	0.036	0.007	<0.001	0.032	0.007	<0.001	0.032	0.007	<0.001
Midwest Region	−0.166	0.007	<0.001	−0.165	0.007	<0.001	−0.164	0.007	<0.001
Southeast Region	−0.137	0.007	<0.001	−0.136	0.007	<0.001	−0.135	0.007	<0.001
Southwest Region	−0.259	0.009	<0.001	−0.254	0.009	<0.001	−0.254	0.009	<0.001
West Region	0.038	0.008	<0.001	0.040	0.008	<0.001	0.039	0.008	<0.001
FACILITY PERFORMANCE
Overall Rating	0.013	0.002	<0.001	0.013	0.002	<0.001	0.013	0.002	<0.001
Total Nurse Staffing Hours per Resident per Day	0.079	0.003	<0.001	0.079	0.003	<0.001	0.079	0.003	<0.001
Percent Days Medicare	0.010	0.000	<0.001	0.010	0.000	<0.001	0.010	0.000	<0.001
Percent Days Medicaid	−0.001	0.000	<0.001	−0.001	0.000	<0.001	−0.001	0.000	<0.001
Bed Utilization	0.017	0.000	<0.001	0.017	0.000	<0.001	0.017	0.000	<0.001
Average Length of Stay	0.000	0.000	<0.001	0.000	0.000	<0.001	0.000	0.000	<0.001
Average Daily Census	0.000	0.000	<0.001	0.000	0.000	<0.001	0.000	0.000	<0.001
Number of FTE Employees	0.000	0.000	<0.001	0.000	0.000	<0.001	0.000	0.000	<0.001
PATIENT CHARACTERISTICS
Average Age	0.004	0.001	<0.001	0.004	0.001	<0.001	0.004	0.001	<0.001
Average HCC Score	0.050	0.005	<0.001	0.050	0.005	<0.001	0.050	0.005	<0.001
Average Number of Chronic Conditions	−0.029	0.004	<0.001	−0.029	0.004	<0.001	−0.029	0.004	<0.001

Note: α =0.05; Northeast Region is referent region for analysis purposes.

Table 4 Multiple Regression Analysis – Analysis of Net Patient Revenue per Discharge

Analysis of Net Patient Revenue per Discharge	ACO Affiliation			HIE Affiliation			BPCI Participant
Independent Variables	β	S.E.	Sig	β	S.E.	Sig	β	S.E.	Sig
	N = 13,447, Adj R^2 = 62.5%			N = 13,447, Adj R^2 = 61.9%			N = 13,447, Adj R^2 = 62.1%
FACILITY AFFILIATIONS
ACO Affiliations	−0.282	0.021	<0.001
HIE Affiliation				−0.002	0.010	0.828
BPCI Participant (1 = BPCI participant)							−0.144	0.020	<0.001
FACILITY ATTRIBUTES
Co-Located at a Hospital (1 = Co-located)	−0.001	0.029	0.961	−0.041	0.029	0.160	−0.044	0.029	0.129
Rural Location (1 = Rural)	0.086	0.010	<0.001	0.085	0.010	<0.001	0.084	0.010	<0.001
Govt or NFP Ownership (1 = Gov’t or NFP owned)	0.132	0.009	<0.001	0.099	0.009	<0.001	0.098	0.009	<0.001
Network Facility (1 = Network Affiliated)	−0.072	0.011	<0.001	−0.086	0.011	<0.001	−0.082	0.011	<0.001
Midwest Region	−0.221	0.011	<0.001	−0.218	0.011	<0.001	−0.220	0.011	<0.001
Southeast Region	−0.154	0.011	<0.001	−0.149	0.011	<0.001	−0.153	0.011	<0.001
Southwest Region	−0.336	0.014	<0.001	−0.322	0.014	<0.001	−0.327	0.014	<0.001
West Region	0.027	0.013	0.048	0.030	0.014	0.028	0.031	0.014	0.021
FACILITY PERFORMANCE
Overall Rating	0.007	0.003	0.012	0.008	0.003	0.008	0.008	0.003	0.007
Total Nurse Staffing Hours per Resident per Day	0.055	0.005	<0.001	0.056	0.005	<0.001	0.056	0.005	<0.001
Percent Days Medicare	−0.010	0.000	<0.001	−0.010	0.000	<0.001	−0.010	0.000	<0.001
Percent Days Medicaid	0.001	0.000	<0.001	0.001	0.000	<0.001	0.001	0.000	<0.001
Bed Utilization	0.000	0.000	0.419	0.000	0.000	0.373	0.000	0.000	0.376
Average Length of Stay	0.002	0.000	<0.001	0.002	0.000	<0.001	0.002	0.000	<0.001
Average Daily Census	0.000	0.000	<0.001	0.000	0.000	<0.001	0.000	0.000	<0.001
Number of FTE Employees	0.000	0.000	<0.001	0.000	0.000	<0.001	0.000	0.000	<0.001
PATIENT CHARACTERISTICS
Average Age	0.006	0.001	<0.001	0.006	0.001	<0.001	0.006	0.001	<0.001
Average HCC Score	−0.029	0.007	<0.001	−0.029	0.007	<0.001	−0.029	0.007	<0.001
Average Number of Chronic Conditions	−0.018	0.006	0.002	−0.017	0.006	0.004	−0.017	0.006	0.003

Notes: α =0.05; Northeast Region is referent region for analysis purposes.