October 06, 2014
Matthew Bavolack, National Healthcare Practice Leader, Quoted in Hartford Business Journal Article, "One CT Nursing Home's Path Out of Medicaid Morass."
By Gregory Seay
Paul T. Liistro, second-generation operator of a pair of Hartford area nursing homes, is backed into a corner.
One wall is the state's anemic reimbursement rate for the Medicaid patients housed at his 120-bed Vernon Manor and 126-bed Manchester Manor homes, for which he claims to lose $25 a day per Medicaid bed. The other wall reflects the pressures of competing with assisted-living and home-care providers, plus the upward creep in property taxes, labor and health-benefit costs and other overhead for which Liistro says his business isn't being fully reimbursed.
"We are profitable,'' Liistro said of both his for-profit homes, which combined generate nearly $30 million in revenue annually. "We have been more profitable. But we're going to be less profitable this year.''
So, Liistro and brother Brian, borrowing a page from the hospitality-industry playbook, are trying a fresh tack. They have invested $5 million out of their pockets to try to reposition both nursing homes to serve the less problematic, short-term patients whose care is paid for with higher-margin Medicare coverage for seniors, insurance or other private sources.
In late September, Vernon Manor accepted the first patients into its newest private and semi-private recovery "suites'' bristling with the latest care equipment and creature comforts meant to reduce hospital readmissions while boosting patient satisfaction. The home also converted a batch of existing rooms to private suites on its upper and lower floors, ballooning the count to 23 from four.
Nursing home struggles
"In order to meet the current shortfalls which exist from the Medicaid reimbursement, providers are forced to diversify their patient-payer mix,'' said Matthew S. Bavolack, principal and healthcare practices leader at Marcum LLP in New Haven. "Without non-Medicaid patients, providers are finding it increasingly difficult to survive.''