What are the decisions that managers of provider organizations are making right now? I had a glimpse of the situation on the “frontlines” of serving consumers with disabilities in a snapshot survey (see Illinois ID/DD/MH/SUD Community Provider Survey) conducted by five Illinois provider associations—The Arc, Community Behavioral Healthcare Association, Illinois Association For Behavioral Health, Illinois Association of Rehabilitation Facilities, and The Institute on Public Policy For People With Disabilities.
As I read the snapshot survey—a combination of clinic-based and residential provider organizations, there were two themes—the staffing effect and the financial effect. On the staffing side, 5% of the organizations had already laid off staff members. At the same time, 20% of organizations had increased hourly staff reimbursement. The rate increases for hourly staff were implemented using a wide range of criteria. Responding executives reported hourly increases between $1.00 and $5.00 per hour and $20 per day incentive payments. Some organizations were providing overtime pay for all hours worked or double pay for staff in residential settings and/or those working residents who tested positive for COVID-19. Some were using lump sum bonuses.
The pay increases reflect the stress and fear of the risks of providing residential services for consumers with disabilities. “Residential treatment programs are the most challenging. Social distancing is less available because they are a larger group of people usually with at least two people staying in each room. These programs present the greatest challenge to keep providing therapeutic services while keeping both consumers and staff healthy and safe. There are no easy answers here,” said George Braunstein, OPEN MINDS senior associate.
Executives across the country running these critical residences are using a variety of approaches to keep their services going. One example—using empty hotels to house consumers who test positive for COVID-19. Remedies Renewing Lives, which offers substance use disorder treatment and runs a 62-bed domestic violence shelter in Rockford, Illinois, is one of several health care and shelter organizations partnering with the local housing authority to put people suspected of having the virus or diagnosed with it in hotel rooms to contain the virus. This “hoteling option” can also be used for overflow at local shelters, and treatment facilities, said Gary Halbach, chief executive officer of Remedies Renewing Lives. And while it hasn’t yet been needed, it’s a relief to know it’s there, “because it’s a question of when it’s going to be needed, not if,” he added. “It’s like the wild west and it changes every day.”
This has also been a successful tactic for the Hazelden-Betty Ford Foundation, which instituted a requirement that all consumers have a “fever discharge plan” identifying a person (not public transportation) who will pick them up if they spike a fever and must be discharged. Everyone who comes onto a Hazelden Betty Ford campus gets a temperature reading. “That fever discharge plan is key to us staying open,” said Mark G. Mishek, the nonprofit’s president and chief executive officer. In January, when news of an outbreak was first heard, the organization started asking people during intake about whether they had traveled to China. Hazelden Betty Ford team members started taking everyone’s temperature on each campus a month ago, and moved all of its outpatient treatment to virtual two weeks ago. There was one incident of exposure on campus (a person who was discharged due to a fever later tested positive for COVID-19) but that was several weeks ago and no one else was affected.
One of the problematic issues related to staffing is that 61% of respondents reported being self-insured for unemployment insurance. Executives in these organizations were looking for further guidance on unemployment eligibility and clarification on whether the federal relief package will include relief for self-funded organizations.
On the financial side, not surprisingly, executives reported significant decreases in revenue. The executives I’ve spoken with during the past month provided examples of the reimbursement challenges. In some states, day programs may not be delivered by telehealth and that revenue is lost. Residential provider organizations for children report that they aren’t being reimbursed for educational services that are delivered virtually. Some executives spoke of high no-show rates for services even when offered via telehealth.
But compounding the revenue issue is the cash situation. 32% of organizations reported having less than 30 days of cash on hand, 34% do not have access to a line of credit, and 34% reported that they rely on Medicaid (including waiver) funding for at least 80% of their overall agency budgets.
What are the short-term solutions to these financial problems? My colleague, OPEN MINDS Senior Associate Ken Anderson, suggested taking proposals directly to health plan managers to identify workable solutions to caring for consumers with complex needs. He gave an example—a short-term, cost-based contract that would allow an organization to address immediate cash flow struggles.
On the system level in Illinois, public health professionals are researching all options to keep safety net providers open including increased rates (see CMS Section 1135 Waiver Flexibilities – Coronavirus Disease 2019) and a direct payment option from Medicaid managed care organizations (MCOs), said Sara Howe, chief executive officer, Illinois Association for Behavioral Health. “There’s a growing chorus from people, a drumbeat we’re hearing that the safety nets have to be saved.”
The direct billing option, which has been discussed with the state’s Medicaid team and the department of health and human services, would—in essence—require MCOs to send the unused budgeted amount allocated for provider organizations to the state, which would pay provider organizations directly. If the payment model allocated $5,000 per day to a provider organization that started billing $3,000 per day in March, due to COVID-related restrictions, the remaining $2,000 would be paid through the state “to make providers whole through this crisis,” Ms. Howe explained. A proposal has been drafted that will be sent to the Medicaid office as soon as possible. It makes sense, argues Ms. Howe, because the state allocates the funds to MCOs to maintain an adequate network, which is now in jeopardy as outlined in the Illinois ID/DD/MH/SUD Community Provider Survey.
The new small business administration loan is another tool that Ms. Howe encourages provider organizations to consider. It forgives money budgeted for staff and benefits. The portal for the loan program, created by the federal government, opened today (see Coronavirus (COVID-19): Small Business Guidance & Loan Resources). It is, she notes, available to all small businesses “so I’ve told providers that the local pizza place might be in line with you. A lot of these guys are small businesses, but they don’t look at themselves that way.”
Like any snapshot, this data is a moment in time. But the results demonstrate the challenges ahead for organizations serving this vulnerable consumer population—and a need for action by executive teams and by our elected officials. For more on leadership in a time of crisis, check out these resources from the OPEN MINDS Circle Library:
- The Pandemic Emergency: Effects On Community-Based Organizations
- Leadership—The Other Talent Shortage
- Success Through Leveraging The Skills Of Your Team – Leadership Advice From Emergence Health Network’s Kristi Daugherty
- Is ‘Fear Of Failure’ Your CEO’s Leadership Challenge?
- Meta-Leadership – A New & Tall Order
- Strategic Decisionmaking In Times Of Crisis: Lee & Longstreet On The Final Day At Gettysburg
- During A Cash Flow Crunch, Revenue Cycle Management Should Be On Autopilot
- Strategy In Uncertain Times: Planning Resources For The New Normal
- A Revenue Cycle Management Primer
- Best Practices In Financial Optimization: A Provider Checklist For Maximizing Revenue
As you navigate cash flow and other pressing challenges in a time of crisis, join us April 16 for the Short-Term Cash Management – To Assuring Continued Operations In Times Of Disruption: Overview & Introduction web briefing with OPEN MINDS Senior Associate Ken Carr. It’s part of our new program for OPEN MINDS Circle elite members—The OPEN MINDS Executive Blueprint For Crisis Management – Building Organizational Sustainability & Success In A Disrupted Health & Human Service Market.