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Senior Housing > Blog > 2015 > April

QSAP: SKILLED NURSING PROVIDERS  RECEIVE CASH REWARD FOR QUALITY SERVICE

THE GOOD NEWS is that QSAP (Quality supplemental Payment Program) incentive plan encouraged in the Affordable Care Act is working!  The intent was to encourage the formation of accountable care organizations in an effort to improve health care quality and slow the growth of health care spending. Accountable Care Organizations embody a set of healthcare providers, including primary care physicians, specialists, hospital and long term care facilities that work together collaboratively and accept collective accountability for the cost and quality of care delivered to patients.

In California Department of Public Health is partnering with California Department of Health care Services to implement this new program.  The department’s Center for Health Care Quality is assessing and scoring quality of care of skilled nursing facilities to determine scores that qualify skilled nursing facilities for supplemental payments.   Qualified participants can expect to receive payments from the $90 million dollar fund as determined April 23, 2015.  Electronic fund transfers will be received April 27, 2015.

Out of 1000 skilled nursing facilities, 363 received incentive awards for their performance.  The individual facility payments ranged from $4000 to $1.2 million, an average of $223,000.  185 facilities that qualified for improvement awards ranged from $800 to $213,000, averaging $49,000 per facility.

The scoring of the quality of care is intensive and extensive.  It covers every aspect of the operation as well as the condition of the physical plant.  The methodology of scoring is still pending.   Skilled Nursing Providers are adapting to the Culture change in long term care.  Therefore, scoring facilities for quality of care is not only based only on the physical condition of a patient or a reduction of hospital readmissions, but the “wellness” of the patient care is of prime importance.  The industry is becoming far more sophisticated and making quantum leaps.  Providers bottom line is increasing while patient care quality increases.  THE NEWS IS GOOD FOR BOTH SKILLED NURSING PROVIDERS AND FOR THE SENIOR POULATION REQUIRING LONG TERM CA

HUD LOAN CHANGES EASES AR FINANCING FOR SNF PROVIDERS

Recent changes in the language in the AR Agreements reduce confusion, clarify ambiguous statements, and speeds up the process which benefits the SNF provider in acquiring AR financing.  The earlier version of the agreement left many deals on hold because of the lack of clarity which discouraged many AR Lenders from making a commitment.  The good news is that the new language in the agreement gives providers a much better chance of obtaining AR financing.  The changes are open for public comment.  However, HUD is allowing deals to close before the end of the comment period if both parties agree to and accept the terms of the new wording.

HUD 232 CHANGES:

DEFINITION OF AR LOAN OBLIGATION   Excluded many restrictions. The new definition takes a Broad approach which requires AR Loan obligations to be directly related to the benefit of the facility.

CLARIFICATION OF EVENTS THAT TRIGGER A “CUT-OFF” By eliminating many of the reasons that would cause HUD to subordinate its interest in the AR of the provider,   the new agreement states that only defaults to the AR loan can cause the AR Lender to cease funding and trigger a cut-off time.

CLARIFICATION OF HUD AND FHA LENDER’S NOTICE AND CONSENT RIGHTS New agreement addresses specific scenarios that have caused problems in the old agreement. The new agreement makes it clear that AR advances that are over the agreed upon maximum commitment amount, but over the borrowing base formula, only require notice and not consent from the FHA Lender or HUD.

MODIFICATIONS WITHOUT CONSENT   The new agreement clarifies what modifications can be made to the AR loan documents without HUD’s consent or the consent of the FHA Lender.

These changes are significant and will make it easier for Skilled Nursing providers as well as the full spectrum of Senior Living providers to secure AR financing, a blessing for the Senior Housing Industry in this economy where demand is greater than the supply.