A CPA Firm Can Be Your Nursing Home’s Strongest Ally in Strategic Planning
Nursing homes are facing unrivaled financial and operational challenges. According to a survey by the American Health Care Association (AHCA) and the National Center for Assisted Living (NCAL), COVID-19 had caused losses in revenue for 97% of nursing homes by August of 2020, and 55% were operating at a loss. The costs of testing and infection control are high, with the cost of PPE supplies alone up by 90%. As of December, 20.6% of nursing homes were affected by staffing shortages for aides, such as medication technicians, CNAs, and nursing aides. These significant challenges prove that now is the time to leverage your nursing home’s professional relationships to the fullest. In terms of strategic planning, a CPA firm is an ally you need in your corner.
Because I work with many nursing homes, I understand the percentages above are not just statistical data. While they may appear as simple numbers on the surface, underlyingly, they are real issues affecting the care of your clients, the well-being of your staff, and the sustainability of your organization. When helping my clients, I use benchmarking, trend analysis, and practical industry experience, as well as regulatory and legislative knowledge to help them apply best practices for maintaining financial health and operational efficiency.
Taking Advantage of Pandemic Relief
It’s essential for your management team to understand your nursing home’s eligibility, requirements, and potential benefits through COVID-19-related federal and state funding options. The right CPA firm can help you do that. Your organization may benefit from the latest phase of HHS funding. Nursing homes that received assistance through the Provider Relief Fund (PRF) also need to understand their compliance and reporting requirements. Although the first and second waves of the Paycheck Protection Program (PPP) have been exhausted, your CPA can help you ensure maximum loan forgiveness. Claiming the Employee Retention Credit (ERC) for 2020 or 2021 may also provide significant savings.
New telehealth or “virtual” visitation technology may be needed or required based on state law to enable residents to conduct virtual visits with healthcare providers and family members. Massachusetts recently revised the Commonwealth’s Medicaid telehealth policy, which, as of January 2021, changed telehealth reimbursements as well. Navigating CMS regulations and state laws can be overwhelming. Seeking help from your CPA firm can help you ensure your nursing home will receive maximum telehealth reimbursements.
Improving Your Financial Health
Improving your nursing home’s financial health starts with an accurate analysis of your organization’s financial standing. Right now, nursing homes have to be increasingly vigilant in monitoring cash reserves and expenses and managing lines of credit. A CPA firm can provide revenue cycle reviews to help you assess whether your billing procedures are supporting your financial sustainability. They can also assist with the cost accounting analyses and help you consider profit and loss, cash flow, and key covenant requirements, as you work together on budgeting, forecasting, and projections. To ensure you understand how to maximize and accelerate your CMS reimbursements, seek the help of professionals for your compliance filings, such as Medicare and Medicaid cost reports.
Partnering with another organization may be a beneficial financial opportunity for your nursing home. If your nursing home plans to merge with or acquire other facilities,you can ask your CPA firm to provide services and advisory related to contract review and negotiation and financial due diligence. When working with my nursing home clients throughout M&A, I often examine alternative sites, including specialty units, advanced certifications, changes in services and licensed bed capacity, and discontinued operations.
Improving Your Operational Efficiency
Having a CPA firm perform governance structure and operational reviews can show you where your strengths and weaknesses are. In turn, you can uncover potential areas for performance, efficiency, or process improvements that may improve your nursing home’s efficiency and profitably. These types of reviews give you a clearer picture of what your organization’s short- and long-term goals should be.
Since the onset of the pandemic, many of those goals may have shifted toward digital transformation. Your nursing home may benefit from a CPA firm’s analysis of your accounting software and computer systems. Unfortunately, the pandemic has also created an opportune atmosphere for increased cybersecurity threats, so nursing homes have to boost their defenses against hackers, malware, and data breach and loss issues. A CPA firm can offer best practices for protecting your data and improving the efficiency of your operations, and they can offer insights on the potential return on investment for leveraging certain software and technology.
Contact Livingston & Haynes
For-profit, not-for-profit, public, and private organizations alike need efficient clinical and billing operations, a comprehensive understanding of legislative and regulatory developments, and timely compliance to achieve financial success, especially during the COVID-19 pandemic.
My team at L&H is made of healthcare industry leaders. We are industry-savvy and help nursing homes develop strategies that focus on every aspect of their financial and operational health. If you’re ready to take the next step, contact me today. I look forward to working with your organization.
by Maria Bunker, CPA
Maria Bunker, CPA, became a partner at Livingston & Haynes in 2017. She specializes in audits and tax planning and has worked with clients across a wide range of industries.