Healthcare Leader: Elizabeth “Betsy” Johnson: President of the Kentucky Association of Health Care Facilities



Medical News: Much of the focus of the conversation related to the Affordable Care Act (ACA) is focused on expanded Medicaid, however the program is much larger than that segment. What changes have you seen that affect the long-term care industry?

Betsy Johnson: That is an excellent question. Many of the provisions in the Affordable Care Act that impacted Kentucky’s nursing facilities already existed in some form or fashion – such as transparency and accountability, which includes disclosure of ownership, requirements for compliance programs, and information available on the Nursing Home Compare Medicare web site.

These went largely unnoticed by the public because for the most part – nursing facilities were already in compliance. Two of the main requirements in the ACA that have impacted our members is the implementation of the Payroll Based Journal (PBJ), which became mandatory on July 1, 2016. PBJ requires nursing facilities to submit direct care staff ing information to Centers for Medicare & Medicaid Services (CMS) through electronic transmission.

Based on these reports, CMS believes it will be able to track staffing tenure and turnover more accurately – and help the federal government better track quality in nursing facilities.

The other main requirement is the national check program. Since 1987, the federal government has prohibited nursing facilities from employing individuals who are convicted of crimes against residents. Kentucky state statutes and regulations have incorporated the federal requirements and requires state background checks for individuals employed in nursing facilities. Under the ACA, Kentucky received a grant to design a voluntary national background check program for nursing facility employees.

Our member nursing facilities have worked with the state Office of Inspector General to develop this program in such a way that it is “efficient, effective, and economical” as required by federal law.

MN: Do you think the long-term care should emulate other forms of Medicaid and implement managed care?

BJ: Kentucky’s price-based system, which is used to pay nursing facility services, is already “managed care,” since the costs to provide services to Kentucky’s nursing facility residents are already highly managed under the current system. When Kentucky’s current Medicaid managed care system is mentioned, it is referring to private managed care organizations who have contracted with the Commonwealth of Kentucky and are reimbursed on a capitated per-member-per-month fee. For that capitated rate, the Managed Care Organization (MCO) is incentivized to control the medical costs for the member.

The MCO does this by ensuring or encouraging the member to get preventative screenings, well-visits etc. In Kentucky’s long-term care setting, the costs of providing care to the nursing facility resident is already tightly controlled.  An individual cannot be admitted to a nursing facility and expect Medicaid to reimburse for the cost
of that care if he or she does not meet the nursing facility level of care requirements.

Medicaid only reimburses for nursing facility services if an individual meets both the financial requirements for obtaining Medicaid and the level of care requirements for obtaining nursing facility services. There is no over-utilization of nursing facility services. Additionally, the Medicaid price-based reimbursement system ensures that Medicaid’s nursing facility costs are controlled.

MN: What are the biggest challenges facing Kentucky’s long-term care community?

BJ: Increased regulation, workforce shortages, the constant threat of frivolous lawsuits, f lat reimbursement, and the increased costs associated with these things! It overwhelms me just thinking about it. Government policymakers need to work with our provider community to find solutions to these problems. The demand for long-term and short-term nursing facility services is only going to increase – we need to support our providers rather than overburden them.

MN: What areas of care can the long-term care community address that can help reduce overall Medicaid costs for the state?

BJ: Rehabilitation services. Providing rehab services in the long-term care sector is the lower cost option. Patients obtaining rehab services in long-term care hospital or in the acute care setting do so at a much higher cost. In addition, caring for patients in a nursing facility for other types of illnesses can save the state Medicaid dollars.

MN: What laws or regulations would you like Kentucky legislators to address to help make Kentucky a better place for long-term care operators?

BJ: Kentucky needs some form of tort reform. It is that simple. All of Kentucky’s bordering states have enacted some form of medical liability reform legislation. Providers are leaving Kentucky and new companies will not even consider locating in our Commonwealth because of the high cost of healthcare liability. Kentucky long-term care providers are paying $9,350.00 per bed in liability insurance – the highest of any state, per the most recent AON study.

We firmly believe that nursing facilities should be held accountable if there is actual negligence on behalf of the nursing facility.

However, in Kentucky, because of the lack of tort reform, out of state trial attorneys find it a haven for filing frivolous lawsuits against nursing facilities knowing that many will just settle rather than fight. There is a cost associated with that and it is costing money that should be going toward caring for residents not to line the pockets of out of state trial attorneys.


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