Terry Skaggs

Terry Skaggs

Chief Financial Officer, Wells Health Systems

Chair, Kentucky Association of Health Care Facilities



Leadership style: Assemble a team that brings all perspectives to the table.  I have used this quote before, “Never doubt that a small group of thoughtful people can change the world.”

Mentors: When I entered this profession, John Vinson, Sr. was a strong influence on my professional development.  For the past 25 years, I have worked with an amazing group of individuals who are my business partners and my mentors, such as Jack Wells, Jean Wells, Greg Wells and Janine Lehman.  You won’t find a better team that brings all perspectives to the table.

Dream job as a child: I was always a math whiz, so accounting was always the path that I set my sights on.

Book on nightstand: “Killing the SS” by Bill O’Reilly (Henry Holt & Co.)  I have enjoyed this series of books.  I also read everything by John Grisham.

Hobbies: Golf


Medical News: Looking back on the past year, how has the healthcare system changed and what is your industry/sector doing to adapt to the changing environment?

Terry Skaggs: Three years ago, the Centers for Medicare and Medicaid Services began implementing new Requirements of Participation for skilled nursing facilities.  This past year was the final year of the phase-in of those requirements placing an increased regulatory burden on providers.

Associations, such as the Kentucky Association of Health Care Facilities (KAHCF), have provided focused education to assist providers with the policy development and implementation of the new requirements.  As a result of these new requirements, new survey processes and protocols were developed and implemented.  KAHCF is keeping member providers informed of survey results and trends as they adapt to the new processes and protocols.

This year, CMS announced, in its Final Rule for 2018, that sweeping payment changes are to be implemented in the skilled nursing sector beginning October 1, 2019.  This is the most comprehensive change to the payment methodology used for skilled nursing services in the past thirty years.

Kentucky Association of Health Care Facilities (KAHCF) has already begun the education process to assist our members to understand the complexity of the changes and to be prepared to implement them within the next year.

Medicare and Managed Care continue to push for shorter lengths of stay in skilled care settings.  This push has resulted in a shorter skilled stay and has significantly lowered overall utilization in our facilities.

At both the federal and state levels, we face continued challenges to funding of Medicare and Medicaid for skilled nursing services. While the Requirements of Participation place greater emphasis on person centered care and quality outcomes, legislators continually scrutinize government funding for these services looking for ways to reduce spending.

Our industry continues to educate decision makers on the quality and value of our services justifying the need for adequate funding to maintain those services.

MN: What are the biggest challenges the long-term care/aging care sector face in Kentucky?  How can we overcome those challenges?

TS: Inadequate Medicaid funding for skilled nursing facilities continues to be one of our greatest challenges.  Over the past five years, Medicaid rates for skilled nursing services have risen 0.5 percent (0.1 percent per year in each of the five years).  During that time, cumulative inflation in our sector has risen by 12.1 percent.

Due to a lack of meaningful tort reform in Kentucky and the predatory litigious environment created for nursing facilities, as a result, our Commonwealth has one of the highest professional liability costs in the nation.  Litigation and subsequent double-digit premium cost increases have caused some providers in our state to forego insurance coverage.

Providers have proposed methods for increasing Medicaid funding in Kentucky without the use of general fund dollars.  The proposal would draw down additional federal funding to help ease some of the burden created by these inadequate funding periods.  Further, liability costs have reached a critical point.   Meaningful steps toward tort reform are past due.

Our sector faces significant work force shortages.  Decreased funding is also making it difficult to attract and retain a quality work force where wage increases are restrained due to low reimbursement increases.  Providers are having greater difficulty attracting quality, qualified workers into our sector.  Work force shortages have created higher demands for wage and benefits in a time when funding is being limited or decreased.

KAHCF has placed an emphasis on assisting members with recruiting techniques and options to attract the qualified staff for our sector.  We must be able to pay for that qualified staff and adequate funding is necessary.

Declining utilization is requiring providers to become more innovative in their care delivery.  Experts tell us that the wave of the baby boomers will begin hitting in 2020.  Facilities must adapt in order to survive this period of decline.

MN: As Chairman of KAHCF, what are your top priorities for 2019?

TS: Assuring adequate Medicaid funding must be a top priority in 2019.  Providers cannot continue to operate on inadequate funding.  Work force challenges and liability insurance costs demand more of our resources.  Those resources must be adequate to provide quality services.

A second priority is taking the next steps to tort reform.  The 2019 legislative session must address meaningful and adequate steps to ensure that Kentucky does not continue to be open to predatory litigation.

Third, assuring that the regulatory process is fair and consistent for all providers.

Lastly, taking steps to identify ways for providers to recruit and retain a quality workforce.


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