What Keeps a CFO Awake At Night?
After you get past – who cares?, it is sometimes insightful to understand what worries a CFO. Believe it or not, we CFOs are not as optimistic, upbeat and dynamic as our daily persona suggests. Sometimes, when we are alone, we are skeptical, conservative and downright cynical. Those attributes happen to come in quite handy when you are charged with evaluating the effects of monetary policy, government regulation and the overall economy on the financial performance of our Company. Unfortunately, with all the “bumps” in the night created recently by those aforementioned forces it is a wonder my eyes can close. As most of you are aware, RehabVisions has stand-alone Medicare-certified clinics, contracts with Hospitals, contracts with SNFs, contracts with HHAs, and has a travel-staffing subsidiary. Each of those areas has their own unique challenges and impacts. Since we are just past mid-year, beginning to plan for our forthcoming fiscal year, I thought I would jot down two to three major trends or concerns affecting each area of our Company for you to ponder.
Clinics: (1) Quality measures beginning to factor into reimbursement and evidence-based medicine becoming a standard versus suggested protocol; (2) Development of ACO organizations and how outpatient clinics factor into what is a Hospital/Physician-driven model; (3) BC/BS Kansas trend of reimbursement differentials between Therapist and Assistant provided treatment.
Hospitals: (1) Direct Supervision requirement for provider-based outpatient therapy departments (particularly off-campus facilities); (2) Increasing level of self-pay customers (and higher deductible/co-insurance plans for insured patients) – consumer vs. institutional (insurance company) payment; (3) Reimbursement pressure – MPPR, contingent quality-based payments, readmission penalties, payer visit limits, therapy caps, daily per diem limits from insurers.
SNFs: (1) SNF PPS 2012 – continued dis-incentive for clinical student training, reduction in overall market basket and narrowing of assessment windows (3-day no therapy discharge and 7-day COT assessment); (2) Focused congressional and legislative attention – will we see a replay of 1997 where reimbursement was eviscerated?; (3) High volume urban “abuses” impacting lower volume rural viability (throwing the baby out with the bath water).
HHAs: (1) Congressional scrutiny of therapy’s ability to subjectively modify treatment intensity; (2) High profile abuses of HHA reimbursement model (Florida); (3) Increasing sophistication and consolidation of HHA’s and resulting benchmarking of therapy visit ranges against CMS data.
Travel Staffing: (1) Proliferation of Vendor Management Companies (many of whom are also competitors in recruiting); (2) Changes in SNF reimbursement creating 7-day/week therapist demand (modified travel schedules); (3) economic uncertainty continuing to create a permanent staffing bias.
In the 28 years we’ve been in business, scenarios such as these have come and gone and we’ve weathered the storms, as I know we will in this case. I welcome your comments and thoughts on where you believe each of these are moving.