As the current coronavirus (COVID-19) pandemic drags on, and with other potential pandemics/ disasters on the horizon, SNFs of all sizes in all corners of the country are finding it harder and harder to attract qualified full-time employees, and retain them over time. Not surprisingly, clinical, accounting and financial implications of this are profound. So, how do you endeavor to maintain a full-time employee base, solidify your facility’s finances and provide optimal resident care in the process?
In this blog, we offer four accounting and financial strategies to help you cope with the crisis and ensure financial stability as it continues to evolve.
Within a few short months of its onset, COVID-19 put many SNFs in shaky financial positions as they scrambled to meet numerous obligations (including payroll for full-time and contract staff) and ensure adequate cash flow. Yet, those facilities, like all facilities, still needed qualified employees to serve residents, even as financial forecasts darkened. As we move forward, that need will grow for SNFs during times of stability, and especially in future crisis situations.
Therefore, consider some accounting and financial measures to help ensure your SNF will have adequate resources in the months – and possibly years – ahead:
Setting cash aside. To the extent possible, your facility should consider prudent ways to set cash aside in the event of a future cash crunch. That could prove difficult, but there are four good reasons to do so:
It’s a hedge against uncertainties
It may be necessary to help fund bonuses for full-time staff in order to keep them on board
It could be used to fund personal protective equipment (PPE) and medical supply purchases as costs rise
It could potentially help offset recruiting and payroll costs
Developing tighter budgets in areas beyond PPE and medical supplies. The COVID-19 crisis caused a surge in PPE and associated medical supply costs. Costs could likely continue to rise in the future—and your facility needs this equipment. Making sure you have it could entail cost-cutting in other areas. For now, be sure you properly track all purchases in order to utilize CARES Act stimulus funds properly. You may need to explore new vendors that you haven’t previously worked with to determine potential cost savings they could offer.
Lowering or eliminating distributions to executives.
Devising policies and strategies around offsetting MDS assessment suspensions. In the wake of COVID-19, CMS formally suspended MDS assessments, which substantially impacts a SNF’s ability to process billings and receive payments. While these suspensions are expected to be temporary, how will your facility deal with them in the event this happens again?
Do you have questions about managing expenses for uncertain occupancy levels for your long-term post-acute care organization, or other accounting challenges? Call Richter’s healthcare accounting professionals at 866-806-0799 to schedule a free consultation.
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