How BMA evaluates prospective Medicaid Wavier states and sites.
Part one of this two part series laid the foundation for affordable senior living. This second and final part is based on a discussion I had with Rod Burkett, CEO and President of BMA Management and Wayne Smallwood the Executive Director of the Affordable Assisted Living Coalition at ALFA about how they go about selecting states and sites for new development.
BMA Management is based in Bradley Illinois. They are number 16 on the ALFA list of
largest assisted living companies operating 37 affordable assisted living communities serving more than 3,600 residents. Approximately two thirds of all their residents receive some level of subsidy. Their typical community size is 100-120 units with the smallest being 40 units and largest 150 + 32 memory care. What makes the BMA model particularly attractive is that, while they are not offering Ritz style luxury assisted living, these are not stripped down, minimalist assisted living communities. They are very nice; where the parents of BMA executives and other family members (the ones they like) live. They provide a robust quality of life experience. A great example is an article I published a year or so ago about The Harlem Shake Video filmed at Heritage Woods of Sterling.
Six Trigger Points
Rod, Wayne and I spent the vast majority of our time talking about the six trigger points they use when selecting new sites. I questioned their wisdom in sharing their insights and their immediate response was that there is enough business to go around for everyone. Here they are:
- Daily Rate – The very first thing they look at is the daily rate paid through the state waiver program. It has to be sufficient to support a quality program and service the building debt.
- Who Are The Gate Keepers – Who is it that manages the flow of residents? Is it a managed care organization, a state agency, local counties or hospitals? Does the county or state limit the number of residents who can receive benefits? How easy are they to work with?
- What Are the Barriers to Licensing? – How long does it take to get a license? What are the care restrictions on licensing? Will the state regulations allow waiver level care on a broad scale?
- Medicaid Eligibility For Residents – What is the process residents need to go through to qualify for the waiver program? Is it painful or seamless? Do most applications get approved or is it like pulling teeth? What is the potential risk when taking in a resident with immediate needs before their application is approved.
- Does a State Have Capacity? – Every state has a capacity limit for number of units approved for the waiver program. There needs to be enough excess capacity in the program so that, when they develop a community and apply to the program, there will be slots. Secondarily it is ideal when the state imposes some limits on the number of allocated units in specific geographic areas, ensuring reasonably high occupancy.
- Is there a State/Federal Match? – A portion of the Medicaid dollars paid for skilled nursing come from the state. If the state does not provide some matching dollars it is difficult to make the numbers pencil out. The question really is twofold: Is there a match and how big is the match?
After walking through these triggers I asked about the risk of either states or the Federal government pulling the plug on the program and funding. Their response was that, while anything is possible, the resulting savings are massive and they believe that, if anything, the waiver programs will continue to expand.
Do you have a waiver program in your state?
Are you participating? How well is it working for you?