The Promising Outlook for the Long Term Care Industry in 2024
As 2024 begins, trends and predictions about the year are helpful tools in looking ahead and planning for a new business landscape. Technology, particularly as it relates to artificial intelligence (AI), will be a big focus in the long term care industry. Also emerging in the industry are advancements and evolutions in architecture, pricing, operations, and staffing as the industry copes with today’s economic conditions and financing.
Medicaid, managed care, reimbursements are also top of mind, however, being that it’s an election year, legislative action is expected to be minimal.
Mark Parkinson, president and CEO of the American Health Care Association (AHCA), delivered a promising forecast for the industry in 2024. “The sector will hit our pre-pandemic occupancy and then occupancy will keep climbing,” he said. “For the thirteenth year in a row, we will achieve a Medicare increase, and most states will continue to see improvement in Medicaid rates. The sector will have a better year than the politicians. The election will divide the country, except we will all agree on one thing. All of us will be sick of political ads and ready for 2025.”
LaShuan Bethea, executive director of the National Center for Assisted Living (NCAL), agrees. “I believe 2024 will be an exciting year for assisted living,” she said. “Providers have continued to deliver the high-quality care residents depend on, and that will remain a priority. We’re hopeful that many communities will participate in the Quality Award Program. Rebuilding the workforce and growing the knowledge of and experience with population health management will also provide many opportunities for assisted living in the coming year.”
David Gifford, chief medical officer of AHCA/NCAL, said he looks at 2024 optimistically as we continue to see increases in use of long-term care as Baby Boomers begin to reach the age that typically require long term care. “I see continued expansion of managed care and value-based purchasing programs at state and Medicare Advantage plan level,” he said. “The trends with increasing demand for mental health services provides both an opportunity but also a risk if not adequately prepared. Infection control, particularly for respiratory viruses, will remain a national priority.”
Danette Opaczewski, chief operating officer and executive vice president, resident experience at Revel Communities, said that persisting into 2024, inflation poses a multifaceted challenge for the senior housing sector. “On the one hand, senior housing operators are discussing employee wages and how to keep up with the evolving cost of living,” Opaczewski said. “On the other, many seniors are on a fixed income. How will ongoing inflation affect occupancy rates and pricing for the sector? Across the industry, occupancy rates increased in Q3 2023, and they’re projected to reach pre-pandemic levels in 2024.”
Anticipating Changes in Reimbursement and Payment Policies
Martin Allen, CPA, senior vice president, reimbursement policy, AHCA/NCAL, said he expects 2024 to be a year of innovative partnerships between AHCA/NCAL, state affiliates, providers, and state Medicaid agencies about Medicaid. “As states continue to transition to the patient-driven payment model (PDPM) minimum data set (MDS) or use the optional state assessment (OSA) for Medicaid, we will advocate for the case mix index (CMI) data to be properly used to ensure accurate and sustainable reimbursement,” Allen said. “Our members and affiliates continue to respond to workforce challenges and higher costs, which require our support. We expect these will be opportunities for purposeful collaboration.”
Allen said on the Medicare fee-for-service (FFS) front, the Centers for Medicare & Medicaid Services (CMS) will continue to look for clean post-pandemic cost and clinical data to build future payment policy. “AHCA is confident that the existing MBI methodology will continue to fairly reimburse the sector’s higher operating costs and the impact of lower census in the next payment rule,” Allen said.
“Managed Medicare and Medicaid are here to stay, but AHCA will continue to advocate for policies which support beneficiaries and adhere to underlying FFS regulations,” said Allen. “We must continue to oppose onerous authorization policies and denial practices, which limit patient access and cause financial harm. In addition, we expect and support continued growth and focus on provider-led population health management initiatives.”
Legislation and Regulations: What to Expect in 2024
Legislatively speaking, Clif Porter, senior vice president of government relations, AHCA/NCAL, said that given this is a presidential election year with an incumbent president, history implies that major, controversial legislative activities will not occur because the administration is focused on re-election.
“This phenomenon applies to Congress as well,” Porter said. “However, the most consequential issue (staffing mandate) we have faced in recent years is likely going to be finalized in 2024. It is imperative that we do everything possible to shape the outcome of this rule in a way that is implementable
Analyst comment
Positive news: The outlook for the long-term care industry in 2024 is promising. Occupancy rates are expected to increase, Medicare rates will see improvement, and there will be advancements in technology, architecture, pricing, operations, and staffing. Legislative action is expected to be minimal due to the election year. The industry will focus on innovative partnerships, reimbursement policies, and workforce management. Technology will play a crucial role in enhancing care and addressing challenges. Architecture and design will evolve to improve staff and resident experience. The industry will also address behavioral and mental health needs and demand for personalized care. As an analyst, the market is expected to grow and adapt to meet the changing needs of the industry, with a focus on technology, workforce management, and personalized care.
