Steven Littlehale, chief innovation officer at Zimmet Healthcare Services Group, has created a real-world data set that has never been done before, which is to give skilled nursing providers and all long-term care stakeholders an objective, analytical tool to measure each of the 50 states and DC from a survey and regulatory perspective.

He calls it the State Regulatory Index (SRI), and it fills a void in determining how states rank across 12 key survey and regulatory categories that are regularly updated for accuracy.

Littlehale formulated the SRI for use in the new Park Place Live video series (see the bottom of this article for all links) hosted by Mark Parkinson called State-by-State (and on Zimmet Healthcare’s platform called State of the States) that has broken new ground in examining how good or bad a state is for SNFs to do business.

The series assesses the state (the first is Illinois for the current of month of March) in four ways: an interview with the state association executive, an interview with a leading provider in the subject state, the SRI breakdown of the state by Littlehale, and the determination of a reimbursement grade for the state using a new scoring system devised by Marc Zimmet.

As part of the SRI’s construction, Littlehale also created a color-coded map for all of the states and DC, with green meaning that the state is a more favorable regulatory state, white being a neutral state, and red being not as favorable. The criteria use the same color coding and are weighted with the results compiled for the overall rating for the state.

This map will soon be available on the Park Place Live website as well as Zimmet’s site. Stay tuned for its unveiling.

How He Did It

Littlehale said there are many factors that go into answering the question of whether a particular state is a good place to acquire a building or start a facility from the ground up, with a key one being the regulatory environment.

In creating the SRI, he wanted to avoid using data points that really don’t matter and help providers and all stakeholders in their quest for answers rather than take an easy way out.

“Most people would immediately jump to Five-Star and say, ‘Well, what's their Five-Star score?’ But the regulatory component of Five-Star is actually a forced distribution, and the Star cut points are based on state performance. So, every single state has the same distribution of 5, 4, 3, 2, 1-Star facilities. It's by design, it's in the methodology. So, using that wouldn't make any sense at all,” he said.

“I thought about what is actually happening from the external stakeholder perspective and asked what is going to cause the facility so much of a challenge that they may not be able to fulfill the requirements of their loan, for an example. What are things that are going to put the facility in the press in a negative way? What in the regulatory environment is going to take significant money off the table, both literally and figuratively? Certain regulatory remedies take key people who run the building, including patient care, away from their principal responsibilities to tend to onerous bureaucratic issues,” Littlehale said.

This process he describes in deciding on what to put in the 12 criteria leads up to what the RSI is: a reality check on survey and regulatory issues that matter most.

What the Criteria Measure

Whittled down from three dozen items, the 12 criteria are:

1. Number of Civil Monetary Penalty (CMP) fines

2. Amount of CMPs

3. Percent of G or greater tags that were IJ

4. Percent of all deficiencies that were IJ

5. Percent of deficiencies that were from complaints

6. Denial of payments for new admissions

7. Discretionary denial of payments for new admissions

8. Days between surveys

9. Abuse icon

10. Months on Special Focus Facility (SFF) list

11. Candidate SFF months

12. Average health score

Littlehale then described that the criteria all have different weights based upon their impact on external and internal stakeholders. For example:

Numbers one and two - The number of Civil Monetary Penalties (CMPs) is important, but it's not as important as the actual amount of the fine. So, you can have a lot of small CMPs, it’s important but not as much as the value. For example, Massachusetts is seen as being neutral, with the number of fines being fairly typical. However, the amount of the fines are very, very large, more significant than many states.

Numbers three, four, and five. These are the three different ways of looking at deficiencies and designed to shift through the noise. What deficiencies will pull your team away from essential operations, which will cause reputational risk in the Five-Star program and SFF? Those things are expensive both in time and money. It’s not to say that the issues identified shouldn’t be addressed, however, certain states and even survey teams within states are notorious for having a ‘heavy hand’ with deficiencies during surveys.

The DPNA (denial of payments for new admissions) and DDPNA (discretionary denial of payments for new admissions) measures are financial hits that the state and CMS can put on a facility based on bad performance. The DDPNAs, it's discretionary. The state has the discretion of recommending remedy to CMS, who ultimately has that discretion.

The abuse icon measure. That is a reputational risk more than anything else. But we found out some states liberally award abuse tags. Other states almost never use them. But reputationally, it's a big deal, the big red hand is a bummer. It impacts your Five-Star score and your reputation.

Here’s How to Watch State Series

You can access the four videos on Illinois, including the Littlehale SRI edition, at the following links:

Illinois Part 1 – State executive Matt Pickering

Illinois Part 2 – Provider Jonathan Aaron from Omnia

Illinois Part 3 – Littlehale and the SRI

Illinois Part 4 – Marc Zimmet and the overall reimbursement grade

Comments or questions? Contact Patrick Connole at pconnole@parkplacelive.com.