Transcript Generated by AI 00:05 Mark Parkinson back with Park Place, and today we start a deep dive on what 00:09 it's like to own and operate buildings in Texas. 00:13 Now, for as long as I've been in the sector, 00:15 which has been decades, Texas has been considered one of the 00:19 worst states in the country to own and operate nursing homes in. 00:22 And that's probably been rightly deserved. 00:24 The Medicaid rates been really, really low. 00:27 The members have been pretty divided, and it's just been an enormous challenge. 00:31 But things are changing in a big way in Texas. 00:36 They've had some recent successes. 00:38 And on top of that, for the first time I think, in history, 00:41 the members have started coming together, and they come together in a big way. 00:46 We're joined here today by Eddie Parades, who's the executive director of the 00:50 Independent Coalition of Nursing Home Providers. 00:52 We call it the Coalition. 00:54 Eddie, welcome to Park Place. 00:55 Thank you, Mark and Eddie. 00:57 I mean, I think it's been like 100 year. 01:00 You look back the whole history of Texas, the the members have never come together 01:04 in a single association. 01:06 There's always been multiple associations. 01:07 There's always been hundreds of members or providers that aren't members of any 01:11 association. 01:12 There's been multiple voices in the State House and the results haven't been very 01:17 good. 01:18 But you and the coalition have come along and you have more or less united the 01:23 sector. 01:24 Tell us about what you've been able to accomplish and bringing folks together 01:28 and tell us how you've done it. 01:30 Yes, Mark, you're right. 01:31 It's been, it's been definitely up and down over the 01:34 lot of years that I've also operated here. 01:38 And we have we've united the sector. 01:41 The Texas Nursing Home Coalition now represents 865 of the 1000 for profit 01:48 facilities in the state. 01:51 And we are united for the very first time in history and we did it really by being 01:57 effective for providers and just simply winning. 02:01 We actually started the coalition in 2015 with initially 5 companies who were like 02:08 minded and we were focused on the growth of the quality incentive program in Texas. 02:15 We call that QIP. 02:16 We were successful with QIP. 02:19 So we expanded our focus into general reimbursement, 02:23 effectively the base rate and we build a platform and successfully secured 02:29 meaningful base rate funding inquiry increases over the last two legislative 02:35 sessions. 02:35 And then we decided two years ago our Board pushed to expand our mission to 02:42 include improving regulatory environment. 02:46 I was a little reluctant on that, but we jumped ahead and in both feet and 02:51 we tackled the operating regulatory environment. 02:55 And all along the way Mark, we've enjoyed wins and more members 02:59 wanted to be part of that and so they joined. 03:03 And so as we sit here today, we are now united with approximately 85% 03:09 of the for profit skilled facilities representing 100, 03:14 000 licensed beds as members of the coalition in Texas. 03:20 Well, congratulations, it's a, it's a remarkable accomplishment. 03:24 And you know, just to explain to folks how challenging 03:27 it's been in Texas. 03:29 I think before the two increases that you referenced in Medicaid that you've been 03:33 able to achieve over the last few years, there hadn't been a Medicaid increase for 03:38 like 10 years. 03:40 Is that right? 03:41 Yes, sir. 03:42 I mean, I just, I don't even see how you can operate in 03:44 an environment like that, that the rate was literally the same for 03:48 a decade. 03:48 It's just, it's just unbelievable. 03:50 Yeah, we, we actually went ten years in a row 03:53 without a Medicaid base rate increase, but we changed that. 03:57 And the coalition is making a difference, as evidenced by those two funding 04:02 sessions. 04:02 But we have a long ways to go and we have solid plans for the future. 04:08 But as long as we stay united and I think we'll we'll keep winning. 04:12 Yeah, yeah. 04:13 And you're right, if you, as long as you keep winning, 04:15 you'll keep growing. 04:16 And on top of, you know, being now representing 85% of the for 04:19 profit buildings, the other nice thing that's happened in 04:22 the last year or so is that you're now the AHCA affiliate. 04:25 So you're now tied into the to the federal association and I know there's a 04:28 lot of people that are very active at that level. 04:31 So that's obviously great news. 04:32 Now one of the things that's interesting about Texas and people hear about this 04:36 and times, times they get a little scared about it 04:38 is that is that I, I hear it's like there's no certificate 04:41 of need. 04:42 And so people are worried that folks are going to be building like crazy all the 04:45 time. 04:45 What, what is the reality do are people 04:47 building left and right or what's happening? 04:49 We did we we had a ton of new development pre COVID and since COVID it's definitely 04:58 slowed down. 04:59 But Texas is unique in that there really isn't a CON for licensed bed slash 05:06 Medicare certified beds, but there is controlled mechanism by 05:11 county for Medicaid beds. 05:13 So there is a process for that and it can be challenging at times, 05:18 but there are ways to work within that. 05:21 But overall, Mark, it really slowed down. 05:24 I haven't seen anything probably for five, maybe six years. 05:27 But there is a slight change in the winds. 05:31 You're starting to hear boards in companies talk about potential 05:35 development in the future. 05:37 And even though there's kind of a lax situation with CON as you as you describe, 05:41 it's kind of a hybrid. 05:42 I was doing an analysis yesterday and Texas really isn't over bedded. 05:47 If you look at the number of beds per person in Texas, 05:50 it's pretty close to the national average. 05:52 So I think there's this view that oh, there's this incredible amount of 05:56 building that's happened in Texas and it's really not the case. 05:59 It's not a reason to not come to Texas at least would be mine. 06:04 Eddie there's Texas has always had a great reputation on labor and torts as as 06:09 being a really low cost state for tort liability and labor is is that is that 06:14 warranted? 06:15 Yes, sir, it it really is. 06:18 We have cap limits and we see less litigation making for a better legal 06:22 environment than the rest of the country. 06:25 No doubt. 06:27 I think labor, labor always is a challenge. 06:33 As you know, it's kind of the, the third leg of the stool now be the 06:38 most important leg and that's a very localized, you know, 06:43 Texas is a huge state. 06:45 So some markets are harder, easier than others. 06:48 But overall our labor markets are relatively favorable and our litigation 06:54 it's, it's a more attractive than other states, 06:57 that's for sure. 06:59 The data show that Texas is really low overall cost on liability and and that's, 07:03 that's obviously makes it easier to operate. 07:06 We've already talked about Medicaid. 07:07 Let's talk about the regulatory environment. 07:09 I think operators in every state think their state is the worst. 07:13 I don't know if that how people feel about it in Texas. 07:15 How how do you all feel about the regulatory world there? 07:18 Well, it's been a mess. 07:19 It's been up and down. 07:21 But historically, this is quite an interesting story. 07:25 Historically, we've saw 200-300 IJs cited a year in 07:30 Texas. 07:31 Now that's a that's a ton for other states. 07:34 But again, remember we have 1200 nursing homes in 07:38 the state. 07:39 Well, somehow that grew to 1000 07:44 IJs in both 2023 and 2024 it tripled. 07:49 So we brought this to the attention of the governor and we developed a plan to 07:53 collaborate with the state agency towards improvement. 07:57 And you know what, we did it. 07:58 We formed a provider led coalition quality work group. 08:02 Meera Reiner is key with that. 08:04 She does an outstanding job and we re we rebuilt our relationships with monthly 08:10 meetings and joint training with our regulator, with our regulators, excuse me. 08:16 And now we're trending back down to 400. 08:19 We've reduced it by over 50%. 08:22 IJs for this last year. 08:24 We're still working to get better, but we've made really good progress. 08:29 Well, Eddie, it feels like things have really gotten 08:31 better in Texas and it feels like things are going to continue to improve. 08:34 I mean, I, I feel you sound optimistic to me. 08:39 We're doing good, future looks bright. 08:41 We just got to stay united. 08:42 And I think we really kind of want to protect where we're at now. 08:48 But keep an eye on us, Mark. 08:50 We're making a difference. 08:52 That's great. 08:52 Well, congratulations to you, the coalition, 08:55 all the providers that have come together. 08:58 I feel really good about where Texas is headed in the future. 09:01 And we appreciate you watching this video and we appreciate your continued support 09:04 of Park Place.
