Yes Virginia, There is a Santa Claus!

If you have been following my Blog, you know that we have been waiting (not so patiently) for the State to issue our new 2009 and 2010 Medicaid rates. This past week nursing homes finally received written notice of their 4/1/09-12/31/09 and their initial 1/1/10-3/31/10 Medicaid rate.

As a quick refresher, the new rates were to incorporate several new rate-setting methodologies that would ultimately result in both winners and losers among nursing homes across the state.We were hopeful that the preparation and work we have put in over the past 2 years, to help maximize our Medicaid rate reimbursement, would make us a winner and result in a higher rate for us.


Although we had some guidelines to make some reasonable estimates, not enough was known to compute an accurate rate for 2009 or 2010. Until the actual rates would be published, we opted to use the existing rate of $ 155 for the 2009 interim financial statements and established 3 budget scenarios for 2010 using a worse case ($155 rate), moderate case ($163 rate) and best case ($171 rate). Based on these scenarios, we estimated we would need to enact a deficit reduction plan of $300,000 under the moderate case and a $600,000 reduction plan under the worse case.

Well it looks like Christmas may have come late for Kirkhaven this year. Both our 2009 and 2010 rates calculate to $183.00/day (better than even our best case scenario). This should result in a retro settlement payment for 2009 of around $ 750,000 . That will pay off our $500,000 line-of-credit and other short-term borrowings and bring us to a decent surplus with our 2009 financial performance .


For 2010, the $183 rate will eliminate our need to enact any immediate deficit reduction plan, and result in enough of a surplus to resume fully funding our depreciation expense (reserving for future capital replacements) and perhaps enact a wage increase for staff. How and when we would spend any projected surplus will still need to be evaluated and approved by the board.


The issue still for 2010, is that the $183 rate is only "solid" until 4/1/10, at which time a whole new rate methodology (regional pricing) is expected to be put in place. Similar to what we just went through in 2009, nobody really knows the impact of this methodology and thus our rates could go down, up or stay consistent. Since the 4/1/10 rate will have a significant impact on our 2010 budget assumptions, we may have to still be cautious with granting wage increases or other spending until we have a clearer picture.


Regardless, we are at a much better place now than we were before. 2009 has been salvaged and 2010 is off to a good start. We still don't know when these new rates will actually be paid. They must be approved by CMS and run through the Medicaid administrative process. It could be weeks or months but as far as we know, it is just a matter of standard process and protocol. I'll be "dancing on the tables" when we actually receive the cash, but in the interim, I'm still smiling on the inside and will sleep a little sounder.


Kudos to all the staff at Kirkhaven who have worked tirelessly and professionally as new strategies, policies and procedures have been implemented in preparation for maximizing our reimbursement rates. Our higher rates are not an accident or a whim, we earned them!

Yes Virginia, there is a Santa Claus!

At Seniorsfirst, Our People make the Difference!

There is a proven relationship between the level of job satisfaction by the staff and the level of quality outcomes by the organization. In the senior services field, quality care and service cannot be provided without satisfied employees.

Therefore, as CEO, it is important to me that I ensure and foster an organization that has a high level of staff satisfaction. My philosophy is that if I can keep our family of staff happy and joyful in their work, than Seniorsfirst will always be a happy and joyful place for our residents and clients. Sounds simple enough, but it is a challenge and something we must work at every day!

To monitor our success in this endeavor, we routinely hire an outside, independent consultant to confidentially coordinate, compile and report on an employee satisfaction survey process and its results. We want to know how are employees are doing and how they rate their employment experience at Seniorsfirst.

We recently completed the 2009 Employee Opinion Survey and I'm pleased to say that the results continue to be outstanding. We will be sharing the results with staff at special employee meetings, but all my blog readers can get an advanced peek at the summary results.

At Valley Manor, with 66% of the staff responding:

• 80% are satisfied overall with the organization's leadership
• 88% are satisfied overall with the direct supervision they receive
• 68% are satisfied that they receive a fair wage for the work they do
• 81% are satisfied overall with their benefits package
• 95% are satisfied overall with the work environment & safety conditions
• 82% are satisfied with the communication within the organization
• 95% would recommend Valley Manor as a good place to work
• 91% would recommend Valley Manor to family and friends for service
• 90% are satisfied overall with the job environment
• 86% believe the survey results will be used to make Valley Manor better

These scores far exceed industry standards (our consultant tells us) and have been attained and sustained for the past several years.

At Kirkhaven, with just under 50% of the staff responding:

• 68% are satisfied overall with the organization's leadership (65%)
• 79% are satisfied overall with the direct supervision they receive (69%)
• 57% are satisfied that they receive a fair wage for the work they do (54%)
• 80% are satisfied overall with their benefits package (67%)
• 88% are satisfied overall with the environment & safety conditions (70%)
• 66% are satisfied with communication within the organization (60%)
• 85% would recommend Kirkhaven as a good place to work (73%)
• 82% would recommend Kirkhaven to family and friends for services (71%)
• 86% are satisfied overall with the job environment (69%)
• 80% believe the survey results will be used to make Kirkhaven better

These results represent even greater improvement from the previous year and in all cases are higher than what the national averages are within the nursing home field (shown in parenthesis).

As senior service facilities continually work to develop a comprehensive approach to quality outcomes, assessing employee satisfaction is essential. Providers that monitor and foster staff satisfaction and commitment to their work, position themselves for better success in retaining the best employees and the best quality of service.

I am both thankful and proud of our employee satisfaction results and pledge to continue to support staff in as many ways as we possibly can to ensure continued and improved results. For we all know that, at Seniorsfirst, Our People make the Difference!

Merry Christmas

While it may seem like we have had a poor performance year within our Seniorsfirst Communities and there has been a lot of talk about a weak economy or declining resources, 2009 hasn’t been all doom and gloom. Sure, there are plenty of needs and wants still on my “Christmas list” for Seniorsfirst:

1) A rebased Medicaid rate for Kirkhaven retroactive to April 1, 2009

2) A couple of more Entrance Fee move-ins for Valley Manor

3) An 8 million dollar grant to help fund our Kirkhaven Replacement Project plan

4) 92% occupancy at Valley Manor

5) Additional revenue to enable us to give staff pay increases

But, there have also been some very nice gifts received this year that we don’t want to lose sight of and are very grateful for:

1) Occupancy at Valley Manor has improved from 83% to 89.5%
2) Occupancy at Kirkhaven has remained high at 95%
3) Staff turnover has been consistently low
4) Customer satisfaction has been consistently high
5) Employee satisfaction has remained consistently high

With a New Year only days away, our hope is for a brighter future despite the challenges that the economy presents. We know that the State’s budget woes create a concern for our Medicaid reimbursement at Kirkhaven and that a tough economy means we have to work even harder for new move-ins at Valley Manor. But we also know that our service and staff are among the best and thus customers will always beat a path to our doors looking for only the best.

The tough economy will continue to challenge us, but together we will take the necessary steps to ensure an operation where revenues are in balance with our expenses and our hallmark quality is always maintained. We will continue to wish for a Merry Christmas and a Happy New Year, but will be grateful for whatever gifts are bestowed upon our organization. In the end it is the relationships we have and how we work together that counts the most. Every great organization faces adversity, setbacks and change- it’s how an organization reacts and uses the gifts it has, that is the key.

Over the years, I’ve seen this played out over and over again. I have every confidence that our great Seniorsfirst organization will navigate through these rough times and even flourish in the days ahead. So let’s keep our heads held high, our nose to the grindstone and give thanks to God for the gifts in our lives.

Happy Holidays to all! Here are a few pictures with me playing Santa with Kirkhaven residents:

Jim DeVoe, President/CEO

Albany Acts- But Call Me Scrooge!

The State Legislature and Governor finally reached an agreement on a deficit reduction plan for fiscal year 2009/10. The news is good (at this point in time), but call me Scrooge as I will hold off any personal celebration until a few more unknowns come to pass. First the good news:

• Yes, most of the proposed deficit reduction plan items (10% and 3.7% rate cuts, delay in implementing the 2009 rebasing rate and 2010 regional pricing rate, .5% cash receipt assessment increase) were rejected. These items were included in our Kirkhaven "worse case" scenario Medicaid rate projection for 2010 (Medicaid estimated rate of $155.30). Therefore, our moderate or even best case scenario Medicaid rate for 2010 ($163-171) are "back in play".

• Yes, with the 2009 Medicaid rebasing rate still in law, we should expect to receive a revised 2009 rate retroactive to April 1, 2009.

Now the reality check where I play the part of Scrooge:

• We still have no further guidance on when the April 2009 rate will be paid and what the rate will actually be. This is a continuation of the issue that has plagued us all year long. We have rate methodology estimates that suggest the rate will be good for us ($171/day versus the $155.30 currently paid), but it is an estimate at best and we can't keep paying out expenses at our current level while we only receive the deflated $155 rate. Cash flow is an issue and we still may need to take immediate action to level our cash flows despite the expectation of a retroactive Medicaid payment of approximately $300,000 for 2009.

• We still have no further guidance on the April 2010 Regional Pricing Medicaid rate or methodology. This is also a continuation of the issue that plagued us with the development of a meaningful 2010 budget. We have estimates that suggest that Regional Pricing could be good for us, but it is very subjective and based on limited actual data or facts. While our moderate and best case scenario budget projections appear more viable based on the recent action by the legislature, we are still in the same waiting game as before and until actual rates are issued and paid, we have an operating challenge to meet cash flow needs in the interim.

• By the Governor's own admission, the action by the Legislature still falls short of meeting the State's needs. Therefore, we can expect more of the same with respect to delays and threats to our future Medicaid rates. We just seem to be always treading water and never seem to find dry land where we can finally move on.

With respect to what the Legislature did pass:

1. The elimination of the 1.7% Medicaid trend factor for the first quarter of 2010 obviously removes cash from our future operation, but does not impact our 2010 Medicaid rate projections as we had the foresight not to include a trend factor in our rate projections.
2. The HEAL-NY payment delays has no operational impact for us, but does send us a message that the likelihood of future HEAL-NY grant opportunities is probably non-existent until 2011 at best. This certainly impacts the timing of our KH Replacement Project, which is contingent upon HEAL funding.
3. Increase in Fraud & Abuse recoveries has no immediate impact on our operational budget but does send a scary message that we can expect more scrutiny and audit recoveries from not just blatant acts of fraud (of which we support), but money grabbing schemes aimed at innocent and outrageous documentation and procedural omissions.

In short, the news is good compared to what was on the table, but many of the critical question marks related to our 2009 and 2010 rates and HEAL-NY funding access for the KH Replacement Project continue to remain unknowns. The continued delay by the State to address these will have the impact of our needing to implement a deficit reduction plan of our own at Kirkhaven in order to meet cash flow requirements. I'll keep you apprised of any further developments. Happy Holidays!

Dear Albany: Just do it!

Hockey legend and the NHL's all-time scoring record holder Wayne Gretsky once said, "you miss 100% of the shots you don't take". Likewise, it is the wise baseball coach who tells his younger players, "if you're going to strike out, at least go down swinging".

So please, Albany, enough already with the stagnation, inaction and waffling. While you sit on your hands trying to figure out what to do to make things work, the rest of us are left trying to figure out how to do our work with what you're not doing. And what you're not doing is:

• establishing a definitive strategic vision
• creating an effective & efficient plan to arrive at that vision
• implementing a plan
• staying the course

Instead all we have gotten out of Albany is:

• an unfulfilled "promise" to finally re-base our 1983 base-year Medicaid rates to a more fair and current 2005 base-year in 2009
• a stall tactic that as of yet has not produced or paid us this promised revised Medicaid rate
• a "temporary" reduction in our Medicaid rate while Albany is "working out" the implementation plan details of a new Medicaid rate
• a "sudden" change of plans when Albany unilaterally came up with a new Medicaid Regional Pricing idea
• a lack of clarity on what our final 2009 & 2010 Medicaid rates will look like or when they will be paid

In the interim, we are left in the dark while continuing to care for the elders of your State for whom you pledged to represent and serve. Your failure to pay us what you promised has left us with deficits and debts that we must now recover from. Your lack of clarity makes it impossible for us to make informed decisions or long-term strategies. Your inaction leaves us helpless in our attempt to rationalize what action we need to take.

So please, Albany, get your act together and just do it! Better that we at least know where we stand, so we can plan for where we need to move. But don't take back what you already promised and don't look backwards at what already has passed. It's unfair and unconscionable to expect us to absorb or plan for reductions retroactively enacted. Look forward, establish a vision, create and implement a manageable plan, and stick to it.

If you can at least give us a clear and reachable target to aim for, we might stand a chance to hit it. If you can at least tell us where our final destination is, we can hopefully set a course to get there. If you can at least provide us with a rule book, we can try to play the game. But please, Albany, give us something and just do it!

A Busy Week of Activities

My week began with a scheduled visit by U.S. Senator Chuck Schumer to Valley Manor where he held a press conference to announce his sponsorship of the National Silver Alert Act. Anytime the Senator comes to town, it is a big deal for Rochester. To have him come to Valley Manor, is a big deal for Seniorsfirst. A big "thank you" to board member Sharon Boyd (president/CEO of the Rochester Alzheimer's Association) for referring this opportunity to Valley Manor.

The Silver Alert Act is modeled after the AMBER Alert and will provide federal coordination and assistance to local and state enforcement to assist efforts to locate missing senior citizens across the country. The Senator's visit brought out all the media and a room full of Valley Manor Residents and community supporters. Not surprisingly, once the Senator finished his prepared statements, the conversation turned to the issue of national health insurance.

On Tuesday, I had the excitement of attending the state auction of the Armory site (see earlier Blog entry). That turned out to be more drama than I had anticipated and was certainly an interesting experience.

On Wednesday and Thursday we held our Kirkhaven and Valley Manor board meetings. At both communities we had a strong focus on financial performance and fiscal strategies as we reviewed our 3rd quarter statements and prepared for our 2010 budget development. I wish I could say all is well, but in these challenging economical times, I'm not sure that is even a reasonable expectation. We'll be putting together a contingency plan to ensure we are prepared to handle whatever comes our way. I'll Blog on that subject in the weeks to come.

On Friday, I attended the Greater Rochester Awards luncheon, which celebrates the exceptional work accomplished through our community's human services sector. Congratulations to Seniorsfirst board member, Pat Grover from the National Multiple Sclerosis Society, who was honored with a Community Champion award.

On Friday afternoon, I volunteered to perform for the Kirkhaven residents at their weekly Happy Hour. I had a blast playing and singing Halloween songs to mark the occasion. When I ran out of Halloween music, I played some of my country music and other favorites. I wasn't really surprised that they enjoyed singing along with "Amazing Grace" and "America the Beautiful", but who knew they would have so much fun with Neil Diamond's "Sweet Caroline".

Lastly, here are two cute pictures from a little pre-Halloween activity my wife and I had with our grandsons Logan and Brennan.

Thanks for visiting my Blog. See you next time!

A Day at the Auction- Going Once, Going Twice..........?

As many of you know, Kirkhaven has been actively working with local Real Estate Developer, Larry Glazer and Buckingham Properties on a potential Kirkhaven Replacement project on the site of the former Armory on Culver Road across from Cobbs Hill Park. The site is owned by the State of New York and earlier this week the State put the site up for public auction. I have never attended such an event, but since Kirkhaven had a keen interest in the outcome of the auction, I went to observe the action. I had no idea I was in for such high drama worthy of a Blog posting.

At exactly 1 p.m. Tuesday afternoon, I walked into the Ebenezer Watts Conference Center where the auction was scheduled to take place. The room was packed, standing room only in the back and every news station and media lined up along the side wall with cameras and microphones at the ready. I sat down in the seat saved for me along with the Buckingham Properties team. The State auctioneer began his prepared statements and "rules of engagement" as I measured up the competition. A full house didn't set well with me and for the first time I began to think this might not go down the way we hoped.

It was about a year ago when Larry and I first spoke about the Kirkhaven Replacement project. Larry is one of the biggest local real estate developers and he took an immediate interest in our project. Over the next several months we would periodically touch base about properties he owned, but then he called me to say he had the "perfect site for us". He was talking with the City of Rochester about the old Armory site and attempting to pull together a 3-way deal to gain site control. In the final analysis, the decision was made to forgo a deal through the City and instead let the property go to public auction where we might pick it up at a better deal. The site has an ideal location, but some environmental issues that although our project could work around, other projects could not without substantial cost.

Larry and I spoke a few days prior to the auction to discuss a maximum bid price strategy that we thought the project could support. Since Buckingham Properties would be the bidder and potential property owner, Kirkhaven was only an interested party in a potential lease deal on the eventual developed property. All the risk and decision making were in the hands of Buckingham Properties, but this was nothing new to Larry.

I arrived at the auction site at 12:30, spoke to a State representative and learned there were several registered bidders. I also learned that 2 other auctions for armories in other parts of the State had been woefully attended and sold for nearly nothing. That was encouraging news. The room was pretty empty, but I also discovered the auction wouldn't start until 1:00, so I opted to take a walk. I picked up a burger and coke from the street vendor at Court and Main and sat outside the conference center eating and sizing up the folks who began to enter the building.

When the auctioneer finished his introductory remarks he then informed everyone that the bidding would begin at $500,000 and move up in $20,000 increments at first and then $10,000 or $5,000. Bidder #1 boldly opened the bidding at $500,000. A few others threw out competitive bids, but bidder # 1 quickly countered every bid with a brash and arguably erratic higher bid each time. In no time at all, the bidding passed the $750,000 mark and the bidding slowed down. I was intrigued by bidder #1, although I could only see the back of his head. He sounded like a kid and wore a Buffalo Sabres cap and cut off sweat-shirt. I whispered to the "suits" on either side of me, "who is this guy," but neither knew. As the auctioneer shouted going once, going twice............suddenly a suit from the other side of the room threw out his first bid and the game was on. Bidder # 1 and Bidder # 8 went back and forth and back and forth. The kid rarely paused as he threw out his cocky bid retorts, the suits took their time as everyone waited in anticipation. Was this it, was it over? But each time the suits raised the bid.

Then Larry jumped in with a bid at $900,000. My blood began to run faster. "Okay", I thought, "Larry's in the game and this might get really interesting now". The suits and bidder #1 kept raising it higher and Larry jumped in again at just over a million dollars, but the bid went higher yet and Larry put his card away. The bidding had gone beyond our intended limit and now the only drama that remained was would the kid in the Sabres cap out last the suits.

The whole process took about 20 minutes and every minute was intense. With each bid, the cameras would shift their attention to the other bidder and the room would wait. You could cut the tension with a knife and when a counter bid was finally shouted out, the room would take a breath and shift its collective attention to the other bidder. And so it went until the suits put out a bid of just under 1.5 million and the kid laid down his card. Going once, going twice...........SOLD!

The winning bidder was another local real estate developer who would later explain that he has no known plans for the site, but couldn't pass up the opportunity for such a great piece of real estate. We'll talk to him about our plans, but that is a long shot given the high price he paid for the site. The "kid" wasn't as young as I had thought and turned out to be a partner in a local group that wanted to turn the Armory into some type of sporting venue for the neighborhood.

I am disappointed that yet another option for our Kirkhaven Replacement project has appeared to have hit a dead end, but for every door that closes, another door opens up. We'll keep on searching and talking and something will eventually come along. Maybe something with less drama and a happier ending. Larry Glazer has already indicated to me that he has another possible venue for us to explore, so let the games continue and keep the faith!