Category Archives: Compliance

Culture: Government Payment Centered to Private Customers Centered

In the adult day services arena, which consists of programs alternately described as social or medical model, adult day center, adult day health, or adult day care. It tends to be center based. In the United States there are approximately 5,000 centers. Center providers received compensation from families pay out of pocket (including long-term care and life insurance products, and loans), through grants and community fundraising, and through government payment sources such as Medicaid, the Veteran’s Administration, and other state and federal programs such as the Older American Act and the USDA’s Child and Adult Care Food Program.

Government payment sources are by far the most significant source of funding for adult day services. How does this affect the company’s culture? First, many of the government payment sources also have significant case management program in place with sophisticated intake and referral processes. Consequently, the customer becomes the case management system rather than the individual client. The center tries mightily to serve the participant and her family, yet the case manager is the one who has to be pleased: nurses and staff drop everything to take their calls; the case management care plans form the foundation of the center care plan so the center doesn’t get cited and lose money in recoupment; and significant energy is expanded to ensure documentation compliance rather than excellent care. The payments tend not to move up for years at a time (if not decades), so there is constant pressure towards cost cutting rather than staff and program improvement. The pressure is intense to have a culture responsive to mandates and regulatory compliance.

In Georgia, I’m seeing resistance from Centers. In some cases, programs are simply closing in response to the increasing costs, increasing regulatory requirements as it has become difficult to develop a viable business model. Others are bucking the system. For one non-profit, they decided to drop their participation in Medicaid and government payment programs. They had the ability to continue serving their existing Medicaid clients because they were able to raise money and they found significant savings when they focused on what they valued rather than regulatory compliance. Other centers have announced that they will no longer take new government payment clients.

This appears to be the change that most programs must adopt to become healthier businesses with reasonably levels of profitability.

The change is not easy. In conversations with NADSA members, this goal as proved elusive. Much money has been spent developing beautiful, upgraded physical plants; yet, the needle hasn’t been moved. They find competition from assisted living, in home care, nursing homes, and other senior care providers. It’s difficult to be successful in that market, because it is easy to become dependent on the sophisticated case management referrals.

The first change the adult day center has to be in the corporate culture. The culture that succeeds with government payment sources is not the same culture that succeeds with families determined to provide the best care for their loved ones with their own funds. The culture that will Wow the family with sufficient funds to care for their loved one is different. This is a person-centered environment, in which families expose intimate details of their lives as they become care partners with their loved ones. These customers won’t be impressed with a focus on private paying clients simply because the center needs a better source of revenue.

The next few entries will explore the adult day center’s corporate culture. Clearly, it is and must be unique to each organization, but it FEELS key to effort to change.

Let me know how corporate culture of your program impacts your ability serve and attract a healthy mix of customers.

Compliance! Yuck!

According to the San Jose Mercury News, 23andMe has gotten in trouble with the FDA. Their service allows an individual to test their personal DNA and compare it to a database of almost 1 million DNA samples.  The idea is that the comparison will tell the client if the individual shares genetic information with someone with particular diseases.  The results might provide insight into the client’s health that can then me used by the client’s physician to work towards better health.  It sounds like a really interesting idea that would yield interesting results.  One company back is Google, so they have deep pockets.

The problem? The FDA has ordered 23andMe to stop marketing their genetic tests.  Within days of the FDA order, the company became the subject of a class action lawsuit regarding their product.

I have no idea if their service works or not.  But, I do know that 23andMe ran afoul of a common small business trap: compliance.  The larger a company becomes the more complex the compliance issues.  By 3 employees, the company should have a worker’s compensation policy in Georgia (though the company is responsible for worker injuries after 1 employee).  401Ks require certain paperwork.  Eventually the company is subject to laws and regulations such as PPACA, FMLA, HIPAA, and the FLSA and has to manage issues with state and federal agencies.

Another company who has been in the news recently concerning compliance issues is UBER.  They offer a web-based black car service that users rave about.  Their challenge is that they often run into taxi and limousine regulations.  Generally, UBER chooses to fight both legally and in the public forum.  They also have very deep pockets to fight regulatory structures.

The problem for the business manager is we do not have unlimited resources.  The challenges can end up in court or with stop work orders.  There are settlements.  The agency with oversight can literally close the company down or make it impossible to continue on.

Our company is newly large enough to realize the joy of regulation and compliance.  We’re big enough to have the challenges, but small enough not to have the resources for handling everything easily.  We’re committed to understanding the rules, but don’t to spend all our time on compliance issues.  We’re involved in health care, so these issues are all around us.  We have to be good at it.  We’ve also discovered the joy of checklists.

I’ll write more on this issue, but suffice it to say, I can’t get overly excited by the compliance issue I face; however, I see the value in developing expertise in this area.

Any other thoughts?