The Truth About Medicaid in Assisted Living: Profitability, Myths & Rate Increases

Transcript

00:00:03
hey friend it's Brandon Gustafson with Assisted Living investing Assisted Living investing I help beginners like you launch their Assisted Living business in the next 12 uh in the next 12 months uh excited to have you here with me today today we're going to be talking about one of my favorite um topics which is Medicaid I think it's the best kept secret when it comes to uh Assisted Living so we're going to talk about that um today uh in our video before we get started I want to remind

00:00:29
you to get over to to the the website uh Assisted Living investing. net I have a free resource for you there um we've got it going on in the ticker down below but also um go grab that Assisted Living investing. netb checklist to get our our free business plan checklist which is a tool that I put together to really help you make some progress and um you know launch your your Assisted Living business really help you get uh to that point so go grab that free free resource Assisted Living investing. netb check

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list and with that um I want to get into introducing myself a little bit here as well um so my name is Brandon Guston uh just so you kind of have it a feel for who I am if you're new here type in newbie um because I love uh seeing all the the people that are new um and and how I can help them out um but uh yeah my name is Brandon gustofson I own and operate two assisted living facilities I've been doing this um for uh go since 2020 so a little over four years now um and and love the experience that I get

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to have in helping people like you have been coaching now for uh informally for about three years um and officially for about a year and love helping people like you launch their Assisted Living business I have a background in healthcare um Administration as well I have a masters in healthcare administration um and have worked in the industry for over a decade um in various capacities working with a lot of like health insurance companies and and that type of stuff um I have uh let's see I I um operate out of state

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actually uh so my two facilities are out of state I live in Utah one of my facilities is in Colorado one of them is in Utah or in Idaho and I live in Utah um and and so I I love just kind of helping people guide them and and help them through the process of uh getting things started and learning how to to do this I've also worked a lot with government programs like Medicaid in the past um and just in my professional capacity and so I have a lot of experience and exposure to to that world and so can really help you and and guide

00:02:34
you there as as you're trying to get started so that's that's my background uh and why I'm kind of qualified to teach you about what we're talking about today um now with that said uh let's get into the topic today let's talk about what Medicaid is so Medicaid is a it's a federally funded program um basically it it falls under the umbrella of CMS which stands for you know I'm not going to try to say what it stands for because there's too many acronyms in healthcare

00:03:00
I will probably say it wrong but it falls under the CMS umbrella it's a Fally funded program and then it's administered at a state level so essentially what will happen is um and you you'll see this as we get into into this phase um and there's going to be budget discussions and and things like that um and I'm sure they will be very prevalent over the the coming months as we change administrations um and I know there was a budgetary um uh kind of placeholder until I think January or

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February of this coming year uh right now it's 2024 uh 2025 there will be those discussions about what's going to happen this happens frequently so there's going to be budget uh set and CMS will say okay we need x amount of dollar we need a trillion dollars we need hundred billion dollars whatever number it is um for for Medicaid and then each of the states based off of population is who's going to um that's that's how those budgets are set they trickle down to the States and then the

00:03:56
states will allocate that money out to people so that's where it's federally funded and then it's state administered so our taxes PID for for a lot of this um I can hang up on that phone call um so that's something that uh that's that's how Medicaid works at its core federally funded State administered the state will then set its budget for where they want that those funds to go and that could be going to something like Wick which is women's infants and and children could be going to mental health

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could be going to um something like assisted living as well and so these are all all budget things that come down and that's kind how that that's all administered I truly believe that Medicaid is a Hidden Gem I think it is the best kept secret inside of the Assisted Living industry a lot of people don't like to do them and the reason why I think it's a Hidden Gem is there are consistent payments um the state the the the government is You know despite what you think about politics and and

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government and things like that it is not the most efficiently run thing especially when it comes to healthcare and finances uh we know this by looking at our our federal debt um it doesn't matter who's in in power it exists right um but what I will say is when it comes to programs like this they are consistent at paying you they very rarely will have Hang-Ups and if there is a hangup it they will notify you about that and um you can work through it consistent payments are great it's

00:05:22
reliable income it it comes in all the time it is consistent because it gets uh set um at a federal level CMS is one of those things that even in a government shutdown is going to continue to get funded um and so that's that's something that you don't really have to worry too much about unless there's like a huge shutdown for some reason um but you're going to have that reliable income and it also allows you to have higher occupancy rates so there's there's a few things there's a few ways for you to

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make money in Assisted Living uh there's kind of two levers one is how much money your residents are charging you and the other is how many residents you have in the home and so if you are a 16 bed facility similar to what I have and you only have eight residents in there it doesn't matter like you're at half capacity you're not going to make the money that you need when you have Medicaid it opens up the doors to a lot of different people um that you can bring into your facility and really fill

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the beds fast and so those occupancy rates are huge in helping you get the money that you need coming in and having consistent work uh uh having consistent income coming into into the business these are the reasons why I think really think it's a hidden um and people they don't like it for various reasons and we'll get into that here later on in the video but uh it's there's a lot of good about Medicaid and a lot of reasons why I think you should be serving that population now the bad with that and and

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this is what I was alluding to there's more paperwork there's more complexities there's more government involved um there's just a lot that goes into it and then there's just kind of this negative perception that I think people have around Medicaid I don't think it's deserved because I think the the individuals that are on Medicaid they need to be on Medicaid for whatever reason it could be disabilities it could be income related it could be any number of things um there's there's reasons why

00:07:12
people are on Medicaid but there should in my in my mind there should not be this perception that oh man that person's on Medicaid they're a horrible person I'll want them in my facility absolutely not I we are 90% Medicaid in our in our facilities and I love our residents they are incredible people they're they're so much fun to talk to I I love visiting with them and getting to know them and their stories they are normal people and it is so much fun to work with them so the perception thing I

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I think is very undeserved um and I I think there's a lot of uh incredible people that are on Medicaid but it is true there's more paperwork um it's you have to get your facility license and then you've got to get certified as a Medicaid provider and it's while it is a government agency and it's a government Department um it's not going to be the same one that does the licensing for your facility they don't really talk to each other they probably don't even like

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each other I don't know but they uh they they don't interact very well together they might know what the agency is called on the other side but that's uh to about the extent that they will be able to help you out with so you've got to go work with a different government uh agency or a different government U Department there's a lot of similarities with the application process for Medicaid but there are some extra things You' got to be putting together there and you have to fill out more paperwork

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um so those are things that are true and you have to maintain it and and do it regularly and stay up to date so while I will say I I think it's valid to say there's more paperwork it's a little more complex it's it's less straightforward than just billing a resident for you know $4,000 $5,000 for their room there's going to be daily rates and understanding what those are and then when there's increases and how can you increase um rates and um also the the rent payment that comes directly

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from the the resident there's a lot of things that that are you have to kind of Juggle it's more complex for sure but um I I think the complexities are are worth dealing with honestly um and we'll get into that here in a little bit as well so despite the bad and some of the difficulties I think it's I think that's a benefit honestly because I think it um also deters people from getting into the the Medicaid game and it opens up more opportunities for those that are willing to figure out how to use that and and

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make it work for them so uh there the negatives that are there I think actually benefit you if you're going to go the route of of serving a Medicaid population um as you get into this um I'm going just check and make sure I don't have any comments so those of you that are live here we're going to do Q&A at the end so feel free to type in your questions as we go uh I'll have time to to answer any questions that you have um here at the end of call as well um and for those of you that are not

00:10:05
live um then type in your your comments or questions down below as well love to hear you uh hear from you um specifically I'd love to hear which state are you in and are you going to do Medicaid are you considering Medicaid or not I'd love to hear that so if you are type in Medicaid and then type in your state I would love to to hear a little bit about that um from you all right now let's get into U the next part here the payments I want to break this down so you understand understand exactly how

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the payments work for Medicaid and this is I think where there's a lot of complexities a lot of um just like misunderstanding of exactly how Medicaid works so with Medicaid the one that you're going to be most familiar with is the daily rates so the state and and like I was mentioning federally funded State administered State's going to go through their budget they're going to say you know for assisted living it's a $100 a day that's what we're going to approve and then you build that so in

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that case Cas what you're going to have is you have residents that come in um you get a code that you then build to Medicaid and it could be the state-based Medicaid or sometimes they'll have a thirdparty administrator which is typically like a a a commercial insurance health insurance company that will um process the claims and things for them um but you will build them you get a code one two 3 4 and then you build that and you say we want to build code 1 two 3 4 for $100 and we have 30 units because

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there's 30 30 days in a year um and and so you would build that so 30 days times 100 that's $3,000 right there and you would build that on a on a consistent basis on a monthly basis you actually um another really cool thing about Medicaid is you can build multiple times um a month you could build it as frequently as you want most Medicaid um plans will pay out on a weekly basis so you could build as frequently as weekly and be getting consistent cash flow can really help if money's tight for things like um

00:12:02
payroll and and things like that okay so that's that's something that's a really big benefit but that's that's one piece that's the one that everybody knows about they they they talk about when they think Medicaid they're like oh it's $100 a day it's $110 a day it's $90 a day whatever the number is um it's actually relatively easy to figure out what that number is there's the the the Medicaid rates are going to be posted on state websites so you can go figure that

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out and and see what that is and then you just call it a 30-day month for an average and and then you can back excuse me you can back into that from there and and really get an idea of what those daily rates are going to look like so that's number one number two is going to be the rent payments so your residents that are on Medicaid they qualify for Medicaid um and oftentimes they're going to qualify because of income reasons which means they don't have a lot of money in the bank which means they can't

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be private pay for you because they they don't have funds available they don't have any other income coming in they don't have an asset or anything like that it's how they qualify for Medicaid so they're on Medicaid you're getting paid a daily rate from the state but they're also getting a social security check now you are allowed and this is this is set out by the state to Bill a portion of that um social security check so let's say they get $1,000 typically you're between 80 and 90% of what they

00:13:22
receive from Social Security you're able to um you're able to collect from them so let's say that it's uh that you get to collect 90% of a of a thousand dollar that they that they bring in from their social security so you're collecting $900 a month and you collect that from them at the beginning of the month it's a monthly it's their rent payment and they pay that directly to you that could be with a could be with a check um could be cash whatever however you want to

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collect that just like you would with a private pay individual you're going to collect that that money from them so now let's let's take a step back again in this scenario that we're looking at we've got 100 $ a day that's $3,000 a month now we're also collecting $900 a day from that Resident from their social security now we're up to $3,900 um per month with a Medicaid resident and I will tell you this is very realistic we actually are able to collect much more than this in our in

00:14:16
our for from our residents that are Medicaid so these are real numbers if anything they're being conservative so you can actually do this it's going to depend on the state um so don't don't say you know Brandon said every single state is like this that's not the case every state will be different but this these are real examples that I see in multiple States um is is what I'm telling you so to get $4,000 a bed with Medicaid very possible um and I'm going to do a video that I'm planning um

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that's going to talk about um how I can how you really maximize this and and I've gotten up to $122,000 per room with Medicaid residents and I'm going to explain how to do that so if you're interested in that um type in 12,000 down below would love to see if that's something that's interesting to you so type in 12,000 if you want to hear how how I get $12,000 in a room with Medicaid residents now the third part of this is what's called a share of cost so this is not the case with every single resident

00:15:15
but there are residents that you're able to BU Bill an extra amount and what will often happen there is they get probably some extra social security income or they've they've had to declare everything for Medicaid in order for them to be able to receive Medicaid benefits and maybe they had you know a trust or something that's giving them a little extra money in order for them to maintain their Medicaid status they have to spend that money and you um as the service provider are entitled to collect

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that money from them the state will tell you specifically what that share of cost might be not every state has this not every resident has it but we have resident that do this and uh it's an extra $2 or $300 a month for for that Resident that we're able to collect so let's say that it's $300 that we're able to do so we had the 3,000 for my daily rate I have 900 for my rent payments and I've got 300 for my share of cost all of a sudden I'm up to $4,200 for a Medicaid bed these are real

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numbers that I've seen as we've been operating our businesses um for over four years now um so real examples that I want to show you but that's how those payments are going to come into you and why Medicaid can actually work and gives you multiple streams of income and the ability to Bill and collect multiple times per month to really help out with cash flow and uh make sure you have funds available for when you are trying to um for when you're trying to make payroll or some of those other big

00:16:51
expenses that you're going to have as you are operating your your business here so that's how payments work with Medicaid that's it's a lot that hopefully you were able to follow that but there it's it can be complex but just know um it actually it makes a lot of sense right when you're thinking about this you're probably thinking I could do four or $5,000 a bed with private pay Medicaid you know it's probably only like $2,500 a month that's not the case could be depending on the

00:17:17
state but um in my experience rates are are quite a bit higher than that and you can actually really take advantage of of some of that um so make sure you're understanding how Medicaid Works before you get into this and those of you watching are the the few that are going to understand how this works and how you can really take advantage of this strategy and help you be successful um and it's really going to help you as you are trying to build a profitable business to create more of that time and

00:17:46
Financial Freedom for for your family okay now I want to talk a little bit here about raising rates um so as you are looking to to raise your rates um there's a few things that you got to do one is you have to demonstrate that you are providing a higher level of care so when you bring a resident in um to your facility what's going to happen is you're going to to look at them you're going to verify a few things you want to you know make sure they're a real person you're going to look at IDs you're going

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to verify addresses contact info you want to bring them in for a tour you want to get to know them make sure they're good cultural fit you're also going to do an assessment a new Resident assessment on them so if you're interested in learning a little bit about what that assessment process looks like type an assessment down below um so I can so I know that that's something that would be of interest to you um assessment if you want to know a little more about assessments but you're going

00:18:39
to do an initial assessment on that Resident and you're going to say this is the Baseline you know they uh our nurse uh has looked at them we think that we're going to have to help out with um dressing the person um and we're going to have to prompt them to remember to go take a shower um and then we're going to um see if they need any help um being fed their Mills um so we're going to those are the things that we're going to do um for them and then you bring them in and then you evaluate them Most

00:19:09
states will allow you to re-evaluate within the first 30 days and so you can do a re-evaluation on them and say you know we thought we were only going to have to prompt them to shower but we what we found actually is we have to do the showering it's a lot more care for us it's it's a lot more work for us to to have to do so you can reassess them and demonstrate that you're doing a higher level of care now when you're doing that you have to document everything I put this in big capital

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letters because it's so important that everything that you do you have to document everything we use software to do that we use um ECP at one of my facilities and we use Alice at another one Alis um so if you want to know a little bit more about EHR type in EHR down below and I'll I'll see if I can do something for you there that's kind of a demo or uh some some instruction there on how to use those systems but you have to document everything and if you don't have an EHR then you better

00:20:03
be documenting it on paper or in a in a Cloud Server somewhere on Google Drive or something like that you have to document everything because when you go back to demonstrate that care you have to provide you have to provide the details of how you have um been providing more care to that Resident so they can see okay there's been more care provided we need to raise the rates for this individual based off of the care that's being provided now I will say not all states are going to allow that um

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and I'm I'm trying to get a little bit more clear on which states do and how it works so that's something I'm I'm trying to do a little bit of research for uh for you on uh really for the people in my Mastermind program so if you want help with that and guidance on how that's going to work and how it's going to help you uh you can apply to that at Alim mastermind.com but those are that's one of the big ways that you can raise those rates the other one is going to be through the state

00:21:00
legislature so this can be through advocacy groups this can be through getting involved in local government um having conversations getting on committees and Boards um and and getting the ear of the people that are in the state legislature um to say our our Elder you know this elderly population this mental health population whichever population you're serving they need more care and they need better care and I can't provide that unless I am able to raise their so I can hire more professionals or better professionals or

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offer more services um you have to that it's a long play to be able to do that but if you're able to get involved at the state legislature level and be serving on committees and getting people's ear um that's another way that you can increase uh those those rates is is getting really involved in in local government to to help out with that now I want to go through this and debunk a few myths and and I probably have done this a little bit for you as we've gone through this but I want to be

00:22:02
very um explicit with with a few of these myths here um Medicaid payments are too low to make a profit I hear that all the time there there's um people that uh they're just like oh Medicaid what do you get for that like $2,000 a month and I'm like no I get like triple that so Medicaid payments are too low to make a profit absolutely a myth um you can you can raise rates in Medicaid they are not that low you you can you can have a sustainable and profitable bussiness with Medicaid residents you

00:22:32
absolutely can second myth is it's too hard to qualify residents for Medicaid now this one is is a little bit tricky so um for a resident I've talked about this a little bit throughout the video today for a resident to qualify for Medicaid there's a few different ways they can do that disability or income related um reasons are the two biggest reasons or ways that an individual can qualify for Medicaid so if you have a resident that's coming into your facility and we've had to do this before

00:23:01
we learned the process of long-term care what it looks like how to help them get certified for Medicaid to receive that benefit or how to recertify or obtain the benefit um from the front uh from the beginning um it can take some time to learn a little bit of that um it can be difficult for certain residents to qualify for Medicare I was just talking with a friend of mine actually that I work with and uh we were talking about medic and he was wondering you know how how does my mom qualify for Medicaid so

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I was like asking a few questions without like trying to probe too deep because I didn't want to get really personal but what I ultimately found out is um his mom owns a house and is uh for that reason was not able to qualify for Medicaid when she applied a few years ago and I told him she's probably not going to be able to qualify again if she still owns the the the property and she still does and so she needs Assisted Living Services what she would then have to do is either do like a reverse

00:24:00
mortgage or sell it and then she'd have to go private pay because she wouldn't qualify for Medicaid unless she implements some kind of a a strategic um process where she puts the house in a trust and then she's not the owner anymore and that asset doesn't exist and then she could qualify for Medicaid these are all kind of strategies that you might want to consider looking at um and how to get people to qualify for Medicaid if they're not willing to turn those assets that they might have into

00:24:29
being a private paid resident and so that's something that I want you to be aware of there there are ways to do that you do have to kind of understand how it works in your state so you can have better conversations with people about how to qualify for Medicaid so it can be difficult but it's not impossible and it's just a matter of kind of doing your research and understanding exactly how it works um to to learn how to really move things forward with Medicaid so it is a bit of that myth is is a little bit true

00:25:01
actually that it can be can be difficult to qualify for Medicaid but if you just spend an afternoon researching your state and Medicaid and get familiar with it you're going to be able to um debunk that myth pretty easily as well and then the third myth here is med Medicaid residents require more care which Cuts in the profits and that is absolutely not the case um you may have a resident that qualifies for Medicare or Medicaid because of dis ability or something like that and they may require more care that

00:25:32
is absolutely true but you could just as easily have a resident who has millions of dollars in the bank that is also disabled and is is more difficult to to work with because they they require more care but they're private pay um each individual comes to you as an individual they each have individual care plans that each have individual needs um and wants and you are as as an assisted living provider you are required and uh you should be meeting those needs understanding their care plans um outlining what that looks

00:26:06
like and understanding how you can then help them meet their needs and help them really progress that is regardless of their status of being Medicaid or not um if and so there there's no there's no correlation um I've not done the scientific research on this but there is no correlation in my mind between a a resident being on Medicaid and requiring more care versus a private pay resident not needing as much care because they're private pay absolutely not the case um it it is very much on an individual

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basis and because of that it's not going to really impact your your profitability there either your requirements in Assisted Living are to provide the care there's going to be a minimum resident caregiver ratio that you need to be aware of in your state um but ultimately it comes back to providing the necessary care to meet the care plans of the resident um that's that's a blank blanket statement that you're going to find um you'll find minimum caregiver to resident ratio but you have to meet the

00:27:05
needs of the residents based off their care plan um doesn't doesn't matter if they're Medicaid or not you're going to have to do that so you're going to adjust your Staffing model dependent on the type of residence that you bring in and you could bring in a Medicaid resident that doesn't need a lot of care that isn't going to C get into your profitability on the flip side you might bring one in that needs a lot of care but your daily rate could go up to $150 $160 a day and excuse me that's not

00:27:32
going to cut into your profitability either because you're increasing their their daily rate by 50 to 60% um and that's going to help you out quite a bit as well and cover um anything that that comes from extra employees or or anything like that so there there's that that myth debunked as well so we went through a lot here with Medicaid to to kind of help you and guide you there if you have any questions then please uh type those in uh and I will get to those here as well for you um and and and help

00:28:02
you out U before as you're typing in those questions though I want to remind you to like the video subscribe and ring the bell as well so you get notified when we do these live sessions uh to help you out and and give you some extra guidance and and when we drop new content on on YouTube and and make sure you're you're in the Facebook group and um turning on notifications and and things there so you get notified when we put information out um there uh and want to remind you as well if you are

00:28:25
interested and need some help go apply to The Mastermind program Ali mastermind.com would love to see if I can help you out and give you some guidance and help you along your path to help you launch your assistant living business in the next 12 months it's something that I I love doing love coaching people we also are doing a holiday sale right now um so if you are watching this and it's it's live for the next three weeks we're going to be doing a holiday sale if you go to Assisted

00:28:49
Living investing. net holidaysale um you'll be able to get that um check out our our emails um as well we're going to be sending that out or you can just type in Holiday down below and I'll send you the link um so you can so you can make sure you get take advantage of that because we've got a good sale going on um right now with with some of the different products and and updates and things that we're putting out um in just with our content and then as another housekeeping note I

00:29:14
will not be here next week um to do a live so we're going to skip a week um and you guys will be fine with how we get back to our normal Cadence um the the week after that okay so I'm going to check on our our comments here if you have any questions again please Ty those in and I will get to those for you here um but Phyllis has commented on all the things that I that I asked for so thank you phis I I'll be sure to um do all those things so 1,200 um for for how we got to 1,200 a month for for Medicaid

00:29:47
for a Medicaid room um our assessment um I'll I'll keep the note of that to to do something on assessments as well and EHR to kind of go through EHR systems um and how to use those um to to the best that you can find so thank you for watching and for commenting on those as well um with that um I want to thank everybody again for watching I remind you to get over to the website get that free business plan checklist this sis theiving investing. netv checklist free tool to help you really get started and and make some

00:30:20
good progress on building a business plan um and and help you you know achieve your goal um i' love doing that and uh just want to remind you uh as well does does residential Assisted Living sound interesting to you but you don't know how to get started at Assisted Living investing I'm here to help beginners like you launch their Assisted Living business in the next 12 months I love helping people coaching people and and helping you along your along your path apply to The Mastermind

00:30:44
Alim mastermind.com and uh remember it doesn't take a lot just a little bit just keep going step by step by step and I promise you if you do and you're consistent and persistent you're going to be successful thanks for watching and have a great day