Nursing home operators face numerous regulatory, operational, and legal risks that require careful management and strong relationships with commercial insurance carriers and brokers. These relationships are crucial in mitigating costs, especially in the face of rising insurance premiums and increased administrative burdens. This article delves into the essential aspects of nursing home risk assessment, emphasizing the importance of robust commercial insurance strategies and effective cybersecurity measures.
The Evolving Landscape of Nursing Home Insurance
The nursing home industry has seen significant changes in insurance practices due to heightened regulatory oversight. Mary Oliver, Vice President of Risk and Regulatory Compliance at Brickyard Healthcare in Indiana, highlights how commercial insurance has evolved to incorporate more rigorous risk assessments and data-driven underwriting processes. Brickyard Healthcare, operating 23 facilities, has had to adapt to these changes.
“Insurers are employing more rigorous risk assessment models to comply with regulatory requirements, resulting in more detailed, data-driven underwriting processes,” Oliver stated. “Compliance with regulatory requirements often leads to higher operational costs for insurers too, which are typically passed on to policyholders in the form of higher premiums.”
The Impact of Increased Regulatory Requirements
Regulatory compliance has increased administrative costs for insurers, necessitating enhanced reporting, documentation, and compliance monitoring. These added requirements have resulted in higher premiums for policyholders. Steve LaForte, Director of Corporate Affairs and General Counsel for Cascadia Healthcare, underscores the impact of these changes on the industry. Cascadia Healthcare, which operates 58 facilities across five Western states, has faced challenges maintaining manageable insurance costs.
“Underwriting becomes tougher, exclusions have become more rife,” LaForte noted. “One of the things that we’ve found that has led to our relative success is having a strong commercial insurance risk management partner.”
The Role of Cybersecurity in Nursing Home Risk Assessment
Integrating cybersecurity into nursing home operations has become increasingly important, especially following high-profile cyber attacks like the one on Change Healthcare. Nursing home operators invest in education and advocacy efforts to address cybersecurity risks amid inadequate funding.
LaForte explains that cybersecurity and insurance programs are closely linked, with significant changes in cybersecurity insurance over the past nine years. Cascadia Healthcare has developed strong partnerships with outside brokerage risk management organizations to support cybersecurity education and best practices.
“We brought them in and we have them do educational programming. We’ve had them help us with creating best practice protocols within the organization,” said LaForte.
Addressing Cybersecurity Costs and Funding
Funding cybersecurity improvements is a major challenge for nursing home operators. LaForte emphasizes the need for collaboration between the Centers for Medicare & Medicaid Services (CMS) and state survey agencies to provide adequate funding for cybersecurity initiatives. The costs associated with cybersecurity integration and compliance are substantial and require significant investment.
“The Change attack really pointed out the hole that exists relative to post-acute care, long-term care, relative to the HITECH Act, and funding for cybersecurity, integration between electronic health record systems,” LaForte explained. “Hospitals are all integrated. We are not. We’re not integrated with them and the money it takes to integrate and change systems on a massive, sector-wide basis is huge.”
Implementing Effective Cybersecurity Protocols
Nursing home operators must implement stringent protocols to mitigate cybersecurity risks and maintain a robust IT and compliance team. However, balancing these cybersecurity measures with the primary goal of providing quality care can be challenging. LaForte describes the difficulties of maintaining high-security standards while ensuring care providers can efficiently perform their duties.
“It’s tough because the cost is high, and the protocols are high,” LaForte said. “Not everybody does well in the protocols, when you have to do two-step verification every time… I’m surprised I have any air left because the protocols that we have to jump through are huge. But I also understand why we have to do it.”
Best Practices for Nursing Home Risk Assessment
Conducting thorough risk assessments before implementing new technology is crucial. Oliver advises assessing a vendor’s reputation, history of data breaches, and security protocols to ensure compliance with relevant regulations. A comprehensive education program for staff is essential to integrate new technology and alleviate workloads successfully.
“It’s good practice to conduct a risk assessment before implementing new technology,” said Oliver. “Assess the vendor’s reputation, history of data breaches, and security protocols, and make sure they comply with relevant regulations.”
Conclusion
Effective nursing home risk assessment requires a multifaceted approach that includes strong commercial insurance partnerships, robust cybersecurity measures, and comprehensive risk assessments. By staying proactive and informed, nursing home operators can navigate the complex regulatory landscape, manage rising costs, and ensure the safety and well-being of their residents.
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