Skilled Nursing News Coverage
Fresh Off Private Equity Pickup, Wound Care Provider AMT Seeks Skilled Nursing Expansion
By Alex Spanko | September 10, 2020
A leading wound care provider sees expansion opportunity in both skilled nursing and the home despite the ongoing strains of COVID-19, with a recent private equity investment to back it up.
American Medical Technologies in late August announced its acquisition by private equity firm One Equity Partners and investment management company The Silverfern Group, capping off a process that AMT CEO Sam Muppalla said started with a desire to team up with investors that understood the connection between patient care and financial upside.
“When we looked at an investment partner, we wanted somebody who understood that creating good clinical outcomes is actually good business, and I think we got that from One Equity Partners and Silverfern,” Muppalla told SNN. “They have assets in the space, and they really understand it.”
One Equity Partners was the in-house PE arm of banking heavyweight JPMorgan before spinning off into its own entity in 2015; the firm’s health care portfolio includes companies such as inpatient rehabilitation hospital operator Ernest Health and home health equipment supplier AdaptHealth.
The terms of the AMT deal were not disclosed.
As with other third-party service providers in the space, AMT positions its offerings as a way to both bolster resident care at skilled nursing facilities while also reducing overall health care costs. That consideration was key even before the COVID-19 pandemic, as the Irvine, Calif.-based company looked to expand its service base of more than 6,200 long-term and post-acute care facilities.
“There’s increasing pressure on them to take higher-acuity patients,” Muppalla said. “Increasingly, patients coming in the door have a higher number of co-morbidities, and that compromises the skin, which leads to more complex wounds.”
But that acuity level doesn’t necessarily stop once a resident is discharged from a facility, making a push into the home a vital part of AMT’s long-term strategy. Muppalla gave the example of a diabetic ulcer that. With treatment that costs about $1,000, such an intervention can prevent future complications that might require the drastic step of amputation — a procedure with a profound effect on a senior’s quality of life, as well as a $70,000 episodic cost.
The home setting can be particularly difficult for long-term wound management, especially if the patient relies on a related family caregiver for most day-to-day support.
“They don’t want to necessarily talk about wounds on their legs. How do you get wound care to a modality where access is possible by the patient, and it’s something easy, something transparent, something the family can support?” Muppalla said.
Preventing wounds in the nursing home setting — and, subsequently, the home — marks the second pillar of AMT’s plans for its PE funding, primarily through educational support and dedicated care programs.
Prior to the start of the COVID-19 pandemic, that alignment was a top payment concern for forward-looking skilled nursing operators: With value-based purchasing models and managed care plans increasingly using hospital readmissions as a metric for both sending referrals and handing out penalties, the fate of residents once they leave the SNF still has a impact on the operator’s bottom line.
“We’re really thinking in terms of: How do we align ourselves with the health of the patient, to health of the skilled nursing home or the home health agency we’re working with [so] they all can get aligned around prevention?” he said.
The Patient-Driven Payment Model (PDPM) for Medicare Part A beneficiaries, which took effect last October 1, also links reimbursement levels with acuity, increasing industry interest in specialty third-party services such as speech therapy and dialysis. While AMT currently bills under Medicare Part B, which covers long-term residents, and Medicare Advantage plans, the company sees opportunity in expanding into the skilled side of the house as well.
AMT has registered an uptick in demand for its services amid the ongoing COVID-19 pandemic, particularly as nursing home staffs have struggled under the weight of quarantines and illness — even if its interventions have had to shift from the bedside to parking lot meetings amid ongoing restrictions on outsiders entering facilities. But as with so many other medical conditions, wounds aren’t going away amid COVID, and it remains important for providers to keep up with residents’ chronic health issues.
“Yes, we are dealing with basics. But we are also chewing gum while we move, and I really admire the skilled nursing homes for being able to do so many things,” Muppalla said.
Content Credit: https://skillednursingnews.com/2020/09/fresh-off-private-equity-pickup-wound-care-provider-amt-seeks-skilled-nursing-expansion/
Graphic Credit: https://pixabay.com/photos/compass-antique-map-of-the-world-429772/
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