“Sometimes we need to disconnect in order to reconnect with what matters.” — Anonymous Believe it or not, we are now in year two of the global pandemic. While the U.S. appears to be making good progress on vaccinations, many countries are struggling with both the COVID variants and the medical-delivery system required for vaccination of […]
“Sometimes we need to disconnect in order to reconnect with what matters.” — Anonymous
Believe it or not, we are now in year two of the global pandemic.
While the U.S. appears to be making good progress on vaccinations, many countries are struggling with both the COVID variants and the medical-delivery system required for vaccination of the entire population. I am sure that most of you are excited about the transition from winter to spring, as well as the ability to get outside and reconnect. As I was thinking about how many people I needed to reconnect with, it occurred to me that the quote above represented the inspiration for the topic of this column.
We have been disconnected in so many ways since March, 2020. We all have our stories, some positive, most negative. Therefore, I believe that another “Top 10” list is appropriate to address the elements and activities that nonprofit organizations should consider for us to “reconnect with what matters.” I will not be mentioning family, friends, or loved ones. Each of you know that those three groups are most important of all.
Rather, my list is intended to motivate, inspire, and remind board and management-team members of tax-exempt organizations regarding the importance of being as proactive as possible. Addressing the topics that follow in whatever priority order you deem appropriate will provide the foundation and framework for your organization to be successful in the post-pandemic “new normal.” At this point, do any of us know what that will be? Here is the top 10 list.
1. Reconnecting with your board members — cultivate and confirm
Your board members have each been impacted in ways that are known and unknown to the nonprofit CEO who continues to work for them. I strongly recommend that the best approach to cultivate and confirm is to conduct a board survey prior to June 30, 2021. We would be happy to provide you with a copy of our board survey tool, if requested. However, you must remember that remote working environments may forever change the approach of certain board members as to whether they believe face-to-face meetings are necessary for all committee and board meetings. The survey tool should be designed to ask their opinion on any matters that may have resulted from the pandemic disconnect and related process changes.
2. Planned giving and deferred giving
Stock-market valuations have almost doubled since March 23, 2020. Trillions of dollars related to tax-deductible stock donations at market value must be solicited. The recently adopted New York State budget “wealth tax” and the Biden proposal to increase capital-gains tax rates, as well as increasing tax rates for wealthy individuals, should prompt your philanthropic donors to have greater incentive to donate appreciated stock this year.
3. Cybersecurity considerations for re-entering the office workforce from remote operations
The “new normal” includes another epidemic that could be referred to as a pandemic. I’m referring to how remote-working environments have exacerbated the risk of cybersecurity breaches, whether or not your employees are returning to the office. Reinforced training of all staff and establishing routine procedures (e.g., penetration testing) to mitigate risk of a ransomware or cyberattack are now normal expectations.
4. Development of regional provider networks
New York State health and human-service regulators have made it clear for the better part of a decade that advancements in technology coupled with New York State budget pressures have led them to conclude that the number of tax-exempt service providers in New York state is far greater than what is necessary and appropriate for an efficient health and human-service delivery system. Another example that further proves this government perspective was delivered just recently by the New York State Department of Health (DOH). The department received 332 provider applications for organizations wanting to continue to provide consumer-directed personal-assistance services (CDPAS). DOH dropped a bomb in February of this year by awarding contracts to only 68 of the 332 provider applicants. Of equal interest is the fact that most of the 68 awards went to for-profit service providers. The time is now to re-evaluate your organizational strategy regarding provider networks and affiliations that can demonstrate to government funders that you are as efficient and productive as they now demand you to be.
5. Social determinants of health (SDOH) provider networks
Lest you think that your organization need not develop or participate in a regional provider network, you would be wrong. The government pressure on Medicaid and Medicare-service providers to affiliate and form networks has been ongoing for the better part of 20 years. However, there will now be an expectation that SDOH providers (e.g., Foodlink, Salvation Army, Meals on Wheels, etc.) will need to participate in networks to take advantage of the developing opportunities for increased performance-based revenue, described below as Delivery System Reform Incentive Program (DSRIP) 2.0. In addition, managed-care organizations (MCO), foundations, and government payors will continue to emphasize and reward performance-based service targets and pay-for-performance methodologies under the umbrella of the DOH Value-Based Payment (VBP) Roadmap.
6. DSRIP 2.0
For those of you who have forgotten DSRIP 1.0, the $8 billion federal / state reform initiative that ended on March 31, 2020, there may be new life for your regional performing provider systems. The recently adopted New York State budget included a re-submission of the DSRIP extension request denied by the Trump Administration in February 2020. This three-year extension request is likely to be funded in some way through the American Rescue Plan and/or additional advocacy by Sen. Majority Leader Chuck Schumer. Keep your eyes on the status of this extension request and understand that the emphasis for this funding will be on community-based organizations and regional provider networks, including SDOH providers.
7. VBP contracting with MCOs
The concept of VBP, as currently defined, was developed in connection with DSRIP 1.0. For more information, visit the DOH website (https://www.health.ny.gov/health_care/medicaid/redesign/dsrip/vbp_library/). There is much confusion regarding the revenue dollars that can be generated by an individual provider from VBP contracting arrangements. Generally, the amount involved is less than 10 percent of the total contract value, and in many cases, smaller providers should be cautious in any decision that involves downside risk that could result in revenue reductions. VBP, in some construct, is here to stay for the foreseeable future. You must understand it, embrace it, and control your participation relative to risk in relationship to the size and risk tolerance of your organization.
8. Primary care, behavioral health, and SDOH integration
If DSRIP is extended, and VBP contracting continues to expand, it is likely that the integration of formerly independent, autonomous service providers will become a requirement for purposes of contracting with MCOs. Accordingly, it is imperative during the remainder of 2021 to develop, establish, and/or expand your strategy for calendar 2022.
9. Telehealth and telemedicine have leapt forward by 10 years during the pandemic
One of the many elements of the “new normal” is the fact that the acceptance of video conferencing, including telehealth and telemedicine, is and will continue to be a significant component of your daily operations. This technology advancement will require strategic discussion and decisions on maintaining the level of technology sophistication that will be required by third-party payors, most notably the MCOs and health-insurance companies.
10. Administrative efficiencies and outsourcing non-core competencies
Government and third-party payors will continue to demand increased efficiency in all administrative-support functions (e.g., HR, finance, compliance, IT, facilities, etc.). If you look back to the founding of Paychex in 1971 as an example, very few people thought at the time that companies would be willing to turn over their most sensitive compensation and benefits information to an outside vendor. Now, 50 years later, outsourcing of essentially all administrative-support functions is viewed as normal business practice. As you reconnect with your board, strategic assessment of non-core competencies and the possible cost efficiencies to be gained must be a component of what will become the “new normal.”
Gerald J. Archibald, CPA, is a partner in charge of the management advisory services at The Bonadio Group. Contact him at (585) 381-1000, or via email at garchibald@bonadio.com
