As Managed Care Grows, Skilled Nursing Providers Have Leverage

Skilled nursing providers are adding value for managed care payors, and they need to be willing to tout it in contract negotiations, according to one executive.

“[Managed care] is coming your way,” Anthony Laflen, director of data analytics at Consonus Healthcare, told a room full of nursing home operators at LeadingAge Illinois’ annual conference in Schaumburg, Ill. “If you think it’s not, I’m telling you, it’s coming. It’s going to be the next, biggest thing for everyone.”

Marquis Companies, the parent company of Consonus, launched its AgeRight institutional special needs plan (I-SNP) in January 2017 and gives the company a measure of control in the managed care landscape, Marquis chief financial officer Steve Fogg said at the National Investment Center for Seniors Housing & Care (NIC) Spring Investment Forum in Dallas.


In addition, the Centers for Medicare & Medicaid Services (CMS) granted AgeRight permission to expand beyond Marquis’ facilities to the Portland, Ore., metropolitan area, Laflen told SNN on the sidelines of the LeadingAge Illinois conference.

Data is power

Managed care is doing particularly well in the Pacific region, and Oregon, where Marquis Companies is based, is no exception. The state is at 67.51% managed care organization (MCO) penetration, second only to Minnesota’s 67.83% penetration, Laflen said in his presentation.


As a result, the managed care plans have considerable power in contract negotiations. Realizing this, Marquis wanted to understand what drove health plans and cultivate up-to-date data on its own patients, rather than the months-old publicly available data on Nursing Home Compare the plans were using in the negotiation meetings. Laflen also noted the Nursing Home Compare data only includes Medicare patients, rather than Medicare Advantage ones.

Consonus recently partnered with Collective Medical Technologies to transmit patient data in as close to real time as possible, and Laflen stressed the importance of getting a handle on data throughout the presentation. By gathering data, SNFs can learn the value they provide to health plans through offering vaccinations, diabetes care, and other elements of care that lead to the health plan seeing an increase in reimbursement and other elements that eventually help health plans increase reimbursements, he told SNN.

First, however, they have to know the insurance plan’s model of care (MOC), which Laflen said is “basically the health plan’s game book” for convincing CMS to provide funds to the health plan for managed care.

“As a result of understanding their playbook a little better, we’ve been able to go into the contract renegotiations a little better armed,” Laflen told SNN. “That has evolved to episodic payments.”

Taking on risk

For the facilities that have a strong grasp of their data — including readmissions, resources a given patient will consume, and costs by diagnoses and payer — Laflen recommended that SNFs push to receive episodic payments when in negotiations with managed care payers.

Marquis did this, asking payors for a flat rate to manage patients, using specific benchmarks for readmissions. If the readmission rate at facilities that have contracted with a payor is above a given threshold, Marquis writes the payor a check; if below, Marquis receives a bonus check from the payor.

But SNFs need to be careful if they want to enter this type of arrangement, Laflen cautioned. In doing so, they’re essentially saying they will reduce length of stay, when appropriate, while making a profit, in effect committing to reducing census, he explained.

“In the negotiations, it’s critical that you make sure you are part of a limited number of SNF beds in the market, so that when more patients are discharging from the hospital systems with a [managed care] payor type, they have to come to your building,” he said. “If you don’t have that kind of leverage, you could just be opening the door to let patients walk out. But by backfilling, and making sure you have some form of almost exclusivity, you’re assuring yourself of getting more patients from the same payor.”

Written by Maggie Flynn

Companies featured in this article:

, ,