As Medicare Advantage continues to capture a greater share of seniors, some skilled nursing providers are looking to get a head start by becoming insurers themselves.
Operators have found institutional special needs plans (I-SNPs), a special type of Medicare Advantage program that covers beneficiaries in need of in-home nursing care or confined to an institution, to be a useful tool in a period of low occupancy and evolving payment models. And more want in on the action.
“We’re seeing more and more of our members pursue I-SNPs,” David Gifford, senior vice president for quality and regulatory affairs at the American Health Care Association, said at a Politico Live event on March 21. “I think in general the [accountable care organizations] and the bundled payment models have been disappointing from the SNF side.”
Who should try it
Moving into I-SNPs isn’t ideal for all providers, however.
“They need to have some scale, because it’s expensive to run a health plan,” Mary Hsieh, managing principal at consulting firm Health Management Associates, told Skilled Nursing News. “So with single-home operators, it’s harder to gain scale. But if you have a group of nursing homes coming together, or if a nursing home operator owns multiple nursing homes, that’s a good place to start.”
They also have to have a strong understanding of the risks and rewards in the decision, a good grasp on care management — particularly care transitions — and primary care, Hsieh added.
Another crucial element is everyone outside the provider’s walls.
To operate a health plan, there needs to be a sufficient number of providers to meet network adequacy, Hsieh explained. These include hospitals, primary care, and even pharmacies, and the Centers for Medicare & Medicaid Services (CMS) is quite strict about this requirement; plans are required to have a certain number of provider types within a defined driving distance.
“It’s very difficult for a nursing home operator to do that because you’re not in the business of doing network contracting, and that’s kind of one of the core functions of a health plan,” she said. “But there are partners that could potentially do that.”
Making a move in the Midwest
As of March of this year, there are 49 contracts with Medicare covering 97 I-SNPs, with a total of 73,472 enrollees, according to data from CMS’ Health Plan Management System.
One of those I-SNPs is Great Plains Medicare Advantage, which offers plans in South Dakota, North Dakota, and Nebraska — and is owned by the Evangelical Lutheran Good Samaritan Society, a not-for-profit that provides a variety of senior care services, including skilled nursing, in 22 states.
“We wanted to diversify our balance sheet, and given payment reform, if you will, this was an opportunity for us to become not only the provider of care but the payer of care,” Kevin Potas, executive director of Great Plains Medicare Advantage, told SNN.
Good Samaritan made the decision to enter the MA space in April 2016, and the plan went live in October 2017. On Jan. 1, the plan was made available to long-term care (LTC) Good Samaritan Society residents in select locations in South Dakota, North Dakota, and Nebraska. As of March, the plan has 612 enrollees across all three states, according to the Medicare data.
AllyAlign Health, a managed services partner, is Good Samaritan’s strategic partner and a minority owner in Great Plains Medicare Advantage.
Though Good Samaritan is only three months into its time as an MA provider, it is seeing fewer hospitalizations, preventing hospitalizations and improving care management, Potas said, though he declined to provide specific numbers. One of the goals is to provide preventive and primary care services for Good Samaritan residents where they live, and becoming an MA provider lets the company get ahead of innovative ways of care delivery, Potas said.
It can also help the bottom line.
“Our locations have experienced a more predictable revenue stream as contracted providers to the plan,” Potas said. “And as enrollment continues to increase, those revenue streams will likely increase as well.”
Written by Maggie Flynn