In-House Health Plans Provide Path Out of Managed Care Pain for Operators

As the long-term health care industry moves into a value-based payment world, a special type of Medicare Advantage plan could offer skilled nursing providers a path to get ahead.

In fact, institutional special needs plans (I-SNPs) could be the future for skilled nursing facilities battered by the changes in reimbursement, the move to value-based models such as accountable care organizations (ACOs), and the growth of Medicare Advantage.

“Is anybody seeing anything but pain or pressure from those alternate programs?” Marc Zimmet, president and CEO of Zimmet Healthcare Services Group, said during a presentation at the American Health Care Association’s annual conference and expo in San Diego on Tuesday. “ACOs have been very tough on my clients in particular. I-SNP is the only way for us to participate in a structural capacity and be rewarded for quality.”

A path forward, but not for all

An I-SNP is an optional Medicare program that is available only to long-term care patients, and SNFs are increasingly interested in exploring the plans. The number of I-SNP options has increased from just 65 in 2015 to 113 in 2018, according to data from the Centers for Medicare & Medicaid Services (CMS) cited in the presentation at AHCA. Enrollment in such plans has grown apace, rising from 50,007 in 2015 to 75,451 in 2018, according to CMS.

Even though there is some risk involved in moving into the plans, the results can be significantly positive. Skilled nursing and assisted living provider Marquis Companies, for one, saw improved outcomes when it made the jump, according to chief financial officer Steve Fogg.

“What we’re seeing is improved outcomes,” Fogg said at the National Investment Center for Seniors Housing & Care (NIC) Spring Investment Forum in Dallas in March. “We’re seeing lower hospital episodes, better quality outcomes, better experiences for the resident.”

Making the move into such a plan, though, takes considerable work, Melissa Powell, president and chief operating officer at Brooklyn-based Allure Group, emphasized.

“The reason I stuck by it was we were struggling with census,” she said at the AHCA panel. “And I was able to say in my mind, if I can make this work, and I can get my long-term care (LTC) to stay in my house … we can build from there. But it took a very long time. None of this happened in a year.”

One of the most important points to consider is that an I-SNP is an optional plan for residents, and a provider cannot require that its LTC patients enroll.

“The SNF contracts with the plan, but it is up to the individual beneficiary to decide to enroll,” Zimmet said.

In addition, the hospitalization rate — or the rate of the LTC population that is going into the hospital — is crucial, since in the world of I-SNPs, success depends on the outcomes of the long-term care population.

And if a SNF is particularly struggling with rehospitalizations, or is lacking in scale, it probably isn’t a good candidate to take part in I-SNPs, Zimmet added.

“[The question is] ‘is it right for me?'” he said. “Because it’s not right for everyone.”

Moving into new world

Making the transition into the world of I-SNPs could be a key step in preparing for the future of skilled nursing. With the new Patient-Driven Payment Model set to take effect on October 1, 2019, having experience with I-SNPs could be a leg up for providers — especially since that payment model indicates that CMS is moving toward paying for value, rather than volume.

I-SNPs are a good introduction to taking on the risk necessary in such a landscape, Zimmet explained at AHCA. Along with PDPM, the growth of Medicare Advantage is another indicator that the world of LTC is going to value, and SNFs have to be ready for it if they want to survive.

“Under any payment change, if you don’t change behavior, if you don’t get ahead of it, you’re going to be a loser,” Zimmet said on the panel. “You want a seat at the table, this is our only way in at this point.”

Written by Maggie Flynn