Medicare Advantage plans have emerged as one of the strongest pressures on skilled nursing occupancy and margins in recent years, and operators have scrambled to find any possible way to adapt.
Many have found reason for optimism in calls to embrace data analytics as the key to survival: Prove your worth to Medicare Advantage plans and other payment partners with clear information on outcomes, the thinking goes, and referrals and profit will soon follow.
But one leading industry voice says that advice might not actually work in real life, and providers will have to take new paths toward the top of the payment food chain.
Anne Tumlinson, CEO and founder of consulting firm Anne Tumlinson Innovations, talked about why she isn’t comfortable telling operators to rely solely on data and technology to succeed on the latest episode of “Rethink: The Future of Skilled Nursing” — the new podcast from the team at Skilled Nursing News.
Tumlinson has spent years in the government payer landscape, overseeing the Medicaid program as part of the federal Office of Management and Budget and founding the post-acute and long-term care consulting arm of Avalere Health. Today, she advises clients through her own firm and runs Daughterhood, a consumer-facing website that helps guide users toward the right care choices for their aging family members.
In her interview for “Rethink,” Tumlinson identified the reasons why consumers choose Medicare Advantage plans in the first place, and how providers can learn to live within the new reality of lower reimbursements and shorter lengths of stay.
Here are a few of the highlights from the interview, but if you want to hear the full conversation, head to the iTunes and Google Play stores — as well as Soundcloud — to download the full podcast episode for free today. And if you like what you hear, subscribe to make sure you don’t miss the next conversation with a skilled nursing leader.
How Medicare Advantage plans enforce length of stay
Every insurer is different, but they set up a break point, where, past which — and that’s usually under 10 days — every day after that has to be evaluated. They’re looking at things like: From a clinical perspective, can this person theoretically go home and do fine at home? They don’t care if that family doesn’t have services and supports in place at home to care for somebody who may not yet be ready to go home. That’s not part of their evaluation criteria.
They’re really just looking at: Has this rehab stay done the bare minimum that it was supposed to do, which was literally just, get that person out of the hospital, stabilize them, and get them from an acute medical event to a situation where they could be at home. And how that person is supported at home is just not their concern.
Why consumers like Medicare Advantage
The reason why Medicare Advantage is growing so quickly is because consumers are increasingly in need of solutions to health care out-of-pocket costs. Medicare fee-for-service has a lot of gaps in it, and if you don’t have any kind of supplemental insurances, you face significant out-of-pocket cost liability from deductibles and co-payments. You don’t have any catastrophic cost protections.
Medicare Advantage, that is the number one thing that it does: it is, by law, required to cap out-of-pocket catastrophic costs. These plans compete on price. If you go into the marketplace and you try to buy a Medicare Advantage plan, you’ll see they’re offering deals: You can get the traditional Medicare package plus some dental, plus something else, and it’s going to cost you less than if you stayed in traditional fee-for-service.
Consumer challenges with Medicare Advantage plans
One of the chief pain points that I hear about in the caregiving journey is actually around the Medicare Advantage utilization management techniques in skilled nursing. I get a lot of e-mails from folks who say: “My mom’s only been in for seven days. I really need her to get three more days, and they’re kicking her out.” That’s how they’ll always say it: “They’re kicking her out.”
And I’ll always say: I think your mom must be on a Medicare Advantage plan, because I know for sure that if she weren’t, you wouldn’t be having this conversation with me until day 27. It’s interesting to hear the consumer perspective on that particular aspect with post-acute care when their parent is in Medicare Advantage.
How providers can navigate both new payment models and the fee-for-service world
I don’t feel comfortable anymore saying: “Oh, just invest in technology and quality and data and nurse practitioners and you’ll be perfectly positioned, and you can march yourself into the ACO [accountable care organization] and have a shared savings arrangement or higher volume” — because I have not seen that actually work in real life.
And so the conclusion that I have come to is that you’ve got to get your foot out of the other canoe as early as possible. As much as you can as a provider, really think about the different strategies you can employ to be farther up the food chain and in control of what we call the premium dollar as much as possible. How can you put yourself in a position in your market so that you’re driving the health care decision from the perspective of holding the health care risk and distributing the health care dollar?
On the new Patient-Driven Payment Model
The thing about this that I really like for the industry, specifically, is that this is how the rest of health care is reimbursed. This is how managed care is reimbursed — IRFs, LTACs, physicians, you name it. For the most part, everyone is paid based on the characteristics of the patient, not based on the types of services that are provided.
So when you’re having a conversation with a hospital and you’re working collaboratively with them, there’s not this needle on a record — they come from the hospital where they’re being paid based on ICD-10s, and they enter into the SNF, and suddenly it’s: How many minutes of therapy can they get? And it’s really hard to build those clinical partnerships around such diverse sets of incentives. You hear SNFs saying: We want to be medical providers in the health care delivery system. And this sets them up for that.
Why providers might not be ready for PDPM
There’s too many, at least in just my travels, who say to me things like: “We’re going to hire an ICD-10 coding company to come in and make sure we’re coded correctly.” Or: “This is just a matter of making sure everybody’s trained on ICD-10 codes.” Or: “Our therapy company said that everything’s fine, and they can handle it for us.”
This idea — that somehow, this change in payment is really just about a change in documentation and coding — is going to result in organizations failing to capture the revenue that they should be capturing, first and foremost.
I think there’s not enough overall understanding, despite heroic efforts by the trade associations. I don’t know that CEOs are comprehending that this is a strategic change in their business — where they’re positioned in the market, how they operate their business, how they use their resources, how they take care of patients. It really requires that level of thoughtfulness, and I don’t know that the vast majority of organizations have fully grasped that yet.