Genesis Exec: ACOs May Work Better Than I-SNPs for Skilled Nursing Facilities

Skilled nursing providers, seeking more control over their own destiny and the premium dollar, have been driving the growth of a specific subtype of Medicare Advantage plan designed for the care of patients in the institutional setting.

But Jason Feuerman, senior vice president for strategic development and managed care at nationwide operator Genesis HealthCare (NYSE: GEN), argued that providers should consider a model that many SNFs see as their enemy: the Medicare Shared Savings Program (MSSP) accountable care organization (ACO).

“Why partner with an MSSP like us? Why participate in it?” he asked rhetorically Thursday at the Senior Care 360 conference, held in National Harbor, Md. “We’re not passing on any downside risk to anybody that participates with us; we are retaining all the risk.”

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Genesis has built a physician-led MSSP ACO geared exclusively to long-term care residents, which Feuerman argued is an overlooked model for long-term care providers. The Kennett Square, Pa.-based Genesis entered the program in 2016 on Track 1, a model under which the company could earn 50% of the upside with no downside risk — making it “a very easy sell to my CEO and my board,” Feuerman said.

Genesis generated about $8 million in savings in 2016, but that didn’t meet Medicare’s minimum threshold to receive a shared-savings bonus, he said. In 2017, its ACO generated a loss, but when Genesis receives its reconciliation for 2018 in about three weeks’ time, it expects to achieve savings, he said.

In fact, Genesis’ confidence extends beyond last year when it comes to its ACO.

“We’ve entered a new five-year contract period, and we’re very confident that we’re going to see savings doing that entire five-year contract period,” he said. “We’ve observed improved provider satisfaction. We’ve been able to differentiate the business with our payers and our hospital partners.”

When comparing ACOs with institutional special needs plans (I-SNPs), Feuerman pointed out that there are some significant hurdles to entering the Medicare Advantage space. For one thing, providers need a lot of capital in reserve to become in an insurance plan.

“In [the MSSP], there is no regulatory capital required,” he explained. “You’re not assuming insurance risk. While you are assuming risk, that risk is repayment to Medicare, but you’re not assuming insurance risk like you do with the Medicare Advantage I-SNP program.”

The number of I-SNP plans jumped almost 30% from April 2018 to April of this year, and an analysis from late 2018 found that long-term care providers were driving the growth in these types of plans.

“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, 2018. “I think in general, the ACOs and the bundled payment models have been disappointing from the SNF side.”

Another factor in Medicare Advantage’s favor is that the government appears to have confidence in it, CLA’s Jennifer Boese said in a recent webinar on I-SNPs. By adding telehealth as a basic benefit for Medicare Advantage and giving the plans the capacity to expand supplemental benefits, the Centers for Medicare & Medicaid Services (CMS) is showing confidence in the program, she argued.

But when it comes to whether or not providers should launch their own plans, Feuerman listed several potential hurdles. For one, there will be more regulation; MA plans have to deal with CMS — both on the federal and regional-office levels — as well as the departments of health and insurance in every state where the provider has a presence.

Moving into an ACO also means less work upfront for SNFs.

“There is no need for a provider network; everything’s being run off of Medicare,” Feuerman argued. “There’s no need to pay claims; Medicare is doing all that for you … There’s no need to market or create any materials to get people into the program; they’re being attributed through physician billing.”

That said, there is room for I-SNPs and ACOs to work together, he said. An I-SNP will naturally have limited penetration, and an MSSP ACO allows the SNF to benefit from the long-term care residents who opt out of enrolling in an I-SNP.

In addition, Genesis has taken an all-in approach when it comes to sharing the wealth — a point of contention for SNF executives, who sometimes contend that they’re generating savings without seeing upside.

“Any savings that we generate are being shared with everybody — the physicians and the SNF,” Feuerman said. “So everybody’s rowing in the same direction. The physicians, when they get the call at 2 o’clock in the morning, are incented to ask a few more questions before just sending [the patients] out.”

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