In-house Medicare Advantage plans have emerged as a hot trend in the skilled nursing space, as operators look for ways to take control over their reimbursement destiny — and a new study shows that the model could have real benefits for both patients and Medicare at large.
Members enrolled in insurance giant UnitedHealthcare’s Institutional Special Needs Plans (I-SNPs) saw 51% lower use of emergency department (ED) visits, 38% fewer hospitalizations, and 45% fewer readmissions than their regular Medicare fee-for-service counterparts, according to a study published Thursday by the American Journal of Managed Care.
At the same time, SNF usage among I-SNP enrollees was 112% higher than the control group of traditional Medicare residents.
Researchers Brian McGarry and David Grabowski of Harvard Medical School focused on more than 8,000 I-SNP beneficiaries enrolled in 2014 and 2015; these residents, all covered under UnitedHealth’s I-SNPs, spanned 755 nursing homes in 13 states. For comparison, they also analyzed the utilization and spending associated with nearly 13,000 fee-for-service Medicare beneficiaries across the same 13-state footprint.
Critically, UnitedHealthcare waives the three-day hospital stay requirement for residents to receive Medicare-covered skilled nursing services — while also providing a higher level of care through the use of advanced practice clinicians such as nurse practitioners and physician assistants.
“By identifying and treating a patient’s change in condition early via appropriate medical management overseen by the I-SNP’s advanced practice clinicians, combined with the coverage of SNF services not otherwise available under traditional Medicare absent a prior hospitalization, unnecessary and avoidable ED visits and hospitalizations can potentially be reduced,” McGarry and Grabowski wrote.
Those trends could translate to spending declines: Among I-SNP residents, the researchers calculated total inpatient costs at $7.5 million per 1,000, as opposed to $9.2 million for the fee-for-service beneficiaries.
“In total, if FFS Medicare beneficiaries exhibited the same inpatient, ED, and SNF utilization patterns as I-SNP beneficiaries, the Medicare program would spend $1.65 million less per 1000 beneficiaries,” McGarry and Grabowski concluded. “Given that nearly 1 million long-term nursing home residents nationwide are in FFS Medicare, the program would spend roughly $1.6 billion less annually on these services if we applied the rates from the I-SNP enrollees.”
That said, the researchers cautioned that those figures do not account for the costs associated with running an I-SNP, or the fact that fee-for-service enrollees may have significant demographic differences from people who elect to join an I-SNP.
Those I-SNP costs can be steep: American Health Plans executive Hank Watson last month estimated startup capital needs at $1.5 million to $2.5 million per state. In addition, providers should have a clear path toward eventually enrolling 1,000 residents to make the decision to launch a plan worth it, according to Watson.
Still, McGarry and Grabowski said their findings could encourage lawmakers to provide additional funding for SNFs to boost their clinical capabilities, while also adding to the evidence that the three-day stay rule should be eliminated entirely — a concept that’s gained support from Centers for Medicare & Medicaid Services (CMS) administrator Seema Verma.
“Although many policy makers have been reticent to relax the three-day rule in traditional Medicare FFS due to fear of increasing utilization, this flexibility is an important element of MA plans and other at-risk models (eg, accountable care organizations, bundled payment initiatives) that facilitate the delivery of skilled care in a lower-cost setting,” the researchers wrote.