After Generating $1.7M, Genesis Looks to Expand In-House ACO Outside of Its Centers

The skilled nursing world has become increasingly focused on gaining control of the premium dollar as a way to navigate a tangled thicket of payers. And while most attention has been on the Medicare Advantage model, one major operator sees opportunity in an arrangement that many SNFs dread: the accountable care organization (ACO).

In its most recent earnings call, the Kennett Square, Pa.-based Genesis HealthCare noted that its ACO generated $1.7 million in related payments from the Centers for Medicare & Medicaid Services (CMS) in the most recent quarter. The funds were a reward for meeting the cost-cutting benchmarks set under the Medicare Shared Savings Program (MSSP) in 2018.

Genesis recently renamed its ACO as “LTC ACO,” as part of a push to expand its current enrollment of 6,400 Medicare beneficiaries and go outside its own centers.

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Specifically, Genesis is looking for an additional 3,000 members from third-party, non-Genesis facilities in 2020, Jason Feuerman, senior vice president for strategic development and managed care at Genesis, told Skilled Nursing News.

“Beneficiaries aren’t signing up for this,” he noted. “This is all coming through attribution from physicians.”

Under the ACO model, groups of health care providers provide coordinated care for Medicare patients. By hitting specific benchmarks set by the federal government, the providers can share in the savings generated for the Medicare program.

Genesis’s physician-led ACO is geared specifically toward long-term care residents, and at the Senior Care 360 conference in National Harbor, Md. earlier this year, Feuerman argued that the ACO is an overlooked model for long-term care providers — which have mostly focused on moving into the insurance world via the institutional special needs plan (I-SNP) model.

That’s not to say that the I-SNP model doesn’t have upsides. In fact, Genesis CEO George Hager argued that the ACO model is quite similar to the I-SNP – “just administered differently.”

“We just believe that even though there’s pluses and minuses to each program, there are some things that make the ACO potentially slightly easier to implement and administer, and maybe even to grow,” Hager said.

That’s because an I-SNP is its own insurance platform, but with many of the same focus areas of an ACO: caring for residents in place whenever possible, and an emphasis on reducing unnecessary hospitalizations, Feuerman noted.

“So it’s actually the same program just sitting on another financing platform – a much more capital-efficient platform,” he told SNN.

This was a topic Feuerman explained at the Senior Care 360 Conference in National Harbor. Under the I-SNP model, providers need a significant amount of capital in reserve to become an insurance plan, for example. And there are several barriers and challenges in the insurance world that SNFs have to navigate as they move into I-SNPs.

“You need to look at all the health plans that were started by medical groups and hospitals that didn’t survive,” René Lerer, CEO of Longevity Health Plan, cautioned on a recent episode of SNN’s Rethink podcast. “Because it’s not that easy.”

For Genesis, moving into the ACO model made sense, given the operator’s scale and its physician practice. In 2006, the acuity of the operator’s population was increasing and nurses were dissatisfied with their inability to communicate with physicians when patients had a change of condition. And physician or advanced practitioner presence in nursing homes was limited, an issue that continues today, Hager explained.

That was why it built Genesis Physician Services, a physician group with primary jobs inside Genesis facilities, he said. Because of its scale and its physician group, the operator was then able to create “the only ACO sponsored by the post-acute community,” Hager said.

Another perk, from Genesis’s point of view, is the fact that the various health care reform initiatives — from bundled payments to ACOs that are sponsored by physicians and hospitals — tend to come at the expense of SNFs.

“Many of those organizations that now have a financial incentive to manage care more aggressively have looked for different ways to divert or shorten lengths of stay in skilled nursing,” Hager said.

Genesis has specifically entered into a risk-based track that lets the physicians “get out of the way of certain penalties” under the Merit-based Incentive Payment System (MIPS) and provide them with a 5% bonus under the Medicare Access and CHIP Reauthorization Act of 2015, Feuerman said. That helps accelerate the growth of the program, he said, and it allows physicians to stay as independent as possible.

The other advantage of the model is that the health care market is demanding better quality from providers on every front, in terms of both outcomes and readmissions. The work on the ACO has let Genesis fit snugly into the world of managed care payers and hospitals in a way where incentives are aligned — from quality measures to readmission measures to Five Star ratings.

“We’re really creating a new financing mechanism with this ACO, and it’s something that we’re very proud of,” Feuerman said.