National skilled nursing giant Genesis HealthCare (NYSE: GEN) continued its drive to bring more outside operators into its accountable care organization (ACO) this week, announcing a new accord with Senior Living Properties.
Under the terms of the deal, the Fort Worth, Texas-based Senior Living Properties will see some of its buildings — along with select physicians who serve residents at its 37 skilled nursing and long-term care sites across Texas and Oklahoma — participate in the LTC ACO, Genesis’s Medicare Shared Savings Program (MSSP) vehicle.
Formerly known as the Genesis HealthCare ACO, the LTC ACO represents the Kennett Square, Pa.-based operator’s attempt at getting ahead of new payment models, serving both Genesis buildings and outside operators. This past December, Genesis trumpeted the addition of 200 non-affiliated nursing homes and other long-term care facilities to the ACO, a kind of alternative payment model that encourages providers along the care continuum to work together and reduce overall Medicare spending — while improving resident outcomes.
The Senior Living Properties partnership comes with no downside risk for the skilled nursing operator, according to Genesis, with no upfront capital expenditures required; the provider stands to share in any cost-savings bonuses while also potentially seeing reduced hospitalizations and improved care coordination.
“We are excited to join LTC ACO on its mission to improve quality and efficiency across the industry,” Senior Living Properties CEO Cassie Mistretta said in a statement. “With LTC ACO’s assistance, we will be able to take their best practices and expertise, and apply it to our own organization. It is a win-win for both entities.”
The ACO model has been met with skepticism and outright hostility from some skilled nursing leaders who see the program as simply a government tool to reduce SNF stays, which generally cost Medicare more than home health services. One anonymous operator, speaking to SNN last year, went so far as to call ACOs a “disaster” for traditional institutional post-acute and long-term care providers.
But Genesis has countered that narrative by touting the ACO as a less-costly, less-intense alternative to an Institutional Special Needs Plan (I-SNP), a special type of Medicare Advantage plan that operators have increasingly seen as a way to take control in a changing payment landscape.
“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,” Genesis CEO George Hager told SNN last year.