Value-Based Insurance Model Helped SNFs During COVID-19 – Albeit Indirectly

While participation in value-based payment models has been historically low among skilled nursing facilities, the industry indirectly benefited from the payment models during the pandemic, according to a study conducted by Duke University’s Margolis Center for Health Policy in May.

The John A. Hartford Foundation in New York presented key themes from the report at the end of the month.

SNFs with existing VBP relationships were better able to obtain needed resources and assistance at the height of the pandemic, the study found. Specifically, connections stemming from the VBP model helped SNFs with prevention measures, testing and treatment of virus symptoms.

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“Because VBP models partially or fully decouple payment from service volume, health care delivery organizations were financially protected when services plunged during the early pandemic,” Duke researchers said. “Many health care delivery organizations were able to re-deploy capabilities they had built to succeed under value-based payment, such as having care coordinators help with contact tracing or using telehealth or in-home care during stay-at-home orders.”

That’s across the continuum of care, researchers were quick to point out.

“VBP models showed promise in helping SNFs during the pandemic by encouraging partnerships, but the models were generally not able to help with financial resilience,” the Duke study said.

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This payment model needs to be better fitted to the “unique circumstances” of skilled nursing facilities to get more operators and owners to sign up, the study noted, citing staffing and financing challenges, ownership structures and resident needs.

“Current VBP models tend to focus on short-stay, skilled nursing care and outcomes such as reducing hospital readmissions, while VBP models for long-stay, nursing home care are limited in number and scope, despite forecasts for a dramatic increase in the need for this type of care as the U.S. population ages,” the Duke study added.

SNF operators and owners might be less hesitant to adopt the VBP models if there were more options for long-term care residents. And, they’d be in a less “precarious financial state” if future payment models prepare facilities for crises similar to what was experienced last year, the study said.

“[The Center for Medicare and Medicaid Innovation] could encourage greater SNF participation in existing ACO or episode-based payment models by streamlining the SNF 3-day waiver process, which would encourage more VBP participants to form the partnerships that were helpful during the pandemic,” the researchers concluded.

The Direct Contracting model is another option to dip into VBP, which had a track available for Medicaid managed care. The study said CMS isn’t accepting new applications for this track in 2022, meaning they are taking time to see how it affects SNF care this year before offering it again.

Long-term care is covered by Medicaid, the study said, making up 51% of SNF payment distributions. Any Medicaid VBP design needs to account for “expressed concern about Medicaid rates for long-stay residents,” study authors said.

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