As skilled nursing operators look for ways to build back hospital referrals, data shows that Medicare Advantage enrollment continues to climb, making some managed care experts wonder how smaller, traditional, single nursing home operators will be able to build a sustainable future.
With Medicare Advantage enrollment now representing 46% of all 57.7 million eligible Medicare beneficiaries, according to the Medicare Payment Advisory Commission’s (MedPAC) latest report, nursing home operators are still looking for ways to position themselves for a bigger piece of the pie.
To justify their role as part of the overall health care system, SNFs will need to find ways to meet the changing needs of referral partners.
“If you’re a provider, and you don’t have contracts, and you’re not part of the post-acute network, in an urban area, you have an uphill climb in front of you,” Management and Network Services (MNS) COO Jonathan Hoffman told Skilled Nursing News. “Because everybody else that’s in your network, and has those contracts, has made themselves attractive for those Medicare Advantage patients.”
Medicare Advantage enrollment has grown steadily since 2003, increasing nearly sixfold, and has grown particularly rapidly in the last three years, the MedPAC report shows. The Medicare program paid MA plans about $317 billion in 2020 to cover Part A and Part B services for its enrollees.
“If you’re an urban, family-owned small building, your survival is going to be promulgated on the fact that you’re offering the service that is very, very specialized, and you’re focused on it,” Hoffman added.
Emily Vandermause, senior consulting actuary with actuarial firm Milliman, also felt that brand recognition will be key in building Medicare Advantage plans.
“Some of the hurdles that we see with new Medicare Advantage startups is just having kind of that brand recognition,” she explained. “When you start a new Medicare Advantage organization, in order to really attract members, you not only need to be offering more competitive benefits than those around you, but you also need to have that brand recognition or that name recognition, in order to get members to switch plans.”
Between 2013 and 2019, MA enrollment rose from 14.8 million in 2013 to 24.2 million in 2019, for a growth of 60%, according to a report prepared by Milliman last October.
“A lot of the way that these health plans can leverage and get more competitive discounts and rebates for their plans to help lower costs would be to grow their membership and have some leverage there,” she added. “Some of the larger, more national players would have a competitive advantage there compared to a facility who’s just starting to look to get into this.”
More choice than ever before
The number of plans from which beneficiaries may choose in 2021 is higher than at any time during the years examined, according to the MedPAC report.
Beneficiaries can choose from an average of 32 plans operating in their counties in 2021.
The amount of choice available in today’s market can be overwhelming for some operators to manage, Hoffman explained.
“MA is becoming a bigger and bigger piece of the pie … and that brings a lot of new considerations for operators,” Tyler Overstreet Cromer, principal at consulting firm ATI Advisory, told SNN.
She said that the most common way that she sees SNF operators position themselves better for MA patients is by opening their own institutional special needs plan (I-SNP).
As of January 2021, the average national daily managed Medicare rate for SNFs came in at $458 per patient, according to an analysis from the National Investment Center for Seniors Housing & Care, as compared to $552 for regular Medicare.
“[I-SNPs] are a way that (SNF operators) can move up the food chain,” Cromer added. “Operators are taking a leadership role and there are opportunities for better care.”
Though I-SNP enrollment for SNFs dipped during the pandemic compared to previous years, with 87,000 enrollees in 2021 compared to 104,000 in 2020, Cromer expects those numbers will bounce back after COVID.
“I do think I-SNPs are at the top of the list because they provide the best platform and greatest amount of flexibility and upfront funding,” she said.
I-SNPs are just one example of the new choices available to MA enrollees in 2021.
“If you’re, for example, Maricopa County, Arizona, there are 88 Medicare Advantage plans operating out there. So imagine trying to build 88 different ways if you’re in their network,” Hoffman explained. “You have to develop a strategy to work with managed care payers, whether you’re small or large, and it’s going to be much more difficult to be in that playground if you’re a small one.”
Companies featured in this article:
ATI Advisory, Management and Network Services, Medicare Payment Advisory Commission, Milliman
