Medicare Advantage’s Steady Growth Has Nursing Home Operators Moving in ‘Radically Different Directions’

While so many nursing home trends have been altered by the pandemic, one has interestingly stayed in line with pre-pandemic statistics: Medicare Advantage’s (MA) growth trajectory.

MA is still expected to cover 52.9% of all Medicare beneficiaries by 2031, according to Fred Bentley, managing director at ATI Advisory. Bentley spoke about Medicare’s evolution and its emerging opportunities for senior care innovators at the 33rd annual National Association at the Support of Long Term Care (NASL) meeting in Nashville on Sunday, when the organization also announced that it is rebranding and will be known as Advion going forward.

Currently, the national average of MA beneficiaries is 46%; 31 states are north of 40%, Bentley said.

Operator reaction to the news has had ATI’s clients moving in “radically different directions” given the nursing home sector’s entrenchment in fee-for-service (FFS).

“They’re looking at what’s happening in Medicare and saying, ‘we’re going to exit this game, we don’t like where this is heading,’” he said. “There’s an equal number of organizations that are saying, ‘wow, this is exciting and this is a unique opportunity for us to not only double down on long-term care and our role in the healthcare system, but to really go big to expand our part of the delivery system.’”

Another trend Bentley sees in the space, as it relates to nursing homes, is an increasingly blurred line between insurance payers and providers; insurance plans are delegating all of the risk by acquiring different parts of the care continuum — from primary care groups to end-of-life care.

The same thing is happening on the provider end of the spectrum as well. Long-term care providers specifically will continue to create their own insurance plans for residents, like the institutional special needs plan (I-SNP).

“It’s a feeder into their business … they want to capture those lives, but they have to be very careful about how they do that,” he said.

Diverging paths

Operators are now left to choose what direction they want to head in, in terms of acuity and specialty — given where Medicare is headed. Bentley created a sliding scale of “health care less” facilities as part of his presentation, with continuing care retirement communities (CCRC) as an example and the “Kaiser [Permanente] of senior care” providers on the other end of the spectrum.

Bentley used Oregon-based Marquis Companies as an example of the “Kaiser model,” which has created its own ecosystem for its part of the care continuum, a “one-stop shop” for beneficiaries that need post-acute care.

“It has the payer piece, it has the ancillaries … there are a few long-term care organizations out there that aren’t quite as comprehensive as Kaiser, but they’re pretty close,” said Bentley.

As nursing home operators become more and more diverse in services offered, those in the middle consist of the “LTC-focused factory,” like Symphony Care which launched the “super SNF” model in 2015 and Ignite Medical Resorts, which focuses only on short-stay, Medicare patients.

Diversified providers are right in the middle, expanding into ancillary business including lab imaging, pharmacy and technology, along with primary care and home health.

Juniper Communities is an example of an “LTC payvider,” just below companies like Marquis in terms of service and business line breadth. They take diversification to a “whole other level,” Bentley added.

The New Jersey-based company does offer short-term and long-term skilled care, but they’re primarily known as a senior living provider.

“[Juniper] built their own primary care on site, pharmacy, imaging, co-located with their campuses, and then years ago they launched their own institutional speciality,” said Bentley. They’re one of the few long-term care organizations that said they wanted to move into the payer space.”