Skilled Nursing Operators Protest ‘Insane Amount’ of Administration Needed as Medicare Advantage Expands

As the federal government pushes to get more beneficiaries on managed care, nursing home providers say the administrative burden associated with such clients is “extraordinary.”

That’s according to Kim Majick, chief development officer at Carespring Health Care Management. A heavier administrative lift is set against a backdrop of dire staffing shortages, along with staffing minimum requirements.

So burdensome is this process that industry leaders say that they aren’t being compensated adequately for the extra complications – and costs – associated with administering Medicare Advantage (MA) plans at nursing homes.

Meanwhile, since MA plans aren’t going anywhere, nursing homes are figuring out how to alleviate the administrative burden while advocating for fast transfer of a patient to the correct care setting.

The cumbersome work all begins with the process for authorization itself, which requires layers of administrative work.

Compiling and submitting documentation, then waiting to hear back from a Medicare Advantage plan can sometimes take up to 72 hours, adding “a whole other layer of administrative responsibility,” Majick said.

Then, the appeal process to keep patients to remain in skilled nursing care can be incredibly subjective, adding another wrinkle, especially if nursing home clinicians need to convince an MA plan that the patient needs more recovery time.

Despite these extra steps entailed in seeking authorization and reauthorization, MA pays less than traditional Medicare, Majick said.

MA is expected to cover 52.9% of all Medicare beneficiaries by 2031, Fred Bentley, managing director at ATI Advisory, said in October.

Some states are already at over 50% penetration with MA, according to Susie Mix, CEO of California-based Mix Solutions, Managed Care & Contract Consulting.

Originally, MA was only supposed to make up no more than 34% of Medicare beneficiaries nationwide, she said. Mix Solutions helps SNFs negotiate contracts with MA plans to ensure reimbursement rates match levels of care, among other services.

To ease the burden from MA plans, nursing homes are contracting out case managers or hiring them in-house, Majick said, while investing in technology that can help the documentation process go more smoothly. Larger hospital systems, meanwhile, are looking to gain more control over the authorization process for transitions in care, she said.

FFS Medicare as a baseline, MA adds administrative ‘layers’

Traditional fee-for-service (FFS) Medicare is a clearer program for direct care workers, Majick said. What qualifies a FFS Medicare beneficiary for skilled care is left up to the clinicians caring for the patient – a point many leaders said was crucial when first determining the right placement for patients along the care continuum.

“When I get that referral from the hospital for a traditional Medicare [patient], if I’m the admissions counselor, I can crosswalk it to the Medicare manual, make sure they’ve had that three midnight stay, and make a decision on whether to admit or not,” said Majick.

For MA beneficiaries, nursing home staff must compile documentation showing a patient qualifies for skilled care and submit it to the MA plan. The insurance team reviews the information and staff need to wait until the team has made a determination. Then, nursing staff need to negotiate with the plan on what they’re going to reimburse for the stay.

Reimbursement depends on each plan and each particular contract, adding to the burden, Majick said.

“They’re all unique, or most of them are unique,” she said of MA plans – it’s more work and responsibility for less reimbursement than FFS Medicare.

“There isn’t a single plan that we work with that pays what Medicare pays,” said Majick. “We have increased responsibility, administrative burden for decreased dollars, which in any other business wouldn’t work, right?”

Mix said administrative burdens sometimes start even earlier, if there is confusion with benefit verification.

“A lot of the folks on the health plan side that we call, they don’t have accurate information. They might say Humana is the one who pays for the SNF when in reality it might be Blue Shield,” said Mix. “Once that’s cleared up, the patient steps into our facility and we have the obligation to get information over to the health plan within 24 hours.”

The initial authorization and renewal process for authorizations is cumbersome. It’s a mad dash to obtain patient history, list of medications and therapy notes and get it to a case manager – and it has to be done all over again sometimes after just three days.

“We usually get an authorization at that point that says, okay, the patient is good for three days, or five days,” said Mix. “Then we start the process all over again, we have to gather all of the information on the patient that documents any updates, doctor’s orders, and send them out to the health plan to get a renewed authorization.”

The “layers” of administrative burden extend to additional team members too, to help with added communication and documentation between the facility and MA plan, said Majick.

SNF operators must submit clinical updates through a special portal or to a case manager by secure email or fax every three to five days, Majick said. Clinicians must offer a “narrative” when the MA plan thinks it’s time for the patient to no longer be in the nursing home.

“When the insurance company no longer believes that they should be there, but the patient, the family, even at times our clinicians are in disagreement with that, then having to go through this appeal process,” said Majick, a process also seen in traditional Medicare but not as often.

Mix said it’s “extremely important” on the administrative side to understand Medicare Advantage plans look at different levels of care, and that the patient can change levels in the building. Different levels equate to different rates of reimbursement and more authorization requirements, she said.

The family is often caught in the middle, choosing to appeal the insurance company’s decision. This adds more layers, added Majick, both written and oral.

In order to meet this need for more written and oral patient advocacy, Carespring has had to employ a team of five case managers across its 16 facilities in Ohio and Kentucky, who work to get cases authorized and submit information to insurance companies.

“It’s really an insane amount of resources that we’ve added to assure that we’re advocating appropriately for the patient,” said Majick.

Other operators contract out with third parties like New York-based Absolute Authorizations, which provides HMO case management support – the team has contracts with different facilities, and handles communications with MA plans, sending over documentation and advocating for patient care.

“[Nursing home staff] have clinical responsibilities, they have patients that they have to care for … there’s a lot that’s going on,” said Brian Neumann, CEO of Absolute Authorizations. “So now to be getting phone calls from insurance companies, gathering documentation and sending to them, they don’t even have an opportunity to really advocate for patient care at a high level. Even just sending documentation becomes a whole job in itself.”

Once an MA beneficiary is approved for care and coming into the building, that process is “continuous,” he added. It’s a tremendous amount of responsibility because it’s all timely, and can sometimes be more nuanced if therapy regimen, prior level of function, diagnoses, comorbidities, medications, IVs and wounds are all considered.

Alleviating MA plan administrative burden

Technology, and third party companies that act as liaisons between the SNF and MA plan, have helped alleviate administrative burdens, saving nursing home staff precious time.

Software applications like those offered by MedaSync and other tech companies can help ensure patients are receiving the right payment for the right care, said Majick.

“It’s not going away. Make sure that either you have a very efficient best practice system in place, or you have software that really alleviates a lot of that administrative and staff burden,” noted Mix. “That’s the only chance we have to make sure that we’re maximizing our contract with managed care patients.”

Absolute’s staff consists of clinicians with a deep knowledge of the insurance world, noted Neumann. They’ve built relationships on both ends and can be proactive in making sure the insurance company knows ahead of time why nursing home staff, the family and patient feel an extended stay is needed.

“I think it’s pretty easy to understand why you’d be able to get that patient a longer stay approved just by being able to advocate, push back and know the guidelines,” said Neumann. “That’s the process that we continue to follow every time we communicate with the insurance company, that policy and procedure, and then through the appeal process as well.”

Companies like Absolute work to increase reimbursements and approved days for short-term stays among Medicare Advantage beneficiaries – one client saw approved days increase from 22.15 to 30.01 days.

Another saw reimbursements increase from 2.76% to 10.21% for a certain level of care.

Digging a bit deeper, Majick said CMS could up the percentage that Medicare Advantage plans must pay to the provider.

“Most state Medicaid plans don’t pay at the cost of care. You’re at a loss for over 50% of your patients. And then, if 50% of your skilled care population is Medicare Advantage, that doesn’t cover the costs – you can’t afford to hire more people, you won’t be able to afford to stay in business,” said Majick. “I see it as a real crisis of care. We all want quality. We all want to have the right number of team members taking care of the patients … but you have to have the resources to do that.”