As managed care plans continue to reshape the skilled nursing landscape, operators must navigate the complexities of managing patients under managed healthcare programs, including maintaining patient census levels, adapting to industry-specific policies, and addressing issues related to case managers’ involvement.
As Medicare Advantage continues to penetrate the nursing home market, leaders have said that MA plans are depressing margins amid higher costs to run operations. Some have expressed concerns that the challenges, brought about by managed healthcare plans and associated policies, can have a detrimental impact on care and suppress census.
Indeed, recent data confirms that managed care rates are bringing down margins in the space, with MA plans paying one-quarter to one-third less to SNFs than traditional Fee-for-Service (FFS) Medicare, according to statistics put out by the National Investment Center for Seniors Housing & Care.
Traditional Medicare amounts to nearly $600 per resident day in revenue, while managed Medicare is paying out only $468 per day, NIC data shows.
And the pain is deepening as the growth of fee-for-service (FFS) Medicare has stalled and contracted amid an acceleration in MA enrollment, according to Marc Zimmet, president of Zimmet Healthcare Services Group (ZHSG). In addition to reimbursing providers at lower rates than FFS, Medicare Advantage is associated with shorter length of stay (LOS) and more intensive administrative requirements, he said.
“It’s painful — it’s getting worse,” Zimmet said, referring to Medicare Advantage’s impact on nursing home providers.
‘Focusing on doing our job’
Moe Freedman, President and CEO of Accolade Healthcare, said the managed Medicare environment in Illinois – where Accolade operates – has created many challenges for the company.
“Whether or not you’re part of a hospital network or have incredibly good quality measures, they’re very focused on the overall star rating as an end-all, be-all, no matter if your [hospital] readmission rates are under 15%,” Freedman told Skilled Nursing News.
The leading managed care provider in Illinois is Health Alliance, which, Freedman said, has the lowest rates of any managed Medicare program in the country. This leads to nursing home operators having to find a way to grow their census without the largest provider of managed Medicare in the area.
SNN reached out to Health Alliance, but hadn’t received a response at the time of publication.
One way to grow census is through prolonging the length of stay and accepting higher acuity patients.
“It’s going to be a challenge for the hospital,” Freedman said. “You know, they’re not necessarily happy with us because they understand that it’s always gonna raise the length of stay, but they understand that we need to be able to cash flow in a way to pay our bills. We try to say yes to everything when it comes to acuity.”
As a result of this strategy, Health Alliance has been able to increase the census at its facilities.
Many of the residents’ quality of care has been so low in this region, Freedman said, and for so long that a lot of residents have been pushed into going to facilities outside of the Champaign County area.
“So, it’s really just focusing on doing our job, giving great care. And, you know, if you do that, you’ll be successful when it comes to the census, especially in an area where it’s not oversaturated,” he said.
And yet, despite the strategies shared by Freedman, the increasing penetration of managed care plans presents challenges to growing a facility’s census.
Malerie Orosowy, a regional skilled nursing administrator at Accolade, said that managed plans are becoming increasingly prevalent, replacing traditional Medicare and Medicaid options. While she acknowledged these managed plans aim to provide cost-effective and efficient care for patients, she said they come with their own set of challenges for facilities.
Orosowy said one of her primary challenges as an administrator is the difficulty in maintaining high patient census levels. She noted that gaining and sustaining a healthy patient population is an ongoing struggle. This issue affects not only facility operators but also administrators who grapple with this challenge on a daily basis.
However, Orosowy pointed out that the difficulties faced by skilled nursing administrators don’t stop there. She shared her concern about the growing complexity of managing patients under managed healthcare plans.
“Nowadays, as we see these managed plans’ participation within our own communities growing, it just seems like those barriers that I feel have always been in place for operators, administrators, or whomever it may be, those barriers are now like a brick wall,” she said.
Orosowy, who said she has worked in long-term care for most of her life, said that barriers that have always existed in the industry seem to have become even more formidable.
One particular issue that Orosowy discussed is the handling of adverse events by case managers associated with managed plans. These case managers, she explained, often arrive at skilled nursing facilities with little notice and limited familiarity with the residents they oversee. They are tasked with reporting any adverse events to state authorities, such as falls or injuries, even if these incidents have already been investigated by relevant agencies.
“That is disappointing because it’s coming from within the industry. It almost feels as though those brick walls are in place because of these managed plans and this new policy that they are enforcing, which I believe to be pretty heavy because I’ve now heard it in a couple of different regions,” she said.
Orosowy’s overarching concern is that these challenges, brought about by managed healthcare plans and associated policies, can have a detrimental impact on residents, with unnecessary reporting and investigations diverting resources away from patient care.
“They don’t know these residents that they’re coming to see,” she said. “They’re not the ones caring for them day in and day out, like we are, and they’re coming in and reporting – as they’ve been advised to report any adverse events that a resident on their caseload experiences during a nursing home stay – to the state authorities.”
Solutions to the problem
The American Health Care Association (AHCA) said there are a couple things providers can do to best benefit their residents and support themselves financially.
Provider-led institutional special needs plans (I-SNPs) are one way through which providers can improve financial gains by integrating primary care and long term services as well as making investments in technology and care management to improve outcomes, AHCA told SNN in an email.
This is a great policy that leads to more positive health outcomes and reduces hospitalizations, AHCA said.
“Nursing homes continue to struggle with Medicare Advantage plans that do not cover the cost of care. As a result, AHCA is working to promote additional opportunities, such as I-SNPs and ACOs, that focuses on our distinct patient population and provides residents with enhanced primary care models and benefit flexibility,” the statement read.
Companies featured in this article:
Accolade Healthcare, American Health Care Association, CMS, The American Health Care Association
