Inside the I-SNP Journey: Nursing Home Operators Unlock Promise of Medicare Advantage with 3 Different Models  

As nursing home organizations adjust to a changing environment of reimbursement, Medicare Advantage Institutional Special Needs Plans (I-SNPs) are undergoing rapid growth, with operators pursuing distinct strategies meant to realize financial and operational gains.

The benefits of an I-SNP can range from more control over quality, happier clinical staff, reduced administrative burdens, improved compensation and census, among other gains, according to nursing home executives who spoke Monday at the annual conference of the American Health Care Association/National Center for Assisted Living (AHCA/NCAL), being held in Denver.

Models based on partnerships

The first I-SNP participation model requires a nursing home organization to become an insurance company as well. The second requires partnerships of different degrees with an insurance provider, which will take care of administrative aspects, sharing in the financial risk but also the profits with the nursing home. And the third model calls for alignment with a large insurance provider such as UnitedHealthcare, which will own the plan and realize most or all of the financial gains and losses, but can offer benefits to nursing home partners, including on-site care that can help drive and sustain census.

A pioneer in the space, Tom Coble, president and CEO of Oklahoma-based Elmbrook Management Company, stressed that nursing organizations seeking to establish an I-SNP arrangement need to be patient in reaping rewards.

“Commit 110% and take the long-term view … It’s not easy. It’s not going to happen overnight,” Coble said about establishing an I-SNP arrangement.

Relationships and trust between medical staff and residents takes time to develop, he said, but at some point, “It’ll really start to impact and improve the quality of care … With every interaction in [an I-SNP], the families will become very, very engaged and thankful.”

Meanwhile, Leslie Campbell, COO of Touchstone Communities, whose company will be launching an I-SNP in partnership with Longevity Health Plan, said an I-SNP’s presence empowers nursing homes and allows organizations to gain more control over their affairs in both quality and profitability.

Touchstone’s I-SNP plans have been a long time in the making, with the Covid pandemic stalling them. When Touchstone resumed its path in 2022, the company thoroughly evaluated the available options and partners and structures, Campbell said.

“And February of 2023, after an exhaustive search and research, we selected the structure that we thought was best for our organization and our partners,” Campbell said.

Touchstone’s model required choosing a partner, and Longevity now does the administrative and back office work. And, Touchstone has been given full transparency around the premium and with line item expenses, Campbell said.

The final step for Touchstone in its transition was to educate the staff at the facility level on what the change meant to them, which required thinking more broadly about the role of the nursing home within the health care ecosystem — including in how to streamline care to achieve cost savings while improving the patient experience. 

“Along with the [education] was developing that foundation for care that looked a little bit different in that mindset of corporate responsibility,” she said. “[We were] thinking about the needs of the sector, the needs of our business, the needs of health care, and how we could contribute to that. Adding an I-SNP led to removing redundancies. This is a paradigm shift for caregivers in our space.”

The level of involvement from an external I-SNP partner can vary. Colorado-based Shalom Park partners with Optum, which provides enhanced technology, pharmacy care services and various direct health care services. Shalom Park has up to 40% of its residents in an I-SNP plan associated with Optum, according to administrator Mindy Moskowitz.

“The benefits in our partnership is that our members receive an extra layer of care and some perks. The skilled benefits can be initiated without a three-night hospital stay … And in the past, our community has received financial incentives and then usually quarterly and annual bonuses for quality of care, ” Moskowitz explained.

Since July 2023, Optum – the health care services subsidiary of UnitedHealth Group – has partnered with Shalom Park through a capitation program. This is a payment arrangement for health care services in which a medical entity receives a risk-adjusted amount of money for each patient or resident regardless of services rendered, opening up more opportunity for financial upside but also more risk of downside based on how well the provider manages care at that capitated rate.

“It’s an opportunity for increased revenue. But don’t forget that it’s a better level of care that we already have because of the Optum providers,” Moskowitz explained.

Owning an I-SNP

As for the third model, deemed riskier with greater rewards, and which also requires more capital investment upfront and works better if an organization has several regional facilities, is one in which the nursing home organization owns its I-SNPs. The motivation to own an I-SNP for Oregon-based Marquis Companies came from the desire to engage physicians better, said Steve Fogg, CFO of Marquis. Marquis runs AgeRight Advantage, a Medicare Advantage Plan locally co-owned with Avamere Family of Companies.

“Before we even got into the decision to do an I-SNP, which was almost 10 years ago … We needed to do something to improve our physician services, to improve the experience for our residents, to improve the quality outcomes, [and] to give our best shot at value-based payment arrangements,” he said.

The ownership of the I-SNP gave Marquis more control over care and greater ability to personalize care, the benefits of which were seen in the engagement of both residents and clinical teams.

“In addition to the physician services, we liked the idea of being responsible for the health care that allows us to make decisions on how we spend that money versus a third-party insurance carrier that may have a different philosophy,” Fogg said.

And the result was better care outcomes.

“Out in the Pacific Northwest, our experience ended up being pretty good [with an I-SNP],” Fogg said. “We didn’t see tangible hospitalizations take place. We saw that our families fell in love with … our NPs in our buildings. They became the most important person in the building and gave the families that much more confidence that our buildings and our operations were taking care of their loved ones.”

Marquis’ AgeRight Care Management Solutions oversees its I-SNP plans and its internal clinical services. And while this model of owning an I-SNP required Marquis to contribute $4 million on the front end to establish, the effort has been worth it, said Fogg. The quality of clinical care has improved while clinical staff, including doctors, are happier.

“We employ physicians and [physician assistants] through this model, and there are PAs in Marquis-owned buildings every single day,” Fogg said.

Regardless of the model, I-SNP plans are gaining traction because the I-SNPs empower nursing homes, reduce risk and improve the quality of care, leaders said.

“And as a therapist this what really excites me, is to finally be in a position to leverage the skills of therapists early … before there’s an adverse event,” said Campbell. “We want to be at the forefront of creating solutions for this health care crisis.”