Optum is scaling back its Medicare Advantage Special Needs Plans for nursing home and assisted living residents in several regions.

The health care services arm of insurance giant UnitedHealth Group (NYSE: UHG), Optum, made headlines earlier this year for workforce cuts. Now, the company is shutting down Institutional Special Needs Plans (I-SNPs) in several states, multiple sources told Skilled Nursing News.

SNN reached out to Optum for comment, but hadn’t received a response at the time of publication.

Nursing home operators have confirmed to SNN that they are no longer partnering with Optum on I-SNPs in certain states. For example, The Evangelical Lutheran Good Samaritan Society’s partnerships with Optum are no longer in existence in two states.

A spokesperson for Sanford Health, whose affiliates include the Good Samaritan Society, told Skilled Nursing News that the large nonprofit nursing home provider has a number of locations in Minnesota and Iowa in which it used Optum for its I-SNP services. While Optum is no longer the partner, there will be no disruptions of health care services to its residents in the aftermath of Optum’s exit, the spokesperson said.

“In these locations, we will continue offering I-SNP services using providers we already have partnerships with. There will be no loss of services,” the spokesperson said.

Optum provides technology services, pharmacy care services, including a pharmacy benefit manager, and various direct healthcare services. The company also has been the dominant player in providing care delivery and coordination for I-SNPs, which are MA plans tailored to the needs of nursing home residents. According to the company’s website, Optum serves more than 1,800 SNFs and – as of 2019 – more than 70,000 plan members nationwide.

Meanwhile, a leader with one of Optum’s competitors in Iowa – American Health Plans – told SNN that the company has deepened partnerships with providers in certain markets, including Iowa.

American Health Plans offers provider-owned I-SNPs, and Chief Development Officer Hank Watson argued that provider ownership offers a measure of control that is lacking in I-SNPs owned by large insurance companies.

“You’re going to have other factors that decide how you enter the market and whether you stay in the market,” he said. “Nursing homes have long been subject to the shifting winds of the large insurers.”

Other competitors, such as Longevity Health Plan, are also growing amid Optum’s exit from certain markets.

“Longevity Health is proud to be serving over 10,000 members across 15 states and expects continued growth throughout 2025,” Dr. Rene Lerer, CEO of Longevity, said in an emailed statement. “Our highly differentiated value-based partnership model has consistently demonstrated superior clinical outcomes enabling us to continue our rapid expansion with both new and existing SNF partners, while also positioning us as an employer of choice for clinicians dedicated to serving long-term care residents.”

Multiple sources told SNN that Optum has closed operations in several states in addition to Iowa and Minnesota.

Overall, enrollment in I-SNPs has been steadily climbing, according to a KFF analysis of Centers for Medicare & Medicaid Services (CMS) data.

However, I-SNPs still make up only about 2% of Special Needs Plans, while 88% of SNP enrollees are in D-SNPs, which are plans designed for people dually eligible for Medicare and Medicaid.

Within the nursing home sector, a large provider-owned I-SNP is taking shape in Indiana and is set to go live in January 2025.