A growing number of skilled nursing providers are adopting a regional “pod cluster” model  championed by nursing home giants such as Ensign Group (Nasdaq: ENSG), National HealthCare Corp., and PACS Group (NYSE: PACS), to gain operational efficiencies, foster collaboration, and drive better clinical and financial outcomes. 

And now, Genesis too is eyeing the pod cluster market model, according to executives, who sat down on with Skilled Nursing News at the LTC 100 conference taking place this week in Florida.

In this model, clusters of four to five nursing facilities that are located within close proximity – typically under an hour’s drive – are grouped into a pod. Each pod is led by a clinical and operational leader, usually the administrator and director of nursing (DON) from one of the facilities.

Nursing home administrators and DONs receive variable compensation not only based on their own facility’s performance but also that of the entire pod. This structure promotes cross-facility cooperation – encouraging leaders to lend staff, share key resources such as minimum data set (MDS) nurses, and help cover operational gaps.

What sets the pod cluster model apart from models with simpler regional facility cohorting is its decentralization of certain operations and risk-sharing between facilities, along with greater incentives and rewards for teams at high-performing facilities.

And while each facility within the cluster maintains autonomy, the pod cluster model enables easier deployment of staffing efficiencies, reimbursement solutions or clinical assessments, across the sister facilities in each cluster.  

The model – especially for Ensign – has proven to be successful on many fronts, allowing a better way to share expertise in an era where nursing homes face constant workforce threats, regulatory burdens, and reimbursement challenges.

‘First step’ for Genesis in path to possible pod cluster

Genesis hasn’t moved to risk sharing between cluster facilities yet, but is definitely eyeing it for the future.

For now, all Genesis facilities and its leaders have the potential to earn monetary incentives based on each center’s clinical and financial performance, said COO Lauren Murray-O’Donnell, who is considering such future models, including the possibility of organizing in smaller clusters that go beyond exchanging clinical expertise.

“We may get to the point where we organize clusters,” Murray-O’Donnell told SNN. “We’re still looking at performance individually based on each [facility’s] ability to successfully run their operation.”

Eventually, a group of centers in a given market and their performance could be tied together, she said.

“We’re not there yet. That is something that we will continue to evolve to as we bring people together, harnessing each other’s expertise,” she said.

Towards the path to risk sharing, Genesis launched a program in which facilities are given the designation of being a “Center of Clinical Excellence” when they meet certain criteria.

“I think our first step [to risk-sharing] is the Center of Clinical Excellence [program],” Brian Plasky, chief clinical integration and reimbursement officer at Genesis, told SNN. “It offers a foundation for [facilities], where it’s not only a training opportunity, but then that would lead to, if we choose to go to that next step, a cluster facility concept.”

To be sure, the organization aims to meet its own quality standards before changing up things.

For quality goals, eventually the plan is for 75% of Genesis facilities to receive certifications in 2025 from the American Heart Association (AHA), while also continuing to support administrators and DONs in obtaining their certification for Quality Assurance and Performance Improvement (QAPI) through the American Association of Post-Acute Care Nursing (AAPACN). Currently, 50% have received QAPI certification.

Pennsylvania-based Genesis operates nearly 200 skilled nursing centers and senior living communities across 17 states.

Ensign pod-cluster model in action

As for Ensign, one of the earliest implementers of the pod cluster model with risk sharing, executives have touted the model’s successes that go beyond just clinical care – it has improved reimbursement and enabled the company to grow its footprint in a more careful and disciplined manner.

“When we go into a new state, we typically look to start with one or two buildings so we can establish a solid launching point for more growth. This has played out time and time again, with our most recent example being Tennessee,” Chad Keetch, Ensign’s chief investment officer said during the company’s first quarter earnings call. “[These] footholds eventually lead to growth into multiple clusters which will eventually comprise a sizable market.”

In this way, adding that growth in established geographies is prioritized, Keetch explained.

“It allows our clusters to provide a comprehensive solution to the health care needs in those markets, while we continue to evaluate new states that fit our criteria,” Keetch said. “This not only allows us to deepen our commitment to those markets, but because our transitions don’t rely on a centralized acquisition team, our growth is not limited by typical corporate bottlenecks. Instead, we look to the local cluster partners to implement the transition plans.”

Ensign has maintained a steady pace of growth, retaining the ability to grow in many markets.

“We still see significant opportunity to continue to add meaningful density in the markets we know best and are making progress on several additions that we expect to close in the next few months,” Keetch said.