While declining relationships, payment and care delivery misalignment have come to define the nursing home sector’s overall experience with Medicare Advantage, successful strategies to manage managed care have come into focus.
Among those strategies, providers have found that taking a firmer stance in contract negotiations can yield results. Walking away from contracts has been cited as having the highest success, according to a survey conducted by LTC100. Of the 71 nursing home executives that participated in the survey, 35% said walking away from or terminating MA contracts provided leverage for better rates.
And this tougher attitude among providers may have contributed to a noteworthy development: a stagnation in MA growth. For the first time in 12 months, MA hasn’t grown, according to Edward Farbenblum, Chief Strategy Officer for New York operator VestraCare.
Shorter lengths of stay and “tremendously more” administrative burdens were two other defining characteristics associated with MA contracts, said Farbenblum.
Nursing home operators continue to see a misalignment between payments and delivery, or a gap between the level of care delivered and what’s paid out. About 67% of respondents reported worsening relationships over two years. About 30% of respondents reported payment alignment as average.
However, some of Medicare Advantage’s slowing growth may have to do with worsening public perception even as the Centers for Medicare and Medicaid Services (CMS) vows to deepen its support for the program.
“A lot of that [stagnation] is related to bad press that the MA plans have been getting in light of certain scandals that have happened over the last 24 months or so, and certain congressional investigations,” said Farbenblum. “On the flip side, CMS has expressed interest in making Medicare Advantage the default and fee-for-service the elected path, which would be devastating for our industry.”
Making Medicare Advantage Organizations (MAOs) listen
Farbenblum has had forward-thinking MA payers who listen when operators threaten to reduce their spend per beneficiary, although others have been known to “roll their eyes and lose their market power.”
Either way, it’s a hard decision to make, whether or not to play chicken with MA payers, he said. VestraCare has had success sending a termination letter to a mid-size payer in the past, but Farbenblum admits he wouldn’t have the fortitude to take on a bigger payer.
And nursing homes aren’t alone in their frustration with MA, said Denise Keefe, senior vice president of continuing health enterprise for health system Advocate Health. Advocate has seen the same struggles getting parity with MA.
“We’ve pulled out of Medicare Advantage in a large way. We have some risk plans, but less than we used to have,” said Keefe. “But if I look back at what one of our success stories has been, we have been building programs and services over the years to meet the needs of Medicare Advantage or ACO value-based contracts; we know where we’re still holding and sharing risk.”
While Advocate may be winding down some of its risk-based contracts, it has kept programs to reduce hospital admissions and provider overall better outcomes. And some payers recognize the effectiveness of these programs and want to continue working with Advocate. In other words, the programs developed to meet MA have changed conversations with payers and, in turn, their relationships.
VestraCare has had similar success with their hospital ER diversion program, which requires hospitals to buy into it; the program demonstrated value to payers and led to a modification of an MA contract based on the amount of savings.
Strength in numbers
Offensive strategies are more doable with a health system like Advocate on your side, added Tim Fields, CEO and Co-Founder of Ignite Medical Resorts – there’s more control because everyone is working toward the same goal, getting adequate payment from MAOs and reducing administrative burdens.
“When you get to the big guys – and I know two-thirds of Medicare Advantage in the country is United and Humana together – it’s a little different,” said Fields. “And for us operating in seven states, we’re not dealing with one United and one Humana, we’re dealing with five Humanas and six Uniteds, because every state’s different, and what matters to them is different, and what they’re looking at is different, and what their bosses are telling them is different.”
Ignite works with 50-60 different contracting agencies, presenting market-specific data to each one showing the different types of acuity Ignite can do, and how a payer might be able to redirect to Ignite from more expensive long-term care hospitals (LTCHs) and other higher level acuity settings.
Ignite’s “scorecards” show how they rank against market competitors, what length of stay is, rehospitalization rates and what clinical volume looks like.
“I think the key is just continuing to have those conversations. We have started a managed care newsletter that we’re sending out with outcomes and data. We’re continuing to get [the MAOs] out to our facilities and see it live in living color,” said Fields.
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