Mounting financial pressures among both Medicaid and Medicare payers, fragmented health care settings, and the growing use of value-based care as a cost-cutting measure are creating unique challenges and opportunities for nursing homes serving dual-eligible beneficiaries.
Maintaining and evolving such plans will depend on how adept nursing homes are at providing strong data to demonstrate quality and value, while also growing relationships with state officials and managed care organizations (MCOs) responsible for crafting future payment arrangements.
As for Medicaid cuts, Scott Leitz, vice president of health care programs, National Opinion Research Center (NORC) at the University of Chicago and former Medicaid director for Minnesota, who spoke at the recent PAYER conference in Chicago co-hosted by Skilled Nursing News and Home Health Care News, said operators should be “appropriately concerned but not alarmed.”
While states greatly value operators that serve dual eligibles, considering the wide range of essential services that support positive outcomes for this population, the constant fiscal constraints of Medicaid programs can’t be ignored, he said.
States usually have three main options to control costs: reducing benefits, lowering provider payment rates or restricting eligibility and enrollment; rate reduction is the most common, Leitz said.
A fourth way that is popping up more and more, as states increase their focus on value-based payment models, is one that rewards improved outcomes while reducing unnecessary spending, Leitz said.
Allison Rizer, chief growth and innovation officer for ATI Advisory, agreed with this fourth approach aimed at saving money – she expects states to place more financial pressure on managed care organizations, which could then pass it on to providers through new requirements and tighter reimbursement.
But designing such models for dual eligible beneficiaries and adhering to them when funds are tight comes with its own challenges. Effective coordination for dual eligible populations remains an unsolved challenge, according to Rich Keller, CEO of home care and home health services provider PurposeCare.
Dual programs struggle in a fragmented health system
The siloed health care system isn’t helping dual eligible beneficiaries either, Leitz said. In fact, he sees healthcare setting fragmentation as the greatest challenge to improving dual eligible care.
This lack of coordination between Medicare and Medicaid is seen in how Medicaid and Medicare providers demonstrate value, Leitz explained. If a Medicaid provider is successful in ensuring high patient satisfaction, providing reliable services, meeting quality standards and identifying health issues before they get worse, the financial benefits of these interventions accrue on the Medicare side.
Preventing hospitalizations and other acute care episodes reduces Medicare spending, and so it’s difficult for Medicaid-focused providers to be recognized or rewarded for savings they generate, Leitz said.
Providers’ biggest challenge is convincing MA and other integrated health plans to acknowledge and invest in the Medicaid side of dual services. Newer integrated care models might help with this disconnect, but strong evidence backed by data is most likely to strengthen the case for more dual-based payment arrangements.
“There’s a lot of noise, right? You can’t just flood [the health plans] with every single thing that happens. You need some way of not just gathering data, but interpreting the data, filtering it, and prioritizing where the real opportunities are,” said Leitz told Skilled Nursing News. “That’s not in everybody’s wheelhouse.”
All sources run low
Financial pressures extend beyond Medicaid to include Medicare Advantage and other Medicare health plans too, Rizer said, meaning that both major payers for dual eligibles are tightening budgets at the same time.
“All of this belt tightening is going to have to trickle down in some way, and so it just changes the value story a lot for the provider community,” added Rizer.
Operators serving this population will need to strengthen their value proposition and demonstrate quality and service effectiveness as the funding environment dries up for all sources.
Managed Medicaid contracts notably are established by state agencies, Leitz said, and engaging directly with state Medicaid programs and not just the health plans can shape contract provisions and improve opportunities for collaboration and care delivery sorely needed in dual eligible programs.
Building stronger relationships with local state Medicaid agencies gives providers greater influence over future program priorities and payment structures, Leitz said. That includes future managed care program opportunities for dual eligible beneficiaries.
“MCOs that operate in the Medicaid space, they operate under state contracts; they’re not independent actors in this. It may feel that way sometimes, but it’s not actually the way it is,” said Leitz. “Get to know your state Medicaid programs. They’re the ones who value input, and then that’s going to come through in some of the discussions that they have with their MCOs during contract negotiations.”
Sources of misalignment and getting on the same page
Misalignments between providers and health plans when it comes to serving dual eligible beneficiaries comes down to financial incentives, Rizer said. The health plan is trying to send the patient to the least expensive care setting that is also medically appropriate, but that may not be the case on the provider’s side.
“The facility that runs that provider-led I-SNP will say the I-SNP is the best product. The health plan may say the D-SNP is the best product…misaligning financial incentives are really driving a lot of this,” said Rizer.
Keller added that operators helping health plans achieve state priorities and demonstrate strong performance, especially for managed Medicaid, is a welcome step from the health plans’ perspective. Health plans also appreciate a steady stream of data showing how providers improve quality, efficiency and financial stewardship.
Recognizing that the current environment places less emphasis on offering extra benefits and more emphasis on demonstrating responsible use of public funds will take operators far, Keller said.
The “stickiness” of a dual eligible plan can help with operator-health plan alignment too, Keller said. Health plans lose revenue when members disenroll, and maintaining dual coverage can be as simple as ensuring administrative paperwork is completed by state or federal deadlines.
Companies featured in this article:
ATI Advisory, NORC at the University of Chicago, PurposeCare
