A lack of consistency in how the Centers for Medicare and Medicaid Services (CMS) reimburses programs serving special needs plan (SNP) populations is getting in the way of improving outcomes and reducing hospitalizations, according to providers, payers and consultants in the nursing home sector.

Today’s institutional beneficiary is usually eligible for models with similar clinical objectives but materially different reimbursement methodologies, Ben Lerer, CEO of institutional special needs plan (I-SNP) provider Longevity Health, told Skilled Nursing News. He believes the key here is to align incentives among payers, and on top of that match acuity and complexity among nursing home residents.

“The more we can align incentives across Medicare, Medicaid, primary care, post-acute care, and long-term services and supports, the more successful we will be in improving outcomes and reducing unnecessary hospitalizations,” said Lerer.

Instead of a single program, CMS should think about incentives designed to ensure everyone caring for the patient, no matter the care setting or payer, is working toward the same goals and are measured against the same quality, clinical and financial outcomes.

“At the same time, payment benchmarks and risk models must evolve to reflect the reality that post-acute and long-term care patients are substantially more complex today than they were when many of the underlying assumptions were established,” said Lerer.

SNPs are many times boiled down to one category, but there are distinct models, including I-SNPs, those that serve dual eligible (D-SNPs) and chronic (C-SNPs); sometimes beneficiaries qualify for more than one type of SNP.

Reimbursement to match acuity

Modernizing payment benchmarks and risk models would help ensure that reimbursement accurately reflects patient acuity, Lerer said, along with resources required to deliver high quality, coordinated care.

“Many components of today’s payment methodology are still anchored to data that predates COVID and the substantial changes we’ve seen in nursing home acuity,” said Lerer. “Residents today are generally sicker, frailer and more clinically complex than they were several years ago.”

There’s reimbursement opportunity to be gained for special needs plans too, depending on what CMS wants to do with integration, ATI Advisory Managing Director Rose Mollitor told SNN.

This is especially true when it comes to D-SNPs, and it’s one of the reasons advocates and policymakers have historically pushed for integration because of the “payment chassis question,” Mollitor said.

“What is being integrated? You can have an integrated plan where you are covering holistically the benefits from Medicare and Medicaid,” said Mollitor. “But payments are still coming from different places and different sources, or they may even be run through one claim system and then another claim system.”

That’s the real problem to be solved, Mollitor said, and it’s one that often pops up when plans are making decisions in who they can serve well and where they can operate.

The reality is, seniors with high needs don’t experience health care in silos, Lerer added. It’s common to see a nursing home resident receive Medicare-covered services, Medicaid services, pharmacy benefits and behavioral health services, along with community-based supports, during their time at a facility.

But all of these services are of course financed thorough different programs – and each of these programs has different incentives, Lerer said.

“The plans that succeed are the ones that create alignment across providers despite that fragmentation. They invest heavily in care coordination, interdisciplinary clinical teams, data sharing, and strong provider partnerships,” said Lerer. “But there is no question that fragmentation creates friction and administrative complexity that ultimately adds cost to the system.”

Lerer would like to see payment parity for comparable populations. Multiple programs today serve overlapping populations and yet are reimbursement differently. For SNP beneficiaries in particular, health needs change rapidly and require high-touch levels of care. These residents are best served by reimbursement models that reflect that complexity and intensity of care being delivered.

Reimbursement streamlining and gaps in pay

Bringing together the Medicare and Medicaid payment systems has been a longstanding challenge, echoed Mollitor. There are some states where there is a capitated payment through a plan, and the plan is reimbursing providers for both Medicare and Medicaid services.

The alternative is the plan reimbursing only for the Medicare portion, and then the provider having to work with the state for Medicaid reimbursement.

And there could be an element of private pay too, Mollitor said, when there are so many services involved, so many reimbursement sources; sometimes there’s a gap that Medicaid and Medicare can’t cover.

“If you’re talking about an individual who does live in a nursing facility, it’s that much more likely that there may be some component that’s private pay as well,” said Mollitor. That goes for duals, chronic SNP beneficiaries, and those that choose an I-SNP.

The plan that’s most protected from payer source headaches is the I-SNP, Mollitor said. As a MA plan, there’s no confusion of whether payments would come from Medicare or MA – it has to be either/or.

Looking ahead, Lerer expects CMS to continue focusing on risk adjustment accuracy, quality measurement and reducing incentives for coding variation across programs.

“I would not be surprised to see greater alignment across Medicare Advantage, SNPs, and accountable care models,” said Lerer.

But simplification shouldn’t mean treating every patient population the same, he added. Instead, different programs serving similar patients should be incentivized similarly, aligning with the same goals for delivering high-quality outcomes.