Medicare Advantage plans, as well as the recent addition of plans offered by nursing home companies, are becoming an increasingly popular alternative to fee-for-service Medicare coverage.
“The traditional model is making decisions based on paper, and in our model, these decisions are being made by clinicians who are really talking to the staff and seeing the patient,” said Angie Tolbert, a vice president of quality at PruittHealth, which began offering its plan to residents in 10 of its nursing homes in Georgia last year. “It’s a big shift in mindset.”
UnitedHealth, a popular health insurance provider, currently offers the majority of Medicare Advantage healthcare plans available. With approximately 40,000 enrollees, it is significant that for a majority of their plans, UnitedHealth’s rating on Medicare’s five-star quality scale is at least four stars.
Matthew Burns, a UnitedHealth spokesman, said “Our plans offer members quality and peace of mind – and they are considered above average to excellent by CMS quality and performance standards.”
What Is Medicare Advantage (MA)?
Eligible individuals in the senior population can enroll in a Medicare Advantage Plan in addition to, or instead of, Medicare’s part A, B, and D plans.
Medicare Advantage Plans often provide coverage for services like vision, hearing, dental, and prescription drugs (part D). These services are in addition to inpatient hospital, skilled nursing facility, outpatient for medically necessary, and preventative services that Medicare part A and B coverage include.
Medicare Advantage/Facts and Figures
- Facility owned MA policies usually place a nurse in the skilled nursing facility or retirement village. There, the nurse can access staff and assess patients’ conditions. Some will provide primary care to residents within the homes or in affiliated facilities, with the goal of reducing hospitalization.
- Nearly 18 million patients are enrolled in the overall Medicare Advantage market.
- Medicare pays private insurers a set amount to care for each beneficiary. This payment method is designed to provide the insurers with motivation to reduce the risk of patients requiring high-cost medical services such as hospitalizations.
- A subgroup of MA plans are designed exclusively for people who either require or are expected to require at least 90 days of skilled services from nursing homes, assisted living facilities or other long-term care institutions.
Medicare Advantage Plan Types:
Unlike the generally static plan structures of Medicare coverage, MA plans are of different varieties.
- HMO – This coordinated care plan mostly provides coverage for In Network providers. A PCP is selected to coordinate health needs.
- PPO – This plan includes good benefits within a provider network. Unlike HMO plans, a PPO plan also includes flexibility for out of network coverage.
- PFFS – Available with and without provider networks, this plan is similar to the PPO plan, yet allows members to be seen by the majority of US providers accepting the plan’s payment terms and conditions.
- SNP – These are plans designed for people with special health care or financial needs.
Also, in contrast to Medicare plans, individuals are not automatically enrolled in MA (Medicare advantage) plans. Rather, enrollment takes place at specific points in the year only.
Medicare Advantage/Let’s Talk Payment
As mentioned, many MA plans provide coverage for additional services not covered by Medicare (with the exclusion of hospice care). These include, but are not limited to, dental, vision, hearing, and, in some cases, medical transportation and non-skilled nursing home care. Practically, this means that under a Medicare Advantage plan, patients requiring assistance with daily living – not included in acute or skilled nursing care – may receive full coverage for all services during their stay at an LTC facility.
Down To The Dollars
Based on the above, it would seem that facilities receive flat payment-for-services-rendered, as with the Medicare payment model, for MA residents.
Unlike traditional Medicare plans, facility administration must contract with each MA insurance plan provider to accept patients and residents with said coverage.
- Some providers pay Medicare comparable rates, while others negotiate cheaper rates in exchange for access to more of their client stream.
- I-SNP (Institutional Special Needs Plans) target the LTC patients, and are usually issued by an institution, provider or network of providers. The issuers pay SNF facilities a Monthly Capitation Payment (A portion of what they are paid by CMS for administering the plan) in exchange for sharing the risk of rehospitalization (if a resident is hospitalized, the facility does not get paid for their skilled care).
- As mentioned above, in such a shared-risk structure the facility (which may be part of the policy-issuing network) will have processes – such as an on-site medical team – in place to avoid re-hospitalization and hopefully increase insurance reimbursement.
- A non-Insurance alternative to this is an ACO. An Accountable Care Organization agrees to work together to provide better care, and in exchange Medicare shares additional dollars with them, or recoups some of the higher payments as the case may be.
- Both ISNP and ACOs are part of the Value Based Purchasing trend, with the CMS moving toward benchmarking payments to the results received. The difference between the two is that ACO plans are not insurance products. Therefore, the risks are limited to the payments received for provider services, while an ISNP is on the line for all services the resident/patient may require.
MA Changes & Opportunity
As Medicare Advantage plans bring unprecedented changes to the LTC and SNF payment model arena, exploring the potential they offer is important.
Institutions across the globe have already partnered with insurance carriers and provider networks to offer ISNP plans to residents. Such a setup requires careful research and planning, as well as significant investment capital.
Many great resources on the topic are available on the CMS website.
As the healthcare industry continues moving toward result-driven payment models, staying current will ensure your facility maximizes the current potential for growth.