Amid huge structural changes in the healthcare system, population health management is quickly emerging as a way for skilled nursing and assisted living providers to improve the healthcare outcomes of residents and reduce costs.
“Population health management is an exciting trend,” said Mark Parkinson, president and CEO at the American Health Care Association and National Center for Assisted Living (AHCA/NCAL), Washington, D.C., a group that represents long term and post-acute care providers. “Every major provider is developing a strategy around it.”
In order to help providers develop effective strategies, AHCA/NCAL will hold a population health management summit December 9-10 in Washington, D.C. Designed for long term and post-acute care leaders, the Summit will provide a gathering to discuss different population health management models, network with peers, and gain a deeper understanding of the role of the Centers for Medicare & Medicaid Services (CMS).
Population health management is being driven by two major trends that have impacted the assisted living and skilled nursing sector in both negative and positive ways, noted Parkinson. The first trend is the recognition that healthcare outcomes are more important than procedures. Providers should be paid based on value and outcomes rather than the volume of procedures that are performed—a plus for the healthcare system and the patient.
The other trend is the growth of Medicare managed care, or Medicare Advantage insurance plans. About 34% of Medicare eligible adults are now in Medicare Advantage plans, a number expected to continue to grow. This has had a negative impact on skilled nursing providers because payments under Medicare Advantage are less than those under the fee-for-service system. According to the NIC Skilled Nursing Data Initiative, revenue per patient day under Medicare Advantage has fallen from $510 in January 2012 to $432 in June 2019.
Population health management has emerged as a solution, noted Parkinson. Skilled nursing and assisted living providers can become managed care companies and apply to be a Medicare Advantage institutional needs plan, or I-SNP. This is a plan which includes residents who reside, or are expected to reside, in a long term care facility for at least 90 days, or require a nursing facility level of care but reside in assisted living or in their own homes.
But becoming an insurance company is a daunting task, admitted Parkinson. In part, it means taking on the full financial risk of residents’ Part A, Part B, and Part D Medicare benefits and creating a healthcare provider network.
Sensing an opportunity, a growing number of providers are introducing their own I-SNPs or figuring out ways to partner with other providers. In 2019, there are 62 provider-led special needs plans across the country, a number that Parkinson figures will double in the next five years.
Last January, AHCA/NCAL launched the Population Health Management Council to represent members that own Medicare Advantage plans, mostly I-SNPs. All 24 AHCA/NCAL member-owned plans are represented on the Council which advocates at CMS, develops strategies and shares best practices.
Parkinson attributes the growth of I-SNPs to the fact that the plans create a funding stream for innovation to keep residents healthy. Under the I-SNP arrangement, skilled nursing providers are paid a per member, per month payment (PMPM) to take care of the medical needs of a resident.
Eighty-five percent of the payment must be used for health care services. Fifteen percent is reserved for administrative expenses such as payment of claims, enrollment, sales, marketing, and profit. If the plan keeps members healthy through additional wellness services and/or reducing avoidable hospital admissions it can keep the savings it creates after all administrative and medical expenses are paid.
One example of the innovation that comes with owning a health plan is the application of an enhanced primary care team. Nurse practitioners are employed to see plan members and ensure they are receiving the right care, at the right time, in the right setting.
Typically a Medicare beneficiary has to spend three midnights as an inpatient in the hospital to access their Medicare benefit and begin receiving skilled nursing services. Providers that own a plan can choose to waive the three-day prerequisite.
This allows a nurse practitioner to “turn on” the Medicare benefit when a change in condition that requires skilled care is noted without the member/resident ever leaving the facility. In this scenario, an avoidable inpatient stay and corresponding expense is averted and the member/resident receives the treatment they need without the trauma of being transported to the emergency department and being admitted to the hospital.
“It’s a win-win,” said Parkinson. “Residents are healthier and providers take control.”
Early results are encouraging. A recent study showed that I-SNP members had 38% fewer hospitalizations than other Medicare beneficiaries, 51% lower emergency department use, and 45% fewer readmissions. Also, the rate of skilled nursing facility usage was 112% higher.
“The clinical outcomes are astonishing,” said Parkinson.
There are different ways to approach the provider-led I-SNP opportunity, he noted. Big providers have started their own insurance plans, while smaller providers are partnering with each other and with administrative firms that help set up the plans.
Parkinson hopes the upcoming Summit will offer something for everyone, those just getting started and those with an existing plan looking to succeed. “We will cover the spectrum of options,” he said.
The Summit will feature speakers from CMS to provide its perspective, and providers that have created plans to discuss the pitfalls and pluses. “It’s an opportunity to learn and hear about the latest best practices,” said Parkinson.
The Population Health Management Summit for Long Term and Post-Acute Care Leaders will be held December 9-10, 2019, at the InterContinental, Washington, D.C., The Wharf. For details and to register visit PHM.ahcancal.org.