During a year in which skilled nursing operators faced tremendous operational and financial pressures, Longevity Health Plan launched services in three new states and expanded its footprint significantly in those it already served.
Explosive growth for the provider of Institutional Special Needs Plans underscores skilled nursing providers’ increasing willingness to partner for patient care, especially if partners add clinical capabilities and provide a buffer against lower Medicare Advantage reimbursements.
“I think this is a very proactive, thoughtful strategy for skilled nursing facilities to really take a lead in value-based care,” said Marc Hudak, chief growth officer for Longevity. “Historically, when SNFs think about Medicare Advantage, they think about reduced reimbursements, prior authorizations, concurrent stay reviews. … They’ve been almost essentially the victim of value-based care. This opportunity for I-SNPs, it puts the skilled nursing facility as the driver, the visionary.”
I-SNP growth accelerates
With I-SNPs, operators accept a capitated payment for residents who become members. In exchange, they get plan-provided extras such as nurse practitioners, ancillary services and preventative programs targeting traditional provider pain points. Providers that hit contract goals also can earn bonus payments.
The number of special needs plans (including plans for dual-eligible beneficiaries and patients with chronic conditions) has risen steadily since 2015. The growth rate accelerated in 2020 and 2021, according to a Kaiser Family Foundation study. There was a 15% jump in the pandemic’s first year.
Optum’s I-SNP care model for skilled nursing remains dominant in the industry. But others are making a mark. Increasingly, providers are battling for market share as the number of patients covered grows by double-digit percentages year after year.
Longevity’s latest expansion into Colorado, being announced Tuesday (Jan. 18), gives it access to about 80% of that state’s skilled nursing beds. When it grew its reach in Florida, Illinois and New Jersey last fall, the company picked up nearly 300 additional facilities with more than 33,000 beds.
But the I-SNP segment still accounts for a small share of the broader special needs plans. It has just over 95,000 enrolled members, according to a January CMS report. Meanwhile, some 4 million are enrolled in special needs plans for individuals qualifying for Medicare and Medicaid.
I-SNP ‘growth to be had’
There is plenty of growth to be had. Potentially strong margins continue to attract new plans backed by venture capital, says Cheryl Phillips, M.D., president and CEO of the SNP Alliance. A former AMDA and LeadingAge executive, Phillips says partnering with a well-equipped I-SNP could boost the overall clinical performance of nursing homes.
“In many ways, a highly thriving I-SNP brings quality to the nursing home across the board,” she says. “At least that is the theoretical potential. What we haven’t yet seen is data. I would love to see data about successful ISNPs and are the nursing home (star ratings) better? … There’s lots yet for us to uncover and explore.”
Still, Phillips warns financial incentives shouldn’t be the only reason nursing homes opt into I-SNPs.
“If that’s your only motivation, if you’re not willing to put in all of the other elements that are going to be necessary, most of these I-SNPs find themselves struggling,” she said.
A few skilled nursing providers have successfully launched their own plans. Among them are PruittHealth’s Premier, in the Southeast, and American Health Plans, operating largely in the Midwest and West. American Health announced an expansion into two new service areas earlier this month.
About 19% of CEOs surveyed by McKnight’s late last year said they were looking to get more involved with I-SNPs. Some experts offer words of caution.
“More and more large skilled nursing chains are looking into this option,” Susie Mix, owner of Mix Solutions, a managed care and contract consulting firm, told McKnight’s. “I will say that it is a huge undertaking, and if you don’t have experts running this line of service, you can stand to lose a significant amount of money.”
Choose the right I-SNP partner(s)
For many operators, it may make more sense to join an existing plan. There are a growing number of options. Those plans are largely targeting areas where they can attract patients in the numbers needed to sustain the business model.
“When we look at a new market, critical mass is very important,” Hudak said. “Setting up a brand new health plan, building a provider network, hiring a dedicated local staff. There’s a lot of infrastructure that goes along with the type of plan like ours that is laser-focused on improving clinical outcomes.”
The model emphasizes treating residents in place and avoiding unnecessarily hospital transfers. Longevity adds advanced practitioners to oversee care for members on-site in skilled nursing facilities. They also coordinate with primary care doctors, pharmacists, geriatricians, and other clinicians as appropriate.
Phillips added that those services are important. So are a full understanding of any provider’s compliance record, the details in its service agreements and whether it can add specific services such as wound care.
Longevity, for instance, added Tai chi and chair aerobics for members as part of a risk-reduction program when COVID-era data showed falls increasing amid staff shortages.
“Any value-based care arrangement has to have fully aligned financial incentives,” Hudak noted. “You have to have transparent information so you know what’s happening and you have to have an aligned clinical partner to work as a team.”
