WASHINGTON, DC — A federal push to move more Medicare beneficiaries into value-based care presents senior housing operators with a valuable opening of their own: a chance to claim financial incentives that have traditionally gone to healthcare providers alone.
That was among the opening day messages at the National Investment Center’s fall 2024 conference, where Lisa McCracken, head of research and analytics for NIC, hosted a session on senior housing’s investment outlook and value proposition.
The Centers for Medicare & Medicaid Services, private insurers and other provider types are all looking to manage and improve beneficiary outcomes, said Dianne Munevar, vice president of healthcare strategy for social science research organization NORC.
Building on data she presented at the spring NIC conference that shows a senior living move-in is followed by greater access to primary and preventative care and increased longevity, Munevar pressed senior housing providers to more formally step into the healthcare world they’re already straddling — with or without skilled nursing assets.
Munevar revealed new data that showed significant Medicare cost reductions in a cohort of 90,000 beneficiaries living in assisted living and independent living. About a quarter of all those beneficiaries saved Medicare money while in senior housing, about 20% less among the AL group and 17% less among the independent group.
Munevar said most of that came from fewer skilled nursing stays, reduced emergency department visits, and fewer hospitalizations. Senior housing operators’ ability to manage those factors may make them a valuable partner to CMS, she said.
“CMS is concerned not just about outcomes, but costs. It’s just very expensive right now to manage risk. They are looking for all sorts of opportunities, all sorts of solutions,” Munevar said, noting dozens of CMMI demonstrations that target change in a piecemeal way but don’t so far pay for a comprehensive housing and healthcare combination.
“What is your staff doing differently? What are owners doing differently to generate those reductions and savings?” Munevar asked.
Many skilled nursing providers have found it hard to capitalize on value-based care initiatives, and the idea of senior housing taking a bite of the same apple could be seen as unwelcome.
McCracken told McKnight’s Long-Term Care News that determining how and where to provide for residents who have higher needs will be a key component in crafting any value-based strategy.
“If we are able to bend the healthcare cost curve outside of the skilled nursing space, then what could that mean for the providers, the MA plan that the residents are enrolled in, the ACOs they may not even know they’re in?” she said in an interview after the session. “If you are able to keep them out of the hospital, keep them out of the ED … and you’re managing my beneficiaries better than those in the greater community, I want to talk to you.”
That means more “arrows in the quiver” for senior housing, she said, but also more pressure on their nursing home components (or external skilled partners) to limit unnecessary hospital interactions. More senior housing operators, too, are successfully shifting some care that used to be considered skilled into AL settings under state-level Medicaid waivers, McCracken reminded.
No incentives, yet
Munevar’s findings are even more remarkable because they’re happening without the financial alignment or regulatory flexibilities present in Medicare Advantage and other accountable care organizations CMS is prioritizing. Bringing those incentives to senior housing, she said, could help encourage broader adoption of successful healthcare strategies in senior living communities nationwide.
“While the [seniors housing] industry is not yet at risk, there’s the potential that you may want to generate, you may want to participate in these value-based contracts,” Munevar said. “CMS is really going to start looking at all of the stakeholders involved…. Who’s managing these individuals and how can those organizations better serve beneficiaries and align with their own goals?”
While McCracken said “grumbles” about misplaced or misaligned incentives are common in senior housing she noted the sector still has “some wood to chop” before becoming a major player in the VBC world.
CMS has said it wants all Medicare patients on some type of accountable care plan by 2030, which means senior housing providers still have a good window to shape policy and payment, Munevar countered.
“You get to help define what that is. Rather than eventually get attacked with a burden, with regulation and financial incentives that don’t meet your needs, get there as soon as possible,” she said. “Demonstrate that you have value and articulate what a contract could look like.”
See more coverage of this session in McKnight’s Senior Living.
