Inside the New Medicare Advantage Push from 10 Senior Living Providers

As more senior housing and care providers get in the Medicare Advantage (MA) game, it is becoming increasingly clear that they are playing a team sport.

A striking example comes from Minnesota’s Twin Cities, where 10 different providers have come together with a health insurer and a geriatric medical practice/care management organization to launch one of the largest special needs plans in the country, dubbed Medica Advantage Solution PartnerCare.

This team approach is driven by the scale needed to support a plan and the overall complexity of Medicare Advantage, which refers to health plans funded via payments that the federal government makes to private sector insurance companies. These insurers create benefits packages and manage services, with the underlying principle being that they can make money while providing more efficient care than traditional Medicare.

Advertisement

The backstory behind the Twin Cities MA initiative reinforces that for many senior living providers, success in Medicare Advantage will depend on strong relationships built over time with various players in their local markets, and alignment of plan ownership and financial interests.

Assembling the team

The Twin Cities collaboration traces back to nonprofit senior living provider Presbyterian Homes & Services (PHS). The St. Paul, Minnesota-based organization has about 7,000 units across 15 life plan communities, 27 independent living buildings and three nursing homes, making it the fourth-largest U.S. multi-site nonprofit on the 2019 rankings from LeadingAge and Ziegler.

Presbyterian Homes has been in the managed care arena in the past. About 20 years ago, it was partnered with three other senior care providers on a fully at-risk health plan that ultimately grew to about 1,500 members, Presbyterian Homes CEO Dan Lindh told Senior Housing News.

Rule changes from the Centers for Medicare & Medicaid Services (CMS) caused the providers to sell that plan to insurance giant UnitedHealth in the early 2000s. But the managed care space continued to evolve as the overall U.S. health care system underwent dramatic changes, including those related to the Affordable Care Act. Presbyterian Homes kept an eye on these changes, and Lindh began to see opportunities.

For instance, CMS in April 2018 announced that new, more flexible benefits would be allowed in Medicare Advantage plans. These benefits included some care services commonly delivered in senior housing settings.

“When the opportunity came around again, and CMS started thinking again about more broad applications … we were very interested,” Lindh said.

Presbyterian Homes began to explore the possibility of launching its own special needs plan — a type of MA plan specifically tailored for people living in long-term care and senior living settings. Scale became a sticking point for PHS, though. Specifically, the organization was not able to assemble the needed network of medical providers to make a plan viable.

“The providers in town were reluctant to give what I would call good deals or, in some cases, even access,” Lindh said.

The next option was to work with an existing health insurer, to tap into an established medical network while partnering on a plan that would entail financial upside and downside for Presbyterian Homes.

As discussions with health insurers proceeded, another opportunity presented itself: To acquire a 50% stake in the organization now known as Genevive, which specializes in providing care and case management to older adults in the Twin Cities area, including many living in senior housing settings.

That transaction was announced in October 2018. Health system Allina owns the other 50% stake in Genevive.

Through that deal, PHS gained a touchpoint with the sizable population Medicare Advantage beneficiaries receiving service through Genevive, including about 3,500 individuals in value-based contracts, with more than 2,000 located in assisted living or single-family homes.

Minnetonka, Minnesota-based Medica was among the health insurers working with Genevive. The nonprofit provides health plans in the employer, individual, Medicaid and Medicare markets across nine states, with roughly 1 million total plan members and annual revenue of around $5 billion.

When approached by PHS about working together to create a special needs plan for residents of senior housing and care communities in the Twin Cities area, Medica did not require a hard sell. This was due partly to Medica’s confidence in Genevive’s ability to effectively manage this beneficiary population, as well as Medica’s experience in serving similar populations with other products in the Medicaid and Medicare space.

Indeed, part of Medica’s overall mission is to work with the community of providers — from hospitals to physicians to skilled nursing facilities and assisted living communities — to make care and services available to vulnerable populations, Tom Lindquist, Medica’s SVP and general manager of government programs, told SHN. The Presbyterian Homes proposal was aligned with these goals.

“It was for us just an extension of a philosophy and a strategy that we already have,” Lindquist said.

At this point, the pieces were finally in place to begin the hard work of bringing a plan to market. Medica had the expertise in plan design and pricing and in interfacing with CMS, while Presbyterian Homes, Allina and Genevive together had a wraparound model of care to serve the potential beneficiary population. Given its confidence in that care model, Presbyterian Homes went at-risk, meaning that it would gain financial upside if costs and outcomes exceed CMS expectations but would lose money if the plan does not meet thresholds.

But the team-building for this plan extended even further. PHS met with other providers in the Twin Cities area, pitching them on making the forthcoming plan available to their residents. Nine additional providers got on board.

One of those providers, Walker Methodist, had also been a collaborator on the earlier managed care plan that ultimately was sold to UnitedHealth.

“When this opportunity came, we jumped on it,” Walker Methodist CEO Scott Riddle told SHN. “We feel real comfortable with the partnerships, the people that are involved in that network, and we think it has a real potential to help our residents.”

In particular, a special needs plan tailored specifically to senior living residents can include benefits that will be particularly powerful in meeting their needs and improving outcomes, Riddle noted. In addition to the care coordination piece, the PartnerCare plan waives the three-day qualifying hospital stay for skilled nursing facility care, and includes dental, vision, hearing, transportation and other benefits.

The plan will be available exclusively to qualified residents of these nine providers, plus residents of PHS, creating a pool of 5,500 potential beneficiaries. Coverage is slated to begin in 2020.

Having a pool of this size helps mitigate financial risks — for instance, by reducing the impacts of outlier, high-cost beneficiaries. PHS negotiated gainsharing agreements with the other nine providers involved, so that they too have incentives to create efficient, effective care.

In other words, the team is large, and it’s important for everyone to be working together to achieve common goals. This is accomplished not only through setting up financial interests that align, but doing the work on the ground to introduce the plan to potential beneficiaries and create the infrastructure, trust and understanding between all the players. Currently, Genevive is collaborating with Medica on a five-phase rollout to establish relationships with all the senior living communities involved in the plan.

“We’re all swimming in the same direction,” Genevive CEO Amanda Tufano told SHN.

Not an isolated case

The Medicare Advantage journey for Presbyterian Homes has already been long and winding, involving years of work and the allocation of significant resources, including the time and attention of company leaders. But all this effort is worthwhile, in Lindh’s view, because of a relatively straightforward set of facts.

Namely, by providing high-quality and coordinated care to older adults, Presbyterian Homes is driving significant savings to the U.S. health system and the Medicare program specifically, by reducing hospitalizations and emergency room visits and other high-cost and often ineffective interventions and care episodes.

Yet, Presbyterian Homes has not been able to share in this savings.

By getting involved on the payer side, Lindh hopes to create a “virtuous circle of reinvestment,” in which the organization can capture some financial upside from the efficiencies it drives. PHS can then funnel some of those dollars back into its efforts to promote wellness, manage chronic diseases, aid care navigation, and pursue innovations such as genome testing to personalize care. This should in turn drive further savings to the health system and further financial upside to PHS.

This same line of thinking extends to other senior living providers that are making moves in Medicare Advantage.

Take Bloomfield, New Jersey-based Juniper Communities. The provider’s Connect4Life program of comprehensive, coordinated care is saving the Medicare program roughly $4 million to $6 million each year, according to an analysis done by Anne Tumlinson Innovations.

To capture some of that upside, Juniper has teamed with two other providers — Englewood, Colorado-based Christian Living Communities and Columbus, Ohio-based Ohio Living — on The Perennial Consortium. Announced in February 2019, the Consortium is working with managed services partner AllyAlign to bring a Medicare Advantage plan to market.

In other words, Juniper is doing something similar to what is unfolding in the Twin Cities: working with other senior living providers to gain needed scale, with a partner in AllyAlign that is skilled in plan creation and interfacing with CMS.

In another example of growing MA integration with senior living, Toledo, Ohio-based real estate investment trust Welltower (NYSE: WELL) recently struck a partnership with CareMore, an affiliate of Anthem. Similar to Genevive, CareMore dispatches teams into senior living facilities to provide on-site services and coordination to Medicare Advantage beneficiaries, helping to improve outcomes and consumer satisfaction — and increase length of stay — while controlling plan costs.

Despite the potential upside, Medicare Advantage comes with significant risks. Margins on the plans themselves can be quite low — as thin as 1% to 2%, Lindh said — and difficult to achieve. Other financial benefits should flow from MA involvement, including increased length of stay, but to a large extent these remain theoretical until this newest generation of plans hit the market and results can be measured.

Add to this uncertainty the sheer amount of work that MA calls for, and the complications that arise from trying to team up with organizations that in other respects are competitors. It’s easy to understand why many senior living providers are in “wait and see” mode — even if they believe that MA is destined to become an integral part of the industry in the future.

“I suspect that there’s a lot of players that will talk about it as a good idea and think about it as a good idea, and when it comes down to real execution, less are going to be able to get to the finish line,” Lindh said.

It’s wise to be cautious, but this could be a time when sitting on the sidelines actually is riskier than getting involved, suggested Walker Methodist’s Riddle.

“I’d rather be learning a ton going through the processes and having a say, than sitting back and waiting to see how this is all going to shake out,” he said. “ … This is the time to stick your foot — maybe your whole leg — in, and say okay, let’s figure it out. Change is coming. Let’s be part of that change.”

Companies featured in this article:

, , , ,