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Study Finds Medicare Advantage Plans Control of Post-Acute Costs Frustrating SNFs

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A recent study by “The American Journal of Managed Care” found Medicare Advantage (MA) Plans are attempting to reduce post-acute care spending by capping the lengths of stay and by limiting the Skilled Nursing Facilities (SNFs) in their networks. This study was aimed at the methods used by MA plans and the unintended consequences.  The study included interviews with 154 administrative and clinical staff working in 10 MA plans, 16 hospitals and 25 SNFs in eight markets across the US. The markets that were selected varied based on region, county size, and MA penetration rates.   The staff interviews included Chief Medical Officer, Care Manager, Nursing Home Administrator, Admissions and other key SNF personnel.

This is relevant as more and more Medicare beneficiaries are transitioning to MA.  There are currently more than 20 million Medicare beneficiaries representing 34% of all Medicare beneficiaries who are enrolled in a MA plan.  There is speculation that this number will continue to grow with an 11% increase in MA enrollment expected from 2018 to 2019.

Study’s Key Findings

  • MA plans attempt to reduce spending by directing their patients to certain SNFs by influencing their patients SNF selection with a list of facilities that would be covered.
  • MA plans also controlled the patient’s length of stay while in the SNF by authorizing only a certain number of days. The MA plans did not provide guidance or assistance to the SNF to ensure the length of stay limits were met.
  • MA plans administer care with these restrictions because they receive capacitated payments to provide Medicare-covered services.
  • SNFs responded negatively to the MA plans authorization based length of stay system. Some felt the MA plan practices were too burdensome and authoritative and could result in SNFs refusing to admit patients from certain plans. Other providers felt negative consequences resulted in the authorization requirements to include longer hospital stays due to the administrative authorization requirements for placements.
  • SNFs being unwilling to admit patients from certain plans could have serious implications since patients could be adversely affected if SNFs push back on the MA plans.
  • Other research through this study revealed when comparing traditional Medicare beneficiaries to MA beneficiaries, the MA patients used SNFs less frequently, have a shorter length of stay and experience fewer readmissions and have a greater likelihood of being discharged home. However, MA patients are more likely to receive care in lower quality SNFs and have higher rates of switching to traditional Medicare following the SNF stay.
  • There appears to be a disconnect consistent with care coordination. Even though the MA plans engaged approaches that included their care managers placed in SNFs, the SNF provider participants did not agree that much of that was actually happening.
  • However, SNF providers did feel dedicated resources working with the MA plans had benefits including working within the authorization requirement framework.


In their interactions with hospitals and SNFs, MA plans attempted to influence the choice of SNF and length of stay to control the post-acute care spending.  However, when plans exert too much control over hospitals and SNFs, the study results indicated delays in the hospital’s discharge and SNF avoidance of MA plans may result.

MA plans should evaluate the overall cost to treat patients requiring post-acute SNF care following discharge and their treatment outcomes.  Delays in hospital discharge may result in higher inpatient bills as some patients may no longer be affected by the Medicare post-acute transfer rule; therefore resulting in a higher reimbursement paid by the MA plan to the hospital.   A full analysis of the cost to treat the patient and their post-acute outcome will portray the full financial and clinical picture. If you have any questions or concerns, fill  in the form below and one of our specialists will be in touch.

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