Nursing homes' strong negotiating position with ACOs will not last long, legal expert says

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Skilled nursing facilities that delay joining an Accountable Care Organization will likely be losers in the healthcare marketplace, according to John Durso, a partner and senior member of the Healthcare Practice Group at the law firm of Ungaretti & Harris LLP. He is also the "Ask the Legal Expert" columnist for McKnight's. Speaking at the Life Services Network conference in Chicago on Thursday, Durso offered tips for nursing homes that are negotiating to join an integrated care network.

ACOs and similar models that coordinate acute and post-acute care are destined to replace the current healthcare delivery system, Durso said.

“Going it alone is not really viable today,” he said. “If you're not part of an ACO, your patient base is probably going to shrivel up, at least on the Medicare side.”

Nursing homes will weaken their negotiating position with ACOs if they do not act fast, Durso stressed.

“If you don't get in now, early, while they're in their formative stages, what they're going to do is come and offer you a contract in two to three years. And it's going to be, this is what it is, take it or leave it,” he said.

By negotiating now, long-term care providers can ensure they have a seat at the table of the ACO, so they can influence decision making and not just play the role of a subcontractor to the hospital and physician members, according to Durso. Nursing homes can leverage their proximity to Medicare patients in negotiations to join an ACO, he said. Post-acute providers that offer home care, dialysis and rehabilitation therapy will have valuable chips in these negotiations.

Nonprofit nursing homes should be sure that joining a particular ACO will not jeopardize their 501(c)(3) status, Durso said. Nonprofit operators should also familiarize themselves with the 501(r) form. This new federal form has to be filed by hospitals, but Durso anticipates the forms will eventually be required for SNFs. 

Nonprofits fill out the form to show what community benefits they provide. The government could use the forms to argue that nonprofits' tax exemptions outweigh their community benefits, justifying roll backs of tax breaks.