By now, we’re all pretty familiar with the fact that managed care is altering the post-acute care payor mix with Medicare Advantage plans. This is a byproduct of national policy, intended to offset our industry’s reliance on fee-for-service Medicare payments by introducing value-driven efficiencies. 

We are experiencing many challenges as our post-acute world transitions to having managed care payors covering the majority of patients. The ways this shift impacts providers are exasperating as large health plans have been changing their reimbursement methodology from PDPM to Leveled Contracts.

MA in the USA

To put the Medicare Advantage growth into perspective, there are more than 3,998 MA plans available in 2023, the largest amount offered since Kaiser the Family Foundation began keeping count in 2010. KFF reports that the average Medicare beneficiary in 2023 can choose from 43 Medicare Advantage plans.  

Twenty-one states are now at 50% or higher statewide MA penetration, with Alabama and Michigan leading the way at 57% each. Medicare Advantage penetration is projected to increase for years to come. 

The rise in MA enrollment and impact of levels-based contracts

As more post-acute care patients are covered by MA plans, insurers continue to experiment with payment models. Leveled contracts are intended to deliver the care a patient needs within carefully defined levels of treatment and costs. Care is often segmented into four levels. Each level has a per diem reimbursement rate and an accompanying list of acceptable treatments assigned to the level. The provider must get authorization before giving care that is at a higher level. 

There also may be a list of exclusions (additional charges that can be billed to the health plan) that are not covered in the contract’s care levels. The provider oftentimes must get authorization for providing care that is excluded. Minding this exclusions list is very important. 

So how does this process affect the provider, especially a skilled nursing facility? Critical steps must be put in place to operationalize the contract and prevent loss of reimbursement on each case. 

  1. Contracts: Get it right from the start 

Spend time on the front end when negotiating a leveled contract. Review not only rates and level definitions, but also key terms and exclusions. If you are not familiar with leveled contracts or simply don’t have the time (those health plans can consume a significant amount of time), outsource this task to someone who does. Getting it right from the beginning is important.

  1. Give access so key eyes are on a leveled contract 

Once the contract is complete, all team leaders should have easy access to it. The administrator, director of rehabilitation, director of nursing, admissions and case manager should be included. In managed care audits we’ve completed nationwide, lack of access to a leveled contract oftentimes is one of the missing pieces that undeniably has providers suffering significant financial losses. If we want to succeed with leveled contracts, that contract must be referenced daily as the team delivers care.

  1. Find a rock star case manager 

Case managers (or care managers) are the one point of contact for managed care patients. These folks are responsible for understanding the leveled contracts and referencing them daily based on the patient’s needs. If there is a change of condition and the patient requires a higher level of care, the case manager would obtain an authorization and prevent lost revenue. 

This role is critical. It is likened to the role the MDS nurse plays in traditional Medicare patient reimbursement. Unlike MDS assessments, a managed care patient’s care level needs to be reviewed DAILY. It’s imperative if we want to be paid accurately for the services we provide.

This role is time-consuming, and that’s challenging when staffing is already a pain point. The good news: There is managed care software out there that can capture changes in levels and identify exclusions, easing the burden off the case manager and making it easier for them to help secure reimbursement.

  1. Communication: Bringing it all together

The key to success with leveled managed care contracts is ensuring they are operationalized within your facility. Developing best practices, being efficient with time and resources, and having a clear workflow are paramount. All of the above requires exceptional communication. 

There are several departments and roles that touch the managed care patient experience. Daily communication is required. Whether it be through daily meetings or noted in a managed care software platform, the communication needs to be there. 

We are an industry of consistent change and movement. Some big, some small. We have adapted, bent, moved and stretched in many directions. The shift to leveled contracts is a significant change that affects our reimbursements as well as our daily management of a patient. As with any change, education, preparation and agility are keys to success.

Susie Mix, BS, MBA, NHA, is the founder and CEO of Mix Solutions, Inc. She has more than 20 years of experience in the post-acute care industry. She has firsthand experience running facilities and holds the long-term care mission close to heart. Her experience working in the field, coupled with her time spent at a health plan, provides a unique blend of knowledge that helps her provide solutions for each client. Mix has been a managed-care consultant for facilities since 2009.

The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.

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