Holly O’Shea, corporate counsel for a health and management corporation, was like many of her more than 200 peers at the population health summit hosted by the American Health Care Association in December. 

She was hungry for insight and knowledge about institutional special needs plans, or I-SNPs, an insurance model that has taken the long-term care field by storm.

She and colleagues are starting an I-SNP, and she was looking for confirmation that they are on the right track. 

“For us, the I-SNP was an opportunity to take credit for the work we do,” she told McKnight’s Long-Term Care News following breakfast  in a crowded session at the Intercontinental Hotel in Washington D.C.’s stylish Wharf area.

She was pleased to find that speaker after speaker echoed her sentiment as experts at the conference offered healthy doses of optimism for I-SNPs and other Medicare Advantage plans.

AHCA’s first-ever population health conference was, in fact, a response to the robust interest and growth in I-SNPs over the last couple of years — as well as a reaction to what many see as an incursion of MA programs and demands into long-term care. 

The figures tell the story: In 2015, the number of I-SNPs totaled 57. As of October 2019, that number had more than doubled to 125. During that period, the number of provider-led I-SNPs also boomed, from 5 in 2015 to 44 in 2019.

In January, AHCA kicked off the Population Health Management Council, which has more than 25 members, and served as an impetus for the conference.

The fervor surrounding the I-SNP is real, experts said.

“It is the most exciting thing I have worked on in my 30-year career, without question,” said respected consultant Anne Tumlinson, CEO of Anne Tumlinson Innovations, a conference speaker. “This is the kind of thing we’ve been waiting for.”

Providers that have dived into the I-SNP arena are equally bullish. 

“We feel we are finally getting our worth in the healthcare space and making nursing homes more relevant,” said J. Mark Traylor, a nursing home operator who sits on the board of Simpra Advantage Inc., an I-SNP based in Alabama.

Fellow I-SNP stakeholder Mark Scharnberg, executive director of Great Plains Medicare Advantage, an I-SNP connected with the Good Samaritan Society, also was positive. He noted that the I-SNP has allowed Good Samaritan to reduce hospitalizations and care for residents in place. “This has been without a doubt the right investment for us to make,” said Scharnberg, who along with Traylor, spoke to the media in a special session during the conference.

Understanding the I-SNP

While SNPs, which include D-SNPs (for dual eligibles) and C-SNPs (for people with chronic disease) have been around since 2003, experts easily can pinpoint why there has been a more recent surge of enthusiasm for the plans. As enrollment in MA continues to grow, for the first time, thanks to I-SNPs, long-term providers feel that they are in the driver’s seat when it comes to delivering care to the nation’s frailest and sickest populations.

Under the I-SNP model, facilities receive an up-front per-member, per-month payment. 

“You are investing in a nurse practitioner clinical model that allows you to hire someone on salary and put them in your building,” explained Jill Sumner, vice president of population health management for AHCA.

Her counterpart at LeadingAge agreed. 

“Long-term care providers now are in a prime position to affect outcomes of individuals they serve,” said Nicole Fallon, LeadingAge’s vice president of health policy and integrated services, and director of the Center for Managed Care Solutions & Innovations.

Who better to coordinate the needs of nursing home residents in the continuum — whether it be renewing their medications or dealing with hospital discharge planners — than the facilities themselves, Fallon argued.

“We’re constantly knitting those pieces together, which puts us in a great position to lead SNPs,” she said.

It also is well-known that fee-for-service does not adequately cover proper physician and nurse practitioner coverage. And unlike other MA models, such as bundling or accountable care organizations, where hospitals or doctors distribute the gainsharing, with I-SNPs, nursing homes control the purse strings.

One of the key draws of the program is its regulatory flexibility, Sumner pointed out. Under the I-SNP, providers can waive the three-day prior hospital stay. This means a resident can go to the hospital for one day and still receive Medicare benefits. 

“There are regulatory flexibilities built into the Medicare Advantage program that make a lot of sense and give you flexibility to deliver care in a more seamless manner,” she said.

The main reasons to form an I-SNP are to improve quality of care and keep residents out of the hospital, noted Steve Fogg, CFO of Marquis Companies, which launched its I-SNP in 2017 in the Pacific Northwest. Having nurse practitioners and doctors on-site on a regular basis “allowed us to improve our outcomes with respect to hospital readmissions and other value-based metrics in terms of our revenue stream,” said Fogg, co-chair of AHCA’s Population Health Management Council. “So it provided an economic engine to help fund those positions.”

The model works only for those providers that have a commitment to quality in their buildings, he pointed out. “You have to have a culture, as well, that you can get your traditional clinical teams to buy into,” he said.

Experts also were quick to note that I-SNPs are not a panacea and they are not for all providers. A significant investment in terms of capital and a shift in mind-set — taking on an I-SNP effectively is changing the business providers are in — is necessary to get the insurance plan off the ground. And, most importantly, a provider needs enough residents to make it worth their while: 500 to 1,000 residents is the recommended membership level. Fogg noted that Marquis has a high penetration rate of 72%, but the economics are still difficult. 

“We feel we are doing a good job, but it’s still close to break even,” he said.

For smaller providers, partnering with other organizations to form an I-SNP or teaming up with a larger MA organization may be the best idea, stakeholders suggested.

Best yet to come?

Despite the challenges, there is no question that I-SNPS are here to stay, at least for the foreseeable future. Congress made that clear when it passed (and President Trump signed) the Bipartisan Budget Act of 2018, which included the CHRONIC Care Act, permanently authorizing SNPs. 

Skilled nursing providers, who are constantly reading the tea leaves, take this legislative action as a sign that I-SNPs and other MA models are the future of the industry.

And there continue to be more encouraging signals on the policy front. In 2019, CMS allowed SNPs to include supplemental health benefits, such as meals, transportation, in-home supports and services, and adult day care. In 2020, a whole new category of supplemental benefits will be available to SNPs. These benefits are related to social determinants of health and could include offerings such as pest control, post-discharge meals and service dog support.

Perhaps the most promising sign for I-SNPs happened at the end of AHCA’s two-day conference — when a panel of CMS regulators endorsed the insurance program. 

Consultant Tumlinson considered such an event a significant turning point.

“When, in the history of this industry, has there been such a collaborative and positive exchange between the policymakers and this industry? Never,” she asserted.

“Here’s why: When you as a provider step and go through all the regulatory hoops and challenges and run a compliant and successful health plan taking on risk for the highest-cost, highest-need population CMS has to deal with … you’ve earned CMS’ respect, you’ve earned policymakers’ respect, and that totally changes the conversation.”