Diversified long term and post-acute care (LT/PAC) providers say they are encouraged by new coverage and reimbursement policies announced by the Centers for Medicare & Medicaid Services (CMS) in its final Medicare Advantage (MA) and Part D 2019 Rate Announcement and Call Letter.

On rates, CMS said for 2019, reimbursement for MA plans would be 3.4 percent, a large increase from the 1.84 percent raise proposed in a February draft and the largest such raise for MA insurers since 2009. CMS said the higher-than-expected rate rise was mostly due to higher projections of per-person Medicare spending.

The reimbursement development is a positive for the growing number of LT/PAC providers that are offering MA plans as part of diversification efforts, as well as tapping other opportunities around the increasingly popular MA program, which has more than one-third of the Medicare market, according to CMS.

On April 2, in its policy and rate updates, CMS not only boosted MA reimbursement more than expected for next year but also relaxed a previous standard that said MA plans could not cover “daily maintenance” types of care. Next year MA plans, like those operated by Humana and UnitedHealthcare as well as LT/PAC providers and others, can cover some categories of nonskilled in-home care.

Even though the exact definition of the word “home” has not been deciphered yet, most experts expect independent or assisted living to meet the new CMS standard of being a Medicare beneficiary’s home. If so, senior living operators could be in line for new streams of MA reimbursement for selected types of care provided to residents enrolled in MA plans with this benefit.

In reaction to the CMS action, LT/PAC providers say they see some significant opportunities from the changes. Neil Pruitt Jr., chairman and chief executive officer of PruittHealth, tells Provider that while “single-play providers [those not diversified into other business lines] will see increased competition, as a home health provider we are bullish on the announcement. We see a great opportunity to further our model of care in the communities we serve.”

Lynne Katzmann, founder and president of Juniper Communities, says the call letter together with the passage of the Chronic Care Act are “very exciting and I believe will yield strong benefits over the long term for residents, our industry, and for society at large.”

The Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2018 gives MA plans more flexibility to cover “nonmedical” benefits like wheelchair ramps for people with chronic illnesses and opens up more telehealth services to MA members, among many other measures.

Further, Katzmann tells Provider that by providing flexibility to MA in the benefits they may provide, “we are effectively opening a new revenue source for frail and chronically ill seniors, many of whom call our senior living communities home.”

For Juniper and other operators, this change by CMS “offers the opportunity to continue to provide the service-enriched housing we have always provided but also augment our programs to provide the greater levels of care so many of our residents now need, as the resident will now have the ability to enroll in MA plans that cover the cost of providing that care,” Katzmann says.

As a result, that should mean an expansion of the number of financial-eligible residents who can benefit from seniors housing.

“The recent changes also extend the government’s support of Special Needs Plans, a specially designated program that closely resembles MA,” she says. “As a cost-effective provider of housing with services, we stand to benefit from capitated premium dollars as we spend less by reducing the use of high-cost, hospital-based services through prevention and early intervention.”

Katzmann says Juniper’s Connect4Life model, which integrates the service-enriched housing with clinical chronic care management, has been shown to reduce hospitalizations 50 percent and expensive readmissions by 80 percent.

Read the full CMS announcements at https://tinyurl.com/y8onl2un.