As Medicare Advantage continues to penetrate the nursing home market, leaders say that MA plans are depressing margins amid higher costs to run operations. This might lead some operators to contemplate closing, while others will be wiser to hire staff in designated roles to help them negotiate better rates – and exclusions – for managed care contracts.
Data confirms that managed care rates are bringing down margins in the space, with MA plans paying one-quarter to one-third less to SNFs than traditional Fee-for-Service (FFS) Medicare, according to statistics put out by the National Investment Center for Seniors Housing & Care (NIC) and published in a Forbes piece by Howard Gleckman, also a senior fellow in the Urban-Brookings Tax Policy Center at the Urban Institute, where he edits the fiscal policy blog TaxVox.
Traditional Medicare amounts to nearly $600 per resident day in revenue, while managed Medicare is paying out only $468 per day, NIC data shows.
