We attended the Zimmet Conference dubbed “Roaring Reimbursement” last week at Mohegan Sun in Connecticut, and as always, the program was highly informative on the skilled nursing reimbursement and regulatory environment. The tidbit that really stuck in our minds, which was probably the intention of Marc Zimmet in his opening remarks, was that we had reached a tipping point of Medicare Advantage enrollment overtaking traditional fee-for-service Medicare enrollment, surpassing 50% as a percentage of total beneficiaries. Not only that, but despite the total number of beneficiaries increasing, the absolute number of traditional Medicare beneficiaries is declining. This will lead to fewer SNF admissions, lower lengths of stay and a lower per patient day rate, and Zimmet estimated a $275 million annual loss in reimbursement dollars for SNFs for every 1% shift in share to Medicare Advantage.
What is especially painful is that the shift to MA plans is not only hurting SNFs, but it isn’t even saving the government money. According to MedPAC, it is estimated that Medicare currently spends 4% more for beneficiaries enrolled in MA than it spends for similar enrollees in traditional fee-for-service Medicare.” Sounds like a lose-lose situation to us. So SNFs will have to compete for a shrinking share of traditional Medicare patients to earn much of their profit. That will ultimately just result in some winners that can attract those patients, but likely a lot more losers.
