PA/LTC reimbursement is changing

​THE PROBLEM WITH THE FUTURE IS, IT IS NOT WHAT IT USED TO BE!

After attending The Society for Post-Acute and Long-Term Care Annual Conference in Tampa last week, it has become abundantly clear to GPS that the move from the traditional fee-for-service model to value-based payment (VBP) models is well under way and growing.  For example, in 2022, nearly half of (48%) eligible Medicare beneficiaries – 28.4 million people out of 58.6 million Medicare beneficiaries overall – are enrolled in Medicare Advantage plans. Medicare Advantage enrollment as a share of the eligible Medicare population has more than doubled from 2007 to 2022 (19% to 48%). The percentages vary from market to market, but the reality that traditional fee-for-service Medicare is under siege and will not ultimately survive.

The presenters at the conference shared information about several VBP models that, in addition to Medicare Advantage plans, are redesigning the way elder care services are reimbursed and, as a result, changing the way elder care services are delivered. They also confirmed that The Centers for Medicare and Medicaid Services (CMS) intent to have no fee-for-service beneficiaries by 2030 is sincere and that over time the replacement VBP models will implement increasingly stringent metrics for providers to get reimbursed which could lead to reduced actual reimbursement. Similar to what has happened with recent fee schedule adjustments but potentially on steroids.

It has become abundantly clear that these decisions by CMS are creating an “adapt or die” period in the business cycles of PA/LTC medical practices. Practices that are owned by clinicians that want to retire or otherwise exit this sector of healthcare may be happy to ride things until they want to shutter or sell their practice. Another alternative is to go ahead and sell now because there are entrepreneurial investors both inside and outside of this market sector that believe they can make money, at least in the short term, based on the current VBP models promulgated by CMS. Or there may be hybrid models where practice owners can decide to partner with one or more of the VBP focused entities that are aggregating the number of Medicare beneficiaries under their contract with CMS.
GPS has been following these developments closely and can assist PA/LTC Practice Leaders evaluate what is occurring in the market. Change is rarely easy, but the difference between success and failure may be to become educated and make informed decisions. If you are evaluating the options between:

• maintaining the status quo
• joining a Medicare Shared Savings Program (MSSP) Accountable Care Organization (ACO)
• joining a Realizing Equity, Access, and Community Health (REACH) ACO
• selling your practice
• etc.​

please consider calling GPS at (804) 403-3833 for a no-risk consultation.

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