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An emerging issue of concern for advocates is nursing facilities’ increased marketing of “in-house” managed care plans – specifically, Institutional Special Needs Plans, or I-SNPs – to their residents.[1]  These Medicare Advantage plans are limited to beneficiaries who require, or are expected to need, institutional long-term care for 90 days or more.

A recent article in Skilled Nursing News describes the “boon” for some nursing facility companies in developing their own I-SNPs, citing Marquis Companies. Skilled Nursing News reports, “Marquis Companies, which primarily operates in the MA hotbed of Portland, Ore., has seen $10 million in revenues since it launched its AgeRight Advantage plan in January 2017.”  Operating an I-SNP gives long-term care companies “greater control over their reimbursement fates.”  In 2015, “there were about 65 plans nationwide with a total of 50,000 covered enrollees; in just three years, that number rose to 113 and 75,451, respectively.”

While I-SNPs may be financially advantageous to nursing home chains, they can create real dangers of non-coverage for nursing home residents who buy the plans.  Last year, Kaiser Health News examined Erickson Advantage, an I-SNP offered solely to residents of Erickson Living, its continuing care retirement community (CCRC). 

A resident of an Erickson CCRC in Massachusetts, who had an Erickson Advantage plan, was hospitalized and then returned to the skilled nursing facility (SNF) part of the CCRC.  After 11 days, Erickson Advantage advised the resident’s daughter that her mother no longer needed daily therapy and, as a result, that the plan would no longer cover her stay at the SNF.  The SNF billed the resident a daily rate of $463, later raised to $483.  The daughter appealed the denial of coverage for the SNF stay.  She eventually lost her administrative appeal before the Administrative Law Judge who, relying on testimony from the SNF staff, held that her mother’s stay in the SNF was not covered by Erickson Advantage.  The resident’s bill for the SNF was $30,000 and counting at the time of the Kaiser report.  The Erickson CCRC in Maryland reversed its denial of coverage for a SNF stay of another resident, following an inquiry by the Kaiser reporter.

Kaiser Health News quoted Center for Medicare Advocacy attorney Toby Edelman as saying that in-house plans reflect a conflict.  While CCRCs claim they provide a full range of services to their residents, including SNF care, the managed care plan sold to the CCRC’s residents may decide that the SNF stay is not covered.

July 19, 2017 – T. Edelman


[1] Alex Spanko, “In-House Insurance Plans May Boost Skilled Nursing Operators, But Not Without Risk,” Skilled Nursing News (Jul. 8, 2018), https://skillednursingnews.com/2018/07/house-insurance-plans-may-boost-skilled-nursing-operators-not-without-risk/

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