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Leaders from three nursing home groups said they have walked away from Medicare Advantage contracts they considered inadequate, citing reimbursement and care costs. They also described using operating data in negotiations and called for policy changes, while the effects on referrals and residents remain uncertain.
Executives from Saber Healthcare Group and Creative Solutions in Healthcare said they have walked away from Medicare Advantage contracts they considered too poorly reimbursed to cover care costs, describing a difficult negotiating dynamic for nursing home operators. Speaking at Skilled Nursing News’ RETHINK conference in Philadelphia, the leaders also called for policy changes as they weighed reimbursement, referrals and pressure on clinical decisions.
Saber President and Founder Bill Weisberg said the company had ended between five and seven contracts over the previous 24 months, including one about two weeks before the conference. He said the contracts did not cover the cost of care. Weisberg argued that accepting lower rates in exchange for expected referrals can fail because plans do not control where patients, families or discharge planners choose to send someone.
Weisberg said Saber uses cost-of-care, length-of-stay, readmission and outcome data in negotiations. In some cases, he said, plans returned to talks after reviewing comparative data, and Saber obtained an increase of $25 to $35 per day. The report does not specify how many contracts received those increases or how broadly the results apply.
Gary Blake, CEO of Creative Solutions in Healthcare, said his company also has no problem leaving a contract and works to explain coverage choices to residents and families. He said supplemental benefits, including grocery cards, can draw attention away from the adequacy of health coverage. Paul Pruitt, Majestic Care’s CEO, described a system in which operators are expected to meet quality and cost measures, but said better performance does not necessarily produce more referrals or profit for providers.
Contract Exits Reshape Negotiations
Contract decisions can affect how nursing homes are paid for caring for residents covered by Medicare Advantage plans. The executives’ accounts suggest some operators see withdrawal as a way to avoid rates they say fall below care costs, while data and renewed negotiations can sometimes produce higher daily payments. Those accounts come from company leaders at one conference; the report does not establish how common these strategies are across the sector.
The discussion also points to a practical issue for residents and families: leaving a plan’s network may affect available facility choices or require a coverage decision. Blake said his company educates families about alternatives, including traditional Medicare. The report does not detail what happened to individual residents after a contract ended, so the consequences will depend on each person’s coverage and circumstances.
Pruitt and Blake connected contract economics to care delivery, saying payment reductions and discharge pressure can conflict with clinicians’ judgments about whether a patient is ready to leave a facility. Their comments describe the providers’ concerns; they do not establish how often such pressure occurs or how particular plans handle discharge decisions.
How Providers Describe Plan Tensions
Medicare Advantage plans are private plans that provide Medicare benefits. In the conference discussion, the operators described a mismatch between the plans’ cost and quality expectations and the financial results they said providers receive. Pruitt said the managed-care model was intended to control health costs, but argued that providers may not see the expected increase in patients or profit when they meet plan requirements.
Weisberg framed negotiations as a choice between accepting a rate and leaving the contract, with the possibility that a plan might return to the table after reviewing cost and outcome data. Blake described a parallel approach: exit contracts when necessary while explaining coverage choices to residents and families. These are the companies’ accounts of their own practices, rather than a sector-wide assessment.
The executives also raised concerns about broader rules and incentives. Blake said Creative Solutions was in ongoing discussions with lawmakers in Washington. Pruitt said he had met with members of the House Ways and Means Committee to discuss provider challenges, including payment reductions or discharge pressure soon after a patient arrives. The report does not identify specific legislative proposals arising from those discussions.
““We will walk away from those contracts, but we also go into them when we negotiate.””
— Bill Weisberg, Saber Healthcare Group president and founder
Effects on Residents Remain Unspecified
The report does not identify the plans involved in Saber’s contract exits, the facilities or residents affected, or the number of residents who had to make new coverage arrangements. It also does not provide plan responses to the executives’ criticism, independent reimbursement comparisons, or data showing whether contract exits changed referral volume, quality outcomes or overall costs.
Weisberg’s account of rate increases after data-backed negotiations does not specify how often plans agreed to higher payments. The conference discussion also leaves open how frequently payment reductions or discharge pressure occur, and how those pressures affect individual clinical decisions. The companies’ descriptions are attributed views, not independently verified measures of the broader market.
Advocacy and Plan Talks Continue
Blake said Creative Solutions was continuing discussions with lawmakers in Washington, while Pruitt described meeting with the House Ways and Means Committee to press for better outcomes for seniors and providers. The executives did not announce a specific policy proposal, legislative timetable or next conference milestone in the report.
For the companies, negotiations over reimbursement and contract participation may continue. The report does not say whether any plans will reopen talks, whether Saber or Creative Solutions expects further exits, or how operators will measure the results for residents. Further details about policy discussions and contract changes would clarify whether the conference concerns lead to concrete changes.
Key Questions
Why did Saber end some Medicare Advantage contracts?
Weisberg said Saber ended five to seven contracts in 24 months because, in the company’s view, they did not cover the cost of care. The report does not name the plans or facilities involved.
Did Saber obtain higher reimbursement in negotiations?
Weisberg said that in some cases plans returned to negotiations after Saber presented operating data, and the company received increases of $25 to $35 per day. He did not state how many agreements included those increases.
What did Creative Solutions say it does when a contract ends?
Blake said the company is willing to leave contracts it considers inadequate and educates residents and families about coverage choices. The report does not describe arrangements for individual residents affected by a contract exit.
What changes are the executives seeking?
Blake and Pruitt called for policy changes and described discussions with lawmakers, including members of the House Ways and Means Committee. They did not announce a specific bill or policy proposal.
Source: rss
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