Approximately half of all Medicare beneficiaries have elected Medicare Advantage coverage in lieu of the traditional Fee-for-Service (“FFS”) program. MA represents the greatest financial threat to Skilled Nursing Facilities because MA utilization and payment rates lag far behind FFS, and FFS is Skilled Nursing’s most important pay class.
This document quantifies the financial impact on the SNF sector.
Medicare Advantage: $NF Impact
• Lower SNF utilization and rates from MA relative to FFS is among the greatest threats to SNF reimbursement.
• Every 1% MA “Growth Share” (e.g., 48% penetration to 49% nationally) decreases SNF revenue by $275 million annually:
Medicare Attrition Rate (“MAR”)
The Medicare Attrition Rate tells us how rapidly Medicare Advantage is growing, relative to the decline in FFS enrollment. ZHSG & z-INTEL will update the MAR using a 12-month rolling average starting in 2024.
Lower values are bad for SNFs. For the 12 months ended August 31, 2023, the number of total Medicare beneficiaries grew by 1.35M, broken down as follows:
How to interpret the Medicare Attrition Rate:
The MAR is (0.46). In other words, for every 100 new MA elections, there were 46 fewer beneficiaries enrolled in FFS.
MedicareAttritionRateBrief
Marc Zimmet
Medicare Attrition Rate Brief
Approximately half of all Medicare beneficiaries have elected Medicare Advantage coverage in lieu of the traditional Fee-for-Service (“FFS”) program. MA represents the greatest financial threat to Skilled Nursing Facilities because MA utilization and payment rates lag far behind FFS, and FFS is Skilled Nursing’s most important pay class.
This document quantifies the financial impact on the SNF sector.
Medicare Advantage: $NF Impact
• Lower SNF utilization and rates from MA relative to FFS is among the greatest threats to SNF reimbursement.
• Every 1% MA “Growth Share” (e.g., 48% penetration to 49% nationally) decreases SNF revenue by $275 million annually:
Medicare Attrition Rate (“MAR”)
The Medicare Attrition Rate tells us how rapidly Medicare Advantage is growing, relative to the decline in FFS enrollment. ZHSG & z-INTEL will update the MAR using a 12-month rolling average starting in 2024.
Lower values are bad for SNFs. For the 12 months ended August 31, 2023, the number of total Medicare beneficiaries grew by 1.35M, broken down as follows:
The MAR is (0.46). In other words, for every 100 new MA elections, there were 46 fewer beneficiaries enrolled in FFS.