The baby boomer generation is a demographic of special interest to assisted living providers. It has forced assisted living providers to consider Medicaid as a potential growth channel. Changes in current Medicaid policy portray a mixed image about the program’s direction and if there’ll be attractive opportunities for assisted living. There are speculations that Medicaid may help unlock middle-market senior living.
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How Does The Middle-Market Senior Living Program Work?
The legislature of the United States, on February 27, 2021, passed a stimulus package bill worth $1.9T. The bill includes an increase of 73.5 percent rate to percentages related to medical support at the Federal level. It enables states to improve their services amid the pandemic. This provision can prove helpful in assisting providers of living areas with reimbursements under Medicaid as a channel of generating revenue if it survives budget reconciliation. However, it depends on organizations that manage such affairs called MCOs, who liaise with regions for Medicaid reimbursement. Some of these MCOs are suggesting cutting rates of reimbursement to providers of assisted living houses.
Rate Cutting As An Alternative
Medicaid doesn’t always cover the entire expenses of catering for seniors staying in such assisted living areas like nursing homes. States mostly use waivers that allow them to help providers of living settlements for community and home-based services. These waivers allow states to design services for a specific target group. States also have permission to establish added criteria for their target population in the waiver. States can undertake a wide range of services together under the home-based services. Cutting rates gives providers an easy way out. As a result of covid-19, the MCO Medicaid market reported lesser growth margins in 2020. Some groups have indicated slashing reimbursement rates to providers because of drop-in utilization of MCOs for healthcare during the pandemic.
Effects Of The MCO Policies
States that outsource MCOs don’t employ reimbursement standards uniform rate, which is often confusing for regional providers who offer community and home-based care. MCOs emphasize wellness in the long term. Insurers have not taken the opportunity to open assisted living to lower-income seniors who will need long-term care once their conditions become worse to the point where they can’t take assisted living.
Providers who seek Medicaid reimbursement can contract the state directly. Providers have finally been able to access general distribution federal funding after months of lobbying. FMAP rates increase in the stimulus package is a positive sign for improvement in any organization that handles community and home-based services. The increase in the FMAP rate may not be sufficient for MCOs to prevent planned cuts.
There’s a ray of hope for situations to take a positive turn in terms of middle-market senior living. For more information on middle-market senior living, contact ALF For Sale, the best housing provider in Florida today.