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Life Plan Communities and Value-Based Payments

This week, our In Focus section reviews value-based payment (VBP) opportunities for long-term care providers. HMA Principal Dana McHugh authored the article, “Life Plan Communities and Value-Based Payments: Aligning Incentives So Everyone Benefits”, for LeadingAge national magazine, discussing how life plan communities can establish value-based payment arrangements with managed care organizations (MCOs) to maximize value and add additional revenue streams.

Life plan communities, also known as continuing care retirement communities, offer independent living, assisted living care, and skilled nursing care to seniors. These communities have existing infrastructures and services in place that are attractive to MCOs. Through care management, home health, hospice, nursing, and access to primary care, the communities and MCOs can apply value-based payment to these services that address social determinants of health.

Payment models that facilitate the shift to value-based payment can include Medicare Advantage, Accountable Care Organizations, Bundled and Episodic Payments, and Primary Care First. Medicare Advantage plans have had value-based payment arrangements with nursing home providers for years. On average, 35 percent of older Americans choose enrollment in a Medicare Advantage plan. Many of these arrangements offer incentives or financial bonuses in return for improved quality outcomes and quality indicator collection. States with Medicaid managed long-term care are also encouraging MCOs to establish value-based payment arrangements.


Value-based payment arrangements can provide life plan community, managed care organization, and residents a variety of benefits. One example is for life plan communities to offer full-service primary care. MCOs can provide high-quality care, which can then positively affect the Medicare Advantage plan star rating and improve quality outcomes. Life plan communities will gain an additional revenue stream, increased resident satisfaction, and the opportunity to market the community to clinic patrons who do not live on site.

Also, life plan communities with an affordable housing component can adopt a housing plus services model with the goal of improving the health of their members through services addressing the social determinants of health. Through this model, residents will participate in regularly scheduled quality care and real-time care management that improves quality outcomes and member satisfaction. They can gain services such as a scheduled on-site nurse, therapies, hospice, palliative care, Meals-on-Wheels, home health, care management, and skilled nursing. MCOs would receive added value and quality indicators and the community would receive added value and an additional revenue stream.

For more information, please contact Dana McHugh at [email protected].

Link to Article