Our Take: Nursing homes that launch provider-led I-SNPs see hospitalizations fall and I-SNP enrollment surge. But the same financial incentives correlate with increased antipsychotic use, hypnotic drug use, and pressure ulcer reporting. The study cannot resolve whether these signals reflect genuine care decline or sicker residents being kept in-house – a distinction regulators will likely press as I-SNP growth accelerates. ▼
As I-SNP enrollment grows, expect CMS and payers to scrutinize antipsychotic and pressure ulcer rates closely, making documentation of clinical rationale more critical than ever.
Nursing Homes as Insurers? The Effect of Provider-Led Institutional Special Needs Plans
The start of a provider-led I-SNP arrangement led to a 17.0 percentage point increase in I-SNP enrollment among facility residents within 4 years relative to control nursing homes. The study also found that the start of a provider-led I-SNP arrangement significantly decreased hospitalizations (−1.0 pp), increased the use of antipsychotic (0.4 pp) and hypnotic drugs (0.3 pp), and reporting of pressure ulcers (0.4 pp). These results suggest that this form of risk bearing may successfully reduce utilization (e.g., hospitalizations), but with unclear implications for quality as increased use of sedating drugs and rates of pressure ulcers could either reflect poorer care or retention of sicker patients due to lower hospitalization rates.
— Health Services Research, November 9, 2025
Chen, Amanda C. et al. “Nursing Homes as Insurers? The Effect of Provider-Led Institutional Special Needs Plans.” Health Services Research, 9 Nov. 2025. https://onlinelibrary.wiley.com/doi/10.1111/1475-6773.70067.
Provider-Led I-SNPs Reduce Hospitalizations, but Other Clinical Results Mixed
“However, such stronger incentives to reduce costs may also result in stinting and worse patient outcomes. For example, nursing homes may overprescribe antipsychotic or hypnotic drugs to sedate residents with dementia to limit hospitalizations for symptoms of delirium or agitation. This is a particular concern for residents who may be unable to detect poor care or advocate for themselves if they do.”
— McKnight’s Long-Term Care News, November 11, 2025
