Medicare Advantage: A Growing Challenge for Home Health Agencies

Are Medicare Advantage plans taking over home health? The answer to this question is not so easy, but it feels like they are to the home health industry. Medicare Advantage (MA) plans have rapidly gained popularity, with over half of Medicare beneficiaries now enrolled. This significant shift has presented new challenges for home health agencies (HHAs). To thrive in this evolving landscape, HHAs must understand the potential for revenue loss and implement effective strategies to mitigate risks.

The Impact of Medicare Advantage on Home Health Revenue

The increasing dominance of Medicare Advantage plans has profoundly impacted home health reimbursement. To avoid financial setbacks, home health agencies must navigate complex contractual terms, stringent billing requirements, and varying reimbursement rates.

1. Understand Contractual Terms
   • Negotiation: Ensure you thoroughly understand and negotiate the terms of your contracts with Medicare Advantage plans. Pay special attention to reimbursement rates and any specific requirements these plans might have.
   • Compliance: Adhering to the specific billing and documentation requirements of each MA plan is crucial to ensure timely and accurate reimbursements.
2. Implement Strong Billing Practices
   • Accurate Coding: Use the correct coding for services rendered. Mistakes in coding can lead to denials and delays in payments.
   • Timely Submissions: Submit claims promptly to avoid delays in reimbursement. Late submissions can sometimes result in outright denials.
   • Error Tracking: Monitor claims for errors or rejections and address them immediately to prevent revenue loss.
3. Enhance Documentation
   • Detailed Records: Maintain comprehensive and accurate patient records. Detailed documentation supports claims and helps in quick resolution of any disputes.
   • Compliance with Guidelines: Ensure that documentation meets the specific guidelines set by Medicare Advantage plans.
4. Invest in Training
   • Staff Training: Regularly train your billing and administrative staff on the latest Medicare Advantage requirements and updates.
   • Stay Updated: Keep abreast of any changes in Medicare Advantage policies and adjust your practices accordingly.
5. Utilize Billing Partner
   • Billing Partner: Contract with a reliable home health billing service that can help streamline the billing process and reduce errors.
   • Data Analytics: Use data analytics to track claim statuses, identify trends and opportunities, and predict potential issues before they become significant problems.
6. Maintain Open Communication
   • Plan Representatives: Establish good communication channels with representatives from Medicare Advantage plans. This can help quickly resolve any issues that arise.
   • Feedback Loop: Provide feedback to insurers on any issues encountered and work collaboratively to find solutions.
   • Patient Communication: Educate patients about their Medicare Advantage benefits and any out-of-pocket costs they might incur.
7. Monitor Financial Performance
   • Regular Audits: Conduct regular financial audits to identify and rectify discrepancies in billing and reimbursement.
   • Financial Metrics: Track vital financial metrics to ensure effective revenue cycle management processes.

Wondering the difference between Medicare and Medicare Advantage?

Understanding the Medicare Advantage Landscape

To effectively address the challenges posed by Medicare Advantage, HHAs must gain a comprehensive understanding of the market. You should know some statistics on Medicare Advantage in the home health industry.

• Enrollment Trends: Over 50% of Medicare beneficiaries are enrolled in Medicare Advantage plans, a significant increase from previous years. This trend is expected to continue, with the Medicare Advantage market growing by 7-9% annually. The Centers for Medicare & Medicaid Services (CMS) reports that over 30 million people are enrolled in MA plans. Private insurance companies offer these plans and typically provide additional benefits beyond traditional Medicare, such as vision, dental, and hearing coverage. 
• Market Concentration: A few firms dominate the Medicare Advantage market, with UnitedHealthcare and Humana accounting for nearly half of all enrollees. This concentration can impact the bargaining power of home health agencies.
• Geographic Variations: Enrollment in Medicare Advantage plans varies widely across states and counties, with some areas having over 60% of beneficiaries enrolled in these plans. For instance, states like Alabama, Hawaii, and Michigan have high penetration rates, while others like South Dakota and Alaska have much lower rates.

By analyzing these trends, agencies can tailor their strategies to specific market conditions and optimize their operations.

Critical Considerations for Home Health Agencies

• Medicare Advantage Plans Explained: Provide a clear overview of MA plans, including enrollment, coverage, and extra benefits.
• Patient Communication: Emphasize educating patients about their MA plan options and potential out-of-pocket costs.
• Compliance and Documentation: Highlight the critical role of accurate and complete documentation in preventing claim denials and ensuring timely reimbursement.
• Financial Management: Stress the significance of financial monitoring and analysis for identifying revenue loss risks.

FAQs on Medicare Advantage in home health

• • Does Medicare cover home healthcare?
    • Medicare Part A typically covers home health care services if certain conditions are met, such as the need for skilled nursing care or therapy. Read more on what’s covered and what’s not.
  • Which Medicare Advantage plans cover home health care?
    • Most Medicare Advantage plans cover home health care, but specific coverage details can vary. It's essential to check with the individual plan. Learn more about rules Medicare plans must follow.
  • How long will Medicare pay for home health care?
    • Medicare coverage for home health care is typically limited to a specific period and requires ongoing assessment of the patient's needs.
  • What is the right payer to bill between Medicare and Medicare Advantage?
    • Watch our video now to learn the answer to this question directly from Lynn Labarta, SimiTree Vice President of Post-Acute Revenue Cycle Management, and keep reading for more information. Our PDF, “Differences Between Original Medicare and Medicare Advantage," will guide you in billing the right insurance and speeding up your payments. Submit your email, and we will send it to your inbox immediately.  
  • What is home health care?
    • Home health care provides medical services and support in a patient's home, allowing them to recover or manage chronic conditions comfortably.
  • What services are covered in Medicare & home health care?
    • Medicare covers a range of home health services, including skilled nursing care, physical therapy, occupational therapy, speech-language pathology, and medical social services.
  • Who qualifies for Medicare? Who’s eligible for home health care?

• • • To qualify for Medicare, individuals must be 65 or older, have specific disabilities, or be diagnosed with End-Stage Renal Disease (ESRD). Eligibility for home health care depends on specific medical needs and meeting certain criteria. Learn more on Medicare & home health care.

How SimiTree Can Help

We know that you are committed to providing the best possible care to your clients and understanding the healthcare options available to them is a crucial part of that. To learn more about our home health and hospice revenue cycle management solutions and to get in touch with our experts, visit our website or call us today at 1.800.949.0388. For a consultation, fill out a contact form below.

Want to learn more? 

Read more about the rise of Medicare Advantage.

Check out our article on 12 Tips for Negotiating Medicare Advantage Contracts.

Watch these helpful webinars on our Webinars page under the Consulting tab:

• “How to Win the Medicare Advantage Market” presented by Rob Simione, SimiTree SVP, Consulting, and Jonathan Dickinson, Senior Manager, Financial Consulting  
• “Unlocking the Potential of Medicare Advantage: A Webinar for Home Health Financial Growth” presented by Brian Harris, Vice President of Financial Consulting