As the number of Medicare Advantage beneficiaries escalates nationwide, forward-thinking home health agencies are polishing their images, touting strengths in patient outcomes, star ratings and lower rehospitalization rates, and working to secure a more visible role on the health care continuum in their communities.
The industry spit shine is part of an effort to establish value and increase negotiating power with insurance companies offering Medicare Advantage, an alternative to traditional Medicare plans. Enrollment in MA topped 26 million in 2021, and the Better Medicare Alliance, an MA advocacy group, estimates MA enrollment will account for more than 50 percent of all Medicare enrollment by 2030.
SimiTree experts anticipate a spate of new specialty care programs and partnerships as agencies hone and highlight their strengths in particular areas of care and, in some cases, add non-medical services such as nutrition or transportation services to snag future in-network contracts with major insurance companies
But waiting until those networks are fully built may be too late, cautions SimiTree Financial Consulting Director Brian Harris.
“If you’re not already looking in that direction, you’re going to be behind the 8-ball,” Harris said. “Especially in areas like Texas or Florida where there is heavy saturation of home care, there is a concern that insurance companies could close their networks and agencies could find themselves shut out.”
Consider an early, phased-in approach
Harris spent much of 2021 helping agencies position themselves for stronger MA bargaining power and delivering numerous presentations on how to negotiate stronger contracts.
Key elements for success under increasing numbers of MA plans are early participation, the ability to clearly demonstrate an agency’s value and performance, and contract negotiation skills, he said.
“Being able to demonstrate the value-add your agency brings to MA is essential,” Harris said. “As an example, if your cardiac program has great outcomes compared to your competition, you have negotiating power. Look for where you’re getting better results on the health care continuum and be prepared to show what you can deliver.”
Harris recommends agencies become familiar with MA plans operating within their region to find the best fit for their strengths, and approach insurance companies now about contracting.
“It may be worth it initially to partner with a couple of plans to find out how MA works,” Harris said. “It’s a good idea to get those relationships started and get a seat at the table. It’s also a good idea to consider a phased-in approach, starting with plans that will give you more favorable contracts and rates.”
See related article, “12 Tips for Managing MA Contracts”
Skilled and non-skilled services fuel MA
SimiTree’s industry-leading analytics and benchmarking tool, The Financial Monitor, tracked noticeable MA growth in agency revenue throughout 2021, increasing 8 percent over the first three quarters of the year. Fourth quarter figures from The Financial Monitor have not been made available to the public yet.
See related article, “MA Revenue on the Rise”
Fueling the appeal of MA to beneficiaries is an array of plans offering extra benefits like vision, hearing, dental services, and prescription drug coverage in addition to coverage of all traditional Medicare services.
MA plans can include in-home supportive services, caregiver support, home-based palliative care, adult day care and therapeutic massage.
Some MA plans also cover non-skilled services like meals and nutrition support, help with transportation, home cleaning services, pest control, social needs or structural home modifications needed for patient safety. These types of non-medical support services for chronically ill patients are not covered by traditional Medicare and were not covered by any Medicare plan until they were approved for the Medicare Advantage market in 2018 and 2019.
A smorgasbord of MA plans
Not every MA plan offers all the bells and whistles. Each MA plan is different, depending on the Medicare Advantage Organization (MAO) offering it. Currently there are 34 different MAOs, all with different plans. The most recent report from the Better Medicare Alliance indicates there were some 3,550 active plans in 2021.
Geography also plays a role in which MA plans are offered. MA plans aren’t yet available in all states, and in states where an MAO does offer an MA plan, the plan may be available as a pilot program in a limited territory rather than the entire state.
“With so many different plans, and so many different areas where plans are available, agencies are going to need to stay on top of who is offering what in their region,” said Jonathan Dickinson, SimiTree Senior Manager, Financial Consulting.
Coverage maps should continue to fill in quickly over the next couple of years, Dickinson said.
“This is all new, and there’s a learning curve for the whole industry, but Medicare Advantage is going to play a large role in the future of home health,” Dickinson said. “Agencies need to get on board now to start building their roles in the future with it so that they won’t miss opportunities.”
Home health role likely to grow
MA plans already have strong financial incentives to use home health services strategically and efficiently. Services in the home can be less costly than acute care and reduce the need for hospital readmission.
Proposed legislation known as the Choose Home Care Act of 2021 is expected to further accelerate the use of home health by MA beneficiaries.
Now under committee review in U.S. Congress, the proposed Act would establish a 30-day supplement to the existing home health benefit and cover expanded skilled nursing, therapy, personal care, telehealth services and more for approved Medicare beneficiaries with higher acuity health care needs who choose home-based care over facility care.
“The Choose Home Care Act, if it is approved, should really increase the need for home health services under MA plans,” Harris said.
VBID brings hospice into MA
MA is edging strongly into the hospice arena, too. In January, the Center for Medicare and Medicaid Services (CMS) began testing a hospice component of the Value-Based Insurance Design (VBID) model.
VBID is a model CMS relies on to test the impact of supplemental benefits on select groups of chronically ill patients and socioeconomic groups. Since 2017, a growing number of states have been included in VBID testing models for diabetes, congestive heart failure, hypertension, rheumatoid arthritis, dementia, and many other chronic conditions.
For plan year 2022, 13 of the 34 MAOs are participating in the hospice benefit component under VBID in 49 states, the District of Columbia and Puerto Rico.
“CMS is now tracking hospice data from VBID and has said it will make a decision in 2024 about moving forward with the plan, and/or making any changes,” said Maureen Kelleher, SimiTree Senior Manager, Clinical Consulting.
Hospice agencies are not required to contract with an MAO under VBID, and CMS is requiring MAOs to pay non-contracted agencies the equivalent of original Medicare rates for any Medicare-covered hospice care.
“But it’s not really a question of whether hospices are going to participate in VBID or not,” Kelleher said. “They still have to determine when the patient is admitted whether that patient is part of a VBID MA plan, and if so, the hospice has to follow the VBID rules. So the question really becomes whether to contract with the MAO or not.”
Like Harris and Dickinson, Kelleher sees an advantage in contracting with an MAO for services now, establishing relationships and value. “Later on, if patients have an in-network plan and you’re not in it, you won’t be able to see those patients. This is the time to make sure you’re part of the network, unless a hospice chooses to work solely with traditional FFS Medicare.”
Operational concerns
The full impact of MA plans on staffing and operations at home health and hospice agencies is still being sorted out.
There is concern that an increased workload in claims processing and quality review will create a need for additional full-time employees in an era of staffing shortages.
At intake, agencies must determine whether a patient is covered by MA, and which services will be covered by the beneficiary’s plan. Different sets of rules may apply to multiple patients. Although some MA plans offer a portal to streamline the intake process, others don’t.
“Higher denial rates under MA plans, especially in the beginning, and inconsistent adoption of traditional Medicare regulations are part of the growing pains to be expected,” Harris said.
Smaller agencies in particular may be impacted by operational challenges, SimiTree consultants say, because smaller agencies generally lack the staff to shuffle around to handle volume during times of transition.
“We’re hearing from hospices that there is much more paperwork involved in VBID,” Kelleher said. As an example, hospices serving a patient with an MA plan under VBID must send all notices and claims to both the participating MAO and their Medicare administrator contractor (MAC). Although the MAO will process the payment, the MAC will process claims for informational purposes so that CMS can track data.
Many operational questions remain unanswered at this point, and SimiTree consultants are monitoring agency operations closely.
“Will new operational processes be needed for simultaneous claims processing? Will different billing expertise needed for both? Will different plans require different documentation to support eligibility, and how often will they require it? There are also some logistics questions to be addressed about an agency’s EMR being set up to efficiently handle all of it,” Kelleher said.
“And at this point we honestly don’t have all the answers. It’s going to come into better focus for us this year as the VBID model is tested for hospice, as home health agencies continue to serve more MA beneficiaries, and as we collect more information,” she said.
Shift and pivot
The takeaway message from SimiTree consultants is that agencies shouldn’t delay setting up their operational processes to accommodate growing MA enrollment, and should focus on establishing the value they bring to MAOs.
“When we talk about MA plans accounting for more than half of our revenue by 2030, it sounds like there’s still plenty of time to adapt,” Dickinson said.
“But it’s really only eight years away. The number of MA plans is already increasing, and that number will continue to increase fast. Home health and hospice agencies need to shift and pivot now.”
SimiTree can help
To better help agencies address anticipated MA billing problems as they arise, SimiTree expanded its revenue cycle management team late last year with the acquisition of Imark Billing.
“We’re ready for an increasing volume of work in outsourced billing and collections, insurance authorization and document management due in some measure to MA growth,” said SimiTree Principal Jess Stover, who oversees billing, collections and revenue cycle management. “We have the resources in place to deploy quickly, as soon as an agency identifies that it’s going to need help.”
Financial and operational consultants are also ready to work with agencies to make certain intake processes are set up to efficiently address the increasing MA workload.
“It's definitely going to take strong intake processes with attention to authorization,” Dickinson said. “We can work with agencies to set up their intake procedures, determine whether and how they may need to move team members around, and show them where to strengthen communication processes. Good communication within an organization is going to be key to serving patients under MA plans.”
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