The Future of Medicare Advantage: Key Strategies for Home Health Success in Managed Care – Webinar Recap

Medicare Advantage (MA) plans now play a crucial role in home health and hospice care. In a recent SimiTree webinar, industry expert Michelle Stone-Smith, MBA, Director of Financial Consulting at SimiTree, shared essential insights on managed care contracting and achieving organizational success in this market. We hope you enjoy this blog that features a thorough webinar recap. To watch the full webinar, visit our webinar page. To receive a personalized one-on-one consultation to discuss your challenges and needs, contact us today.

The Growing Impact of Medicare Advantage

The numbers tell a clear story: Medicare Advantage enrollment has grown by 55% over the past decade, with current data showing that:

  • 99% of Medicare beneficiaries now have access to MA plans
  • 98% of Medicare Advantage enrollees have plans that include prescription drug coverage
  • 50% of MA beneficiaries live on approximately $24,000-$25,000 annually
  • MA plans are particularly popular among diverse populations, with 31% of African American, Asian, and Latino beneficiaries choosing these plans

This substantial growth comes from clear consumer benefits, including:

  • Lower premiums (averaging $17 monthly, with some plans available at no cost)
  • Annual savings of approximately $2,500 in out-of-pocket expenses compared to traditional Medicare
  • Additional benefits such as dental, vision, hearing, and fitness programs

Strategic Preparation for Success in Medicare Advantage

Healthcare organizations must take several critical steps to prepare for successful managed care contracting:

  1. Market Analysis
    • Review primary Medicare Advantage plans in your service area
    • Analyze star ratings to identify potential partnership opportunities
    • Study the competitive field and existing provider networks
  2. Organizational Assessment
    • Calculate accurate cost-per-visit metrics
    • Review current referral patterns
    • Assess operational capabilities and unique value propositions
  3. Contract Planning
    • Learn various contract types and application processes
    • Prepare for potential challenges, including closed networks and lengthy processing times
    • Create strategies for rate negotiations

Keys to Contract Compliance and Management

Success in managed care requires strong systems for:

  • Authorization management and insurance verification
  • Understanding and monitoring contract renewal terms
  • Maintaining billing and claims submission compliance
  • Creating comprehensive payer matrices
  • Building clear communication channels across departments

Current Industry Trends

Several key developments are shaping Medicare Advantage:

  • Growth in home care benefits
  • More focus on supplemental benefits for specific conditions
  • Increased scrutiny of authorization denials and claims processing
  • Changes in prescription drug coverage integration

Key Questions from Industry Leaders

The webinar generated important questions from attendees about managed care challenges. Here are two key questions addressed during the session:

Q: The biggest challenge I have with MA plans is the delegation of risks to the medical groups or MSO for either utilization or payment. How do you handle the complexity of risk delegation in Medicare Advantage plans?

A: “Understanding how MA plans rank and evaluate their providers is crucial,” explained Stone-Smith. “Medicare will only keep providers in their network if they provide positive outcomes, so you need to speak to these outcomes during negotiations.” Key strategies include:

  • Navigating the complexities of Medicare Advantage (MA) groups’ risk delegation requires a thorough understanding of their risk-sharing model. Begin by identifying the covered patient population, the specific disease management programs included, and whether technology, such as telehealth, is integrated into their approach. Additionally, assess how information is shared across the group to facilitate coordinated care.
  • A significant portion of your efforts will involve analyzing data and evaluating outcomes to negotiate terms that cap risk proportionally to the patient population served. Data analysis is integral—clearly define your value proposition and demonstrate how your outcomes align with the population served by these MA groups.
  • Conduct a comprehensive financial review to determine your risk tolerance and ensure alignment with the group’s data. Understanding your partner’s operational and outcome metrics is critical, as you will share in the responsibility for their performance.
  • Given recent trends, some of the largest MA plans are withdrawing from markets due to high risks. Carefully analyze these trends and approach initial negotiations with a focus on identifying risk-sharing structures. Many initial agreements favor one-way (upside-only) risk sharing rather than both upside and downside. Ensure that any agreement avoids disproportionate risk allocation.

Q: What is the best way to negotiate better reimbursement rates, and how much should we expect to be paid?

A: Negotiating Better Reimbursement Rates and Setting Payment Expectations

Success in rate negotiations requires a strategic approach. Stone-Smith emphasized the importance of data-driven decision-making and understanding your value proposition. Key recommendations include:

  1. Create a Strong Value Proposition: Understand how your organization compares to competitors. Highlight unique services and demonstrate the value you bring to the payer network.
  2. Identify Service Gaps in the Market: Look for opportunities to provide services not currently available in your area. For example, consider offering maternal care in regions with high infant mortality or implementing a diabetes management program where one is lacking. These services can position you as an indispensable partner.
  3. Renegotiate at Every Contract Term: Always revisit rates during contract renewal periods. Missing this opportunity means waiting until the next term, potentially years later.
  4. Negotiate Strategically: Don’t accept the first offer. Advocate for better rates and be prepared to compromise—accepting lower rates on less frequently provided services to secure higher rates for those you routinely deliver.
  5. Leverage Data: Use utilization data from in-network providers to inform your strategy. Rates are often based on existing contracts, some of which may be outdated. Expect initial offers to reflect these older benchmarks, especially if contracts haven’t been updated in years.
  6. Understand Cost Structures: Know your costs, including average costs per visit, to establish a clear bottom line. This information is essential for determining acceptable rates and ensuring sustainability.

Keep in mind, payers aim to stay within budget, and there is no universal standard for rate determination. Your preparation, data-driven approach, and clear understanding of market dynamics will be key to achieving favorable terms.

“If your programs demonstrate positive outcomes and you have data to support your value,” Stone-Smith advised, “bring all of that to the table to arm yourself when working with these plans.”

Expert Support for Your Success

Medicare Advantage contracting takes time, expertise, and strategic planning. While the challenges are significant, organizations that prepare effectively and implement proper management systems can succeed in this growing market.

Watch the full webinar recording to learn more about positioning your organization for success in the Medicare Advantage market.

Ready to improve your managed care strategy? Schedule a complimentary consultation with our expert team to discuss your specific needs and challenges.

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