Home Health Agencies Give Cold Shoulder to Medi-Cal Patients

Home health agencies in the nation’s most populous state increasingly are avoiding Medicaid patients, highlighting that a push to increase home care across the nation could encounter obstacles.

In 2002, 22% of home health agencies in California were not treating patients on Medi-Cal, the state’s Medicaid program. As of 2013, that number had risen to 56%, according to an analysis of state data undertaken by Leavitt Partners LLC, a Utah-based business management consultancy.

The trend has occurred even as the total number of Medi-Cal certified HHAs increased from 600 to more than 1,200, and home health visits increased from 8.3 million to 13.7 million, the analysis determined.


The upshot: HHAs are preferring private pay or other types of patients to those on Medi-Cal. This was supported by a telephone poll conducted by Leavitt Partners in May, with responses from 61% of active agencies.

Among Medi-Cal certified agencies, 21% said they were not accepting new Medi-Cal patients. Among agencies not certified for Medi-Cal, only 7% said they were not accepting new patients.

Source: Leavitt Partners LLC
Source: Leavitt Partners LLC

And when asked how quickly they could accept a hypothetical pediatric Medi-Cal patient with high needs, 28% said they would be able to accept the patient immediately. When asked if they could accept the a privately insured patient with the same hypothetical needs, 50% of agencies reported being able to immediately accept the patient.


Indeed, the pediatric population seems to be in a particular bind, as both the percentage of agencies offering pediatric services as well as the absolute number of agencies offering pediatric declined between 2002 and 2013.

A number of factors likely are driving this trend, according to the report. For instance, increasing demand for skilled care coupled with a shortage of qualified nurses has put steep upward pressure on nurses’ wages. Agencies that focus on Medi-Cal populations might therefore face staffing problems that compromise their ability to grow their patient rolls, while higher-paying agencies with a private insurance focus can attract staff and tap into growing demand for care.

The situation in California could serve as a warning, given that national health care policy has moved toward payment models meant to encourage more care in low-cost settings, including the home. If Medicaid rates are not adequate, it could undermine this effort.

“Medi-Cal patients will experience increasing wait times for higher acuity conditions, potentially leading patients to seek care in other settings such as acute care hospitals,” the report authors write. “This final conclusion should be the subject of further research. It is plausible that reimbursement rate stagnation in the presence of care access gaps could actually increase total expenditures as services needed are diverted to higher acuity, inpatient settings that come with much higher costs.”

The research was funded by Maxim Healthcare Services, a home care, companion care, medical staffing and wellness services provider based in Chicago.

Written by Tim Mullaney

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