Why Medicare Advantage May Be a Small Opportunity for Home Care

Home care providers are juiced up over the promise of Medicare Advantage plans taking on non-skilled in-home supports as a supplemental benefit, but the opportunity may be smaller than some think.

Not only will home care providers likely not see significant changes to MA plans in 2019, but the next few years could be a slow burn, according to Anne Tumlinson,  founder of Anne Tumlinson Innovations, a health care consulting company. Tumlinson previously led Medicaid oversight at the Office of Budget and Management, and founded the post-acute and long-term care consulting practice at Avalere Health.

For home care companies, proving the value—and financial savings—of their services will be critical. Thinking like a payer, rather than a provider, will also likely help home care players make inroads in MA in the years ahead.

Enrollment needs

One of the biggest motivations for MA plans to add supplemental benefits is enrollment, Tumlinson told Home Health Care News.

As MA plans look to attract enrollees, balancing supplemental benefits and costs will be a very thoughtful process. MA insurers have to submit their health plan bids to the government to take part in the program, and they must meet certain requirements and limits of coverage in addition to pricing their services. A costly home care benefit could make it difficult to make the math work on those bids, as it would mean that beneficiary premiums would be higher.

“The No. 1 thing to health plans is attracting enrollees, more than saving money,” Tumlinson  told Home Health Care News. “But in order to attract enrollees, [they] have to have a low bid. If [plans] shove a bunch of supplemental benefits that are new and untested that actuaries don’t know how to price, that’s going to pop up your bid.”

To get non-skilled home care more squarely situated as a MA supplemental benefits, the cost savings have to be there.

This approach also means providers are responsible for proving the value of home care. In other words, they need to make their case in a language that health plans will understand—with data.

“If you have evidence—believable and credible evidence—that your intervention is in fact reducing hospitalizations and is a net savings, then health plans definitely want to know about that,” Tumlinson said. “The best thing this industry could do right now is commission massive studies on savings [that show] how using home care, meals, transportation, technology—all the things we know contribute to potentially improving health outcomes—actually reduce the use of the emergency room and inpatient hospitalizations. That’s it. That’s the magic.”

If providers don’t have the data to prove their value, they could still potentially get into contracts with MA plans by taking on risk, according to Tumlinson. Actuaries, which score MA plan bids and costs, can analyze costs to the health plan by adjusting the risk that a home care provider or other partner will take on.

“That’s a strategy [home care] could use tomorrow,” Tumlinson said of approaching providers with the option of taking on risk for adding in-home care services benefits.

2020 vision

Home care providers should also be aware there is a bit of a waiting period ahead before non-skilled supports are truly a benefit in MA plans. While the supplemental benefits are expanded for 2019, plans are more likely to adopt them for 2020 and later.

“We have some time because there is no way any health plan is going to submit a new benefit package for the 2019 enrollment year, which starts this fall,” Tumlinson  said. “None of [the plans] will have this supplemental benefits palace in place—it’s too late.”

For the first few years, managed care organizations are also likely to start slowly adding in home care benefits in small pilots, according to Tumlinson.

Some organizations that have already blurred the line between provider and payer, such as Humana (NYSE: HUM), are adding more MA benefits that directly address social determinants of health and needs in the home. However, Humana may be the exception, as most health plans aren’t taking on the same mentality with the same vigor.

“I think the health plans are going to start experimenting with [more supplemental benefits], but they’re not [yet], with the exception of Humana,” Tumlinson said.

Still, for many MA plans and managed care organizations, the addition of home care as a benefit will likely not happen all at once in 2019, or even in 2020, though there may be some opportunity as organizations come to understand the value-add of home care.

“This is just the beginning of a very slow burn to shift the Medicare program, and if we think there is some incredible strategic opportunity, that is unlikely,” Tumlinson said.”It’s going to be a process of education and a process of convincing actuaries. There are huge operational challenges. … This is a small opportunity. It’s good news, but it’s a small opportunity, not a big opportunity.”

Written by Amy Baxter

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Amy Baxter
Assistant Editor at Home Health Care News
When not writing about all things home health, Amy fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."

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