Starting next year, Medicare Advantage (MA) plans will be able to cover a bigger slice of the in-home care pie, including non-skilled personal care. Industry execs see the expansion of home care services under MA as a potential proving ground for personal care services and a positive step toward a broader Medicare rollout down the road, but skeptics worry the focus on MA is flawed and may leave some older adults shut out.
“Once again, these additional or supplemental benefits are being offered in Medicare Advantage,” Medicare Rights Center President Joe Baker told Home Health Care News. “They’re not being offered in the traditional Medicare program—where still the majority of beneficiaries are enrolled—and we really think there should be an even playing field so people have a real choice.”
The Centers for Medicare & Medicaid Services (CMS) officially made the move in April to allow non-skilled in-home services as a supplemental benefit for MA plans in 2019.
Through the Medicare Advantage program, the government gives federal dollars to private insurers so they can offer MA plans covering standard Medicare benefits, plus a number of extras, such as vision or dental.
Home care executives from several providers have widely acknowledged the Medicare Rights Center’s concerns, but believe changes from CMS to the MA program will ultimately open the door for an even broader expansion of home- and community-based services within the larger health care delivery system once policymakers have had a chance to analyze future cost savings.
“Advocates are right to be concerned about where this is heading, but our hope is that the stated outcome of the policy change, to demonstrate reductions in other Medicare benefit categories that more than offset the cost of supplemental health benefits, will be realized and quantified,” Darby Anderson, executive vice president and chief development officer for Addus HomeCare Corporation (Nasdaq: ADUS), told HHCN.
In addition to his role at Frisco, Texas-based Addus, Anderson serves as vice chairman for the Partnership for Medicaid Home-Based Care’s board of directors.
Addus provides personal care, home health and hospice services to more than 39,000 people across 25 states.
In some cases, Medicaid does pay for the type of personal care services that MA plans will now be allowed to cover. Anderson sees this as a golden opportunity to put a more precise dollar figure on how this type of care can reduce Medicare costs by lessening the need for more medically intensive care.
“Providers in Medicaid have known or felt for years that Medicaid services generate significant Medicare savings, but we have never had the data to prove it or [gain] a seat at the table to improve it through the coordination or care,” Anderson said. “The policy change provides the opportunity to do both, which can then be used to make a compelling case in Congress for application of the policy changes to the Medicare [fee-for-service] population and provide data the [Congressional Budget Office] can use to score savings.”
Executives from Addison, Texas-based Elara Caring and San Francisco-based Honor made similar remarks to HHCN.
“It’s a step towards progress in enabling more older Americans to live independently at home with the assistance of professional caregivers,” Nita Sommers, president of the Honor Care Network, told HHCN. “However, we do agree that the ideal long-term solution is that all older adults should have greater support and access to home care services.”
Honor is a private duty home care provider and a technology and operations partner for a growing network of in-home care agencies. In May, the company announced it had raised $50 million in funding, bringing its total funding to $115 million since launching.
Personal care under MA ‘the right move,’ says Elara Caring CEO
Elara Caring—formed after a three-way merger between Great Lakes Caring, National Home Health Care and Jordan Health Services—provides skilled home health, personal care and hospice services to more than 65,000 patients daily across 16 states.
The success of the enterprise’s personal care division foreshadows the potential benefits of CMS’ MA move, Elara Caring CEO Scott Herman told HHCN.
“We’ve found that through our personal care division, where we see about 30,000 patients every day, that we’re able to have high levels of contact with those patients who are chronically ill and have multiple medical conditions, which are, of course, America’s most vulnerable and costly population of patients,” Herman said. “By identifying patients that are about to have a problem, creating interventions in the home-based continuum, we’ve driven 30-day all-cause hospitalization rates down to 4.8% on over 50,000 patients against the national average for seniors of 20% and the chronically ill population of 28%.”
Elara Caring is able to keep patients at home and out of hospitals at an average cost of about $40 per day, compared to skilled nursing cost frequently near $500 per day. The effectiveness of its personal care programs has led to a doubling of length of stay for chronically ill patients at home, going from about two-and-a-half years to an average of more than five years.
That’s appealing for MA plans because the longer patients are in personal care programs, the longer they remain in an insurer’s per member, per month calculation.
“It’s the ability to demonstrate lower total costs of care, those higher quality outcomes, extend those lengths of stay within programs and keep patients in plans and on track that are very, very appealing to managed care players in the advantage world,” Herman said. “Today, Medicare Advantage payers don’t really understand how personal care is going to impact [them] and if they really want to do it, but with demonstration of our data, our cases are very compelling in being able to show them why they want to do it and how.”
To that point, Elara Caring has already made multiple partnership focused on data, he said. It’s also in contract discussions with “some large vendors” and “large-scale, national players” to help Elara Caring do even more data “dives and digs,” he said.
Elara Caring is also currently in talks with multiple payers, integrated health care deliver systems and accountable care organizations across its continuum.
About 62% of patients are dual eligibles at any given time in Elara Caring’s personal care population. About 38% of the enterprise’s overall business currently comes from Medicare Advantage.
“I believe the insertion of personal care into Medicare Advantage and the building of a true home-based continuum is actually the right move,” Herman said. “I think CMS is headed down the right path.”
Medicare Rights Center preaches equal innovation, highlights concerns
About one out of every three people with Medicare is enrolled in a Medicare Advantage plan, according to data from the Kaiser Family Foundation.
Analysts foresee that jumping to about two out of every five people within the next few years.
Nationally, the MA market is concentrated among a small number of firms, including UnitedHealthcare, Humana (NYSE: HUM), Blue Cross Blue Shield affiliates and others. The role of private insurance companies is related to another of the Medicare Rights Center’s concerns, according to Baker, as companies may decide to shy away from sicker or more frail populations to avoid risk.
“I think plans might be concerned about added risk selection—you can imagine a population that would be attracted to a plan [offering home care services] would be a sicker population or a population that might already need those services,” Baker said. “Plans might not necessarily offer that because they don’t want to attract those patients.”
MA insurers sometimes have a relatively limited network of providers, which could also become problematic in certain circumstances, he said.
Additionally, some patients struggle to choose the best plan for their needs because of confusion in MA marketing. As a result, they then find themselves effectively locked into Medicare Advantage because there are few federal rules that protect access to Medigap, according to Baker.
HHCN isn’t the only publication where Baker has outlined his concerns.
The New York Times published an opinion piece from the Medicare Rights Center president last month.
“I don’t want to give the idea that we’re against supplemental benefits being offered,” Baker said. “We’re concerned that if there’s innovation occurring in one product line, it should occur in all of them, meaning there should be [home care] flexibility in traditional Medicare as well.”
The Medicare Rights Center does not expect to see many home care developments in MA plans in 2019.
Written by Robert Holly