New Value-Based Agreement with AmeriHealth Caritas Is Bayada’s Largest Yet

Over the past few years, Bayada Home Health Care has entered into several value-based agreements with managed care organization partners, reflective of the U.S. health care system’s broader shift from quantity to quality.

The Moorestown, New Jersey-based home health provider announced its latest on Thursday: a new value-based agreement with AmeriHealth Caritas built on reducing potentially preventable hospital admissions, re-admissions and emergency room visits. The new value-based agreement is particularly “unique” and “exciting,” Bayada CEO David Baiada told Home Health Care News, because it is by far the provider’s largest.

“It’s the only one that spans over a large geographic region and encompasses multiple specialty practices, including home health, hospice, Medicaid personal care and pediatric private-duty nursing,” Baiada said. “These are natural partnerships for us — they incentivize us for work that is already a top priority within our organization, pushing us toward continued improvement and finding efficiencies.”


Founded by J. Mark Baiada in 1975, Bayada provides home-based nursing, rehabilitative, therapeutic, hospice and assistive care services to a wide range of patients across nearly two dozen U.S. states, as well as Germany, India, Ireland, New Zealand and South Korea.

The company recently transitioned to a not-for-profit model, punctuated by a surprise gift of $20 million to its more than 28,000 employees in November.

With a reputation as one of the country’s more innovative managed care organizations, Philadelphia-based AmeriHealth Caritas serves more than 5 million Medicaid, Medicare and Children’s Health Insurance Program (CHIP) members. It does so through its integrated managed care products, behavioral health solutions, and pharmaceutical benefit management and specialty pharmacy services.


“By incentivizing providers for better outcomes and efficiency, we help keep our members healthier and, as a result, out of the hospital and emergency room,” AmeriHealth Caritas Executive Vice President of Health Services Marilyn Eckley said in a press release. “This new program is a natural step in our continued relationship with Bayada to help our members live in their own homes and communities.”

AmeriHealth Caritas — part of the Independence Health Group in partnership with Blue Cross Blue Shield of Michigan — declined to provide additional comment for this story.

Medicare Advantage and dual eligibles

The value-based agreement between Bayada and AmeriHealth Caritas was developed as part of the managed care organization’s PerformPlus suite of value-based contracting programs.

Moving forward, Bayada will receive financial incentives for hitting strategic targets and quality metrics. Details on those financial incentives were not disclosed.

In addition to preventable hospital admissions, re-admissions and ER visits, metrics will include Healthcare Effectiveness Data and Information Set (HEDIS) measures. Broadly, HEDIS measures track quality of care related to effectiveness of care, access and availability of care, experience of care, utilization and relative resource use, and health plan descriptive information.

Missed shift rate will also factor into any prospective financial incentives for Bayada.

“We worked with AmeriHealth Caritas to determine key patient outcomes to track, all of which are aimed at helping community members to live healthier lives, right where they want to be, in the place where it’s most cost-efficient: their home,” Baida, who took over as Bayada’s CEO in August 2017, said. “AmeriHealth Caritas will evaluate our performance against those metrics, and we’re provided financial incentives for achieving key outcomes. As we receive these financial incentives, we will reinvest into our mission, which is in part to attract and retain the best caregivers in the industry.”

The agreement between Bayada and AmeriHealth Caritas will impact all Bayada patients under the AmeriHealth Caritas and Keystone First umbrella in Pennsylvania and Delaware receiving home health, personal care, private-duty nursing and hospice services between now and 2020.

As a managed care organization, AmeriHealth Caritas offers specialized Medicare Advantage (MA) dual-eligible special needs plans and Medicare-Medicaid plans, another point Bayada is opportunistic about.

“Bayada is one of few providers that can enter into such an expansive program, as we offer specialty practices that meet unique health needs of various populations,” Baiada said. “The AmeriHealth population and capabilities are similarly expansive and diverse. One of the things we’re most excited about is the integration of services — and incentives for great outcomes — for the dual-eligible population.”

On a bigger scale, the Centers for Medicare & Medicaid Services (CMS) has been testing out the home health Value-Based Purchasing Model (VBPM) since early 2016. At the moment, home health agencies in nine states are included in the model, though CMS plans to eventually take it nationwide.

Home health agencies participating in the model could see a maximum upward or downward payment adjustment of 5% in 2019, 6% in 2020, 7% in 2021 and 8% in 2022.

Gobbling up home health assets

Bayada and AmeriHealth Caritas aren’t the only ones excited about their newly announced value-based agreement.

“This is exciting to see,” Anne Tumlinson — CEO and founder of the research and advisory services firm Anne Tumlinson Innovations — told HHCN. “[It] signals that value-based agreements between post-acute providers and insurance companies do exist in nature.”

Bayada and AmeriHealth Caritas are “top innovators in their respective industries,” Tumlinson said, so it’s not too surprising the mission-driven companies teamed up on a value-based agreement.

The fact that AmeriHealth Caritas primarily serves a Medicaid population and that its Medicare products are for dual eligibles will likely give the organization a leg up compared to its peers and “run-of-the-mill” MA plans, she added.

Tumlinson also noted the organization is likely already familiar with how post-acute providers operate — and the value of long-term services and support in keeping people safely at home.

While some health plans have chosen to partner with home health providers in similar value-based arrangements, others have taken an acquisitive approach.

In July, for example, insurance giant Humana Inc. (NYSE: HUM) and two private equity firms finalized their $4.1 billion purchase of Kindred at Home, the largest home health provider in the U.S.

Tumlinson hopes to see more value-based partnerships similar to Bayada’s with AmeriHealth Caritas in the future.

“It’s great to see these two organizations working through the very hard process of a value-based agreement and partnership rather than just seeing the plan gobble up the asset — like Humana and Kindred,” she said. “It will be interesting to watch how these two different arrangements play out over time.”

Any financial gains Bayada nets through the value-based agreement will be put back into the company, mainly used to support its caregiver recruitment and retention efforts, Baiada said.

“A shift to the value-based health care system, in which insurers aren’t only rewarding health care organizations based on the quantity of services delivered, but on the quality of care provided, is a natural, and beneficial, part of the health care evolution,” Baiada said. “These partnerships are particularly impactful in home health care, where we can take a holistic view of each patient’s needs in the comfort of their home. This provides us with a better understanding of, and approach to, the health, social, financial and emotional factors that keep people safe, happy and at home.

Companies featured in this article: