Institute for Accountable Care Director: Home Health Providers, ACOs Need to Get on Same Page

For many Accountable Care Organizations (ACOs), having a strong presence in the home has been a vital strategy for improving care management and identifying patient needs. Even so, many ACOs carry out that strategy with in-home visits from primary care practitioners — and not necessarily dedicated home health providers.

That may change in years to come, but home health providers will have to change their behavior first, experts argue.

Broadly, the ACO model has its origins in the U.S. health care system’s shift from volume to value.


At its core, the model brings together doctors, hospitals and other care providers that work together financially to provide coordinated care for Medicare patients. Ultimately, the goal is to produce better health outcomes, prevent medical errors and avoid unnecessary duplication of services, as well as serve as a cost-savings tool.

Roughly 10% of the U.S. population is covered by an ACO, according to Health Affairs research published in 2018.

For ACOs, home health care is critical to operating strategy and important in terms of keeping costs low, Robert Mechanic, executive director of the Institute for Accountable Care, told Home Health Care News.


“As ACOs look at the costs of post-acute care, they are finding that, in a lot of areas, spending is really high for facility-based care,” Mechanic said. “There has been a conscious effort to try and identify people who don’t need to be in a facility and discharge them to home, as long as they make a determination that they’re safe at home. Substituting home health agency care for skilled nursing facility (SNF) or rehab care — where it’s appropriate — makes sense for the ACO model because they are on a global budget.”

Washington, D.C.-based Institute for Accountable Care is a research organization that was founded by the National Association of ACOs (NAACOS), an industry advocacy group whose members include hundreds of ACOs serving an estimated 23 million patients covered by Medicare, commercial insurance and Medicaid.

ACOs in the home

In 2019, the ACO model is evolving, as it is no longer the newest model offered by the Centers for Medicare & Medicaid Services (CMS), particularly when it comes to navigating the management of complex patient populations.

“The ACO model is a very young one. It really got started following the passage of the Affordable Care Act,” Mechanic said. “They’ve been developing new capabilities and new areas of focus as they mature. Initially, when they got started, most ACOs just had to adapt to the model and understand the rules, because a lot of ACO activity is funneled through primary care. Over time, that’s evolved into trying to be more sophisticated about identifying complex patients and how to be proactive about managing them.”

About 80% of ACOs are utilizing home visits as part of their care transition programs for complex patients, according to a different June study from Health Affairs.

“The ACOs that we interviewed stressed that they saw high value in doing this type of home-based care,” Taressa Fraze, the study’s lead author and a research scientist at The Dartmouth Institute for Health Policy and Clinical Practice, told HHCN. “More than anything, they felt like being able to see the patient’s home and getting a sense of what that patient’s life is like on a day-to-day basis was important. The ACOs we talked to saw a huge value in doing this work in terms of building a stronger relationship with the patient, making sure they understood what the patient needed and helping to address things more broadly.”

While the scope of Fraze’s research does not include home health care and instead focuses on ACOs using physician home visits as part of care transitions, findings suggest these organizations are beginning to place value in all kinds of home-based health care.

Home health insiders have repeatedly voiced their desires in the past to be more included in the ACO model. Some, however, believe home health providers are overly driven by utilization, making them less appealing partners for ACOs.

“The big questions for home health agencies is: How can they organize to be able to partner with ACOs and work toward their goal of keeping people healthy and providing appropriate services, but not overusing services?” Mechanic said. “That requires home health agencies to get out of the mindset of, ‘How do we get more episodes and more visits?’ And into, ‘How do we prevent ACO patients from having to into the hospital?’”

Home Health barriers

Indeed, there may be room for ACOs to partner with home health providers, but there are a number of barriers that create difficulties.

“There is not a good information system linkage between home health providers and primary care physicians,” Mechanic said. “Typically, home health providers are not integrated into the physician’s medical records, so there is a lot of paperwork that sits in piles and doesn’t get signed effectively, and home health agencies have really organized themselves around the Medicare-certified visit.”

Another barrier to these types of partnerships is that ACOs need services that don’t fit into the construct of a certified home health visit, and this brings up differences in payment structure, according to Mechanic.

“They may want to use a nurse for urgent care,” he said. “A patient calls the clinic saying, ‘I’m having a real problem. I don’t know what to do.’ If the patient can’t drive and is unable to get [to a doctor], the typical practice is to call 911.”

In that situation, the ACO is thinking about how it can reach the patient and keep him or her out of the hospital. There are several ACOs that have partnerships with home health agencies, where they would send a nurse and jointly do an evaluation of this patient, then decide what to do next with the goal of treating the patient in place.

“But that’s not something that Medicare pays for, and nobody expects home health providers to do this for this for free,” Mechanic said.

The bottom line: fundamentally, home health providers and ACOs may have diametrically opposing frameworks, the Institute for Accountable Care director noted.

“One of the issues is that home health agencies are revenue-driven businesses,” he said. “If ACOs are going to work with home health agencies, they are interested in a much higher level of services than some agencies provide. They want the agencies to get out and see their patients within 24 hours of referral. They want them to use visits efficiently and not overuse them.”

“Home health agencies look at their balance sheets and determine that they have to have fewer LUPAs, more episodes and more re-certs,” Mechanic added. “The ACO model is the exact opposite of that. The way for home health [providers] and ACOs to work together is … to get on the same framework. They have to get in the same mindset of proactive care and managing population health.”

LHC Group takes on ACO management

One big home health provider that has managed to forge strong ACO connections: LHC Group (Nasdaq: LHCG).

In 2018, LHC Group acquired Almost Family in a deal that included Imperium Health Management, one of the country’s largest accountable care organization management companies.

Today, the Lafayette, Louisiana-based company now has at least 30 ACOs covering 460,000 Medicare lives.

As one of the largest providers of home health, hospice and personal care services in the U.S., investing in a move that positioned LHC Group to work more closely with ACOs seemed like a step in the right direction, Chief Innovation and Technology Officer Bruce Greenstein told HHCN.

“It was a keep or spin-out opportunity for us,” Greenstein said. “While it didn’t appear that it was a core business for LHC Group at first blush, we have large amounts of data coming in on the ACO population, and many of these ACOs are embedded in joint ventures we already had. It created the finishing touch to the virtuous circle of being a provider, being a joint venture partner and now being an ACO manager.”

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