Dignity Health Director: Home Health Providers Must Think Strategically in MA Contract Talks

As Medicare Advantage (MA) continues to expand rapidly, home health providers will need to develop strategic plans in order to secure successful contracts with plans.

“One of the very important pieces here is determining your strategy and learning about your markets,” Paul Giles, director of home health finance and business operations at Dignity Health, said Thursday during a National Association for Home Care & Hospice (NAHC) webinar presentation. “What kind of plan presentation or penetration do you have?”

San Francisco-based Dignity Health is one of the largest not-for-profit health systems in the U.S., operating 39 hospitals and more than 400 care centers in locations across California, Arizona and Nevada.

Overall, enrollment in Medicare Advantage has remained consistent over the past few years.

In fact, 22 million people were enrolled in MA plans in 2019. This rate is similar to the last two years, according to research from the Kaiser Family Foundation (KFF).

Additionally, Medicare Advantage enrollment grew by almost 1.6 million beneficiaries between 2018 and 2019. The Congressional Budget Office (CBO) estimates that the number of beneficiaries enrolled in MA plans will rise to about 47% by 2029.

For home health providers looking to get in the Medicare Advantage game, it will be important to determine which MA plans they want to establish contracts with, educate themselves on their needs and prepare to negotiate.

That said, home health providers should bear in mind that these relationships are just as vital to MA plans as they are to providers.

“These plans need you,” Giles said. “They are required to provide home health care to the beneficiaries that are enrolled in their plan. They are going to want your services, but they can be selective about how they decide to use.”

In general, when it comes to MA contracts, providers should be cautious about contract provisions that are inherently different than traditional Medicare. They should also be aware that state laws don’t necessarily apply to these types of agreements.

These contracts should specify any data obligations the provider has, what the probable co-pay, deductibles are for all plans, what audit rights the Medicare Advantage organization has, reimbursement for administrative costs and rights to cancel the contract.

“Get an understanding of your rights within the contract so there are no misunderstandings,” Giles said.

The upcoming Patient-Driven Groupings Model (PDGM) may impact providers that currently have MA contracts.

These providers should review their current contracts for payment methods, according to Giles.

“It’s going to be very important to review your contracts now,” he said. “That is what’s going to dictate how we get paid. If it says 100% of Medicare, then you can work out the details of moving from a 60-day payment to the 30-day payment period for PDGM.”