Post-Acute Care Providers May Lack Needed Bargaining Power in MA Conversations

There has been a sharp rise in the number of Medicare Advantage (MA) enrollees over the past several years and a steady expansion of the program itself. But MA still isn’t the most reliable payment stream for post-acute providers, especially those who operate in the in-home care space, industry experts warn.

In total, more than 20 million Medicare beneficiaries were enrolled in Medicare Advantage plans in 2018, compared with 10.5 million in 2009, according to data from the Kaiser Family Foundation. San Francisco-based Kaiser Family Foundation is a nonprofit that focuses on national health issues, as well as the U.S. role in global health policy.

When it comes to hospitals and physician groups, MA rates are relatively comparable to traditional fee-for-service Medicare. However, when it comes to in-home care and other types of post-acute care, MA rates often pale in comparison.

Advertisement

“That potentially says something about the bargaining power of the [post-acute] sector,” David Grabowski, a professor at Harvard Medical School, said Thursday during a presentation at the Senior Care 360 conference in National Harbor, Maryland. “Medicare Advantage is not as desirable for providers as it is for patients [compared to] traditional fee for service.”

Another part of the problem, Grabowski said, is that Medicare Advantage doesn’t just push down on payment with plans looking to pinch pennies. It also puts downward pressure on utilization, as many MA players try to limit care visits.

Additionally, MA plans are much more likely to police length of use or stay in a way that doesn’t happen as readily in traditional Medicare, according to Grabowski.

These are just a few of the challenges that home health agencies face in regards to Medicare Advantage.

“There is a reason most home health agencies prefer traditional Medicare patients,” Grabowski said. “There is a lot of administrative work in terms of managing them, a lot of compliance, which you don’t see in traditional Medicare.”

Another issue: At least with skilled nursing facilities (SNFs), the quality of facilities that MA enrollees actually utilize relative to traditional Medicare tends to be lower in terms of quality and hospital readmission rates.

While data measuring the quality characteristics of home health chosen by fee-for-service Medicare versus Medicare Advantage isn’t as far along as the information that exists for SNFs, the story appears to be similar, according to Grabowski.

“I’d be curious to see if MA plans are able to contract with the top home health agencies,” he said. “I think the best home health agencies on the market are probably able to get all of the traditional Medicare patients they want, so it ends up that because you are paying less, because you are being so challenged from an administrative perspective, because you are managing the length of use, you are not able to work with the best providers in those markets — and you end up with maybe those lower-star agencies.”

Medicare Advantage has long been a hot topic in the home health care world. It is now — thanks to Centers for Medicare & Medicaid Services (CMS) rule changes over the past two years — taking a prominent place in the non-medical home care space as well.

“I’m seeing a lot of interest from payers right now in trying to understand the post-acute care solution and the continuum of care that’s available in the home,” Christy Vitulli, senior vice president of payer relations and network innovation at Amedisys Inc. (Nasdaq: AMED), recently told Home Health Care News. “I’m also seeing a lot of interest in how that transfers over to value for payers, and it’s creating a lot of good dialogue with our managed care partners.”

Companies featured in this article:

,