For Home Care Agencies, Tracking ‘Total Cost of Care’ Is the Secret to Breaking into Narrow Networks

Home care agencies and their services have always been valuable to the patients they serve. But being able to demonstrate that value to payers requires more than just patient testimonials.

As the home care industry enters into an era filled with new tailwinds, including Medicare Advantage (MA) and managed care opportunities, providers need to create value propositions that make sense to payers.

Harvesting key data points is not just internally helpful for agencies. Being able to show what part a home care provider plays in keeping cost of care down is crucial in gaining new business.


“Tracking the number of patients that you’re serving and the total costs associated with those patients will allow you to show — in numbers — how [payer networks] may have those flaws or gaps in their existing network structure,” Effie Carlson, the chief growth officer at Healthcents, said at the Home Care Association of America (HCAOA) Virtual Leadership Conference Tuesday. “And that will be a way for you to push forward and get past that initial set of roadblocks.”

Founded in 1994, Austin, Texas-based Healthcents is an outsource solution company for managed care and general payer contracting. As part of its business, it provides analytical, contracting, negotiation and credentialing services to a wide range of health care providers.

In 2019, 75% of home care agencies did not track simple data points such as readmission rates, according to data from Idaho-based market research and education firm Home Care Pulse. For those that did, their means of recording that data was often elementary and conducted by Excel or just paper and pen.


“A lot of times people don’t think about that as value,” Carlson said. “And they’ll take the out-of-network from a referral and revenue perspective, but they don’t understand how that data can be used from a value proposition point of view.”

Narrow networks help payers from a clinical coordination perspective. Keeping a small group of providers as their go-to’s allows them to shed themselves of the burden of working with hundreds of agencies and systems across the country.

That means home care agencies looking to break into these networks need to clearly define what they are, what they do, and how they’d help if they were to become part of that smaller network.

Payers are looking for specific performance indicators. That’s why “value” is not just about the value of an agency, but rather the value they can provide to a particular payer.

“It’s not all about you,” Carlson said.

Gaining insight into how a home care organization can provide value to a payer can start with something as simple as conducting a SWOT analysis to gauge strengths, weaknesses, opportunities and threats. Additionally, an agency knowing more about how it fits in a market in regards to scale, geography and other factors can help it make more meaningful relationships with payers.

“In home care, it’s especially important because this space has so much potential to continue to reduce readmissions and keep people out of higher levels of care — and in their preferred place of care as well,” Carlson said.

Approaching payers without a value proposition or a sense of what value an agency can offer in each situation is futile.

Without the legwork and without a plan, looking for new business may just end up hurting business overall.

“All of this is saying that you need to understand what the health plan is trying to accomplish, and if they have any of these pre-existing network designs or desires in place,” Carlson said. “Because if you don’t, you’re going to waste a lot of time, and not be able to get past the first

potential barriers.”

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