Home Health Agencies Need to be ‘Best of the Best’ to Land MA Business

As Medicare Advantage (MA) enrollment explodes and plans begin to offer more benefits to members, home health and home care agencies alike need to prove their value in order to gain new business.

Specifically, home health providers need to demonstrate how they can lower costs and potentially add members for MA plans.

“The important thing is to make sure that we understand the Medicare Advantage plan’s goals, and what the value proposition that home health agencies can provide to them is,” Jeff Aaronson, the consulting director at McBee Associates, said Monday at the National Association for Home Care & Hospice’s (NAHC) 2020 conference.

Wayne, Pennsylvania-based McBee Associates is a health care services and consulting firm that offers financial, operational and clinical help to health care providers across the health care continuum.

Overall, MA enrollment increased by 60% from 2013 to 2019, according to recent statistics compiled by actuarial consulting firm Milliman. During that same period, enrollment in traditional Medicare increased by only 5%.

On their end, that’s what MA payers want more than anything — more individuals signing up under their plans. But they also want to see cost containment and to find better models for care, Aaronson said.

“[These payers] are looking at how to develop new effective models of care and how can they take better care of their patients,” Aaronson said. “So they’re very much a disruptive force in the industry — but in a very positive way — looking for creative ways to reduce hospital stays, reduce trips to the emergency rooms [and much more].”

To forge successful MA relationships, home health agencies need to use data to prove their worth across multiple areas.

That shouldn’t be too difficult for agencies. Most have spent years working with complex patients, individuals that MA payers need help keeping healthy if they are going to continue to add beneficiaries while keeping costs manageable.

“They want to align with the best of the best,” Aaronson said.

Being “the best of the best” means having good star rating patient-satisfaction scores. It also means constantly lowering rehospitalization and ER rates while filling care gaps across settings.

Increasingly, Medicare Advantage entities are additionally looking to contract with providers that have a larger array of services. That has been a persistent trend in the home health space, as more agencies enter into palliative care and other service lines.

“A way to better enhance your value and to better enhance your negotiating standpoint is having a bundle of service lines to provide, such as home health, hospice, personal care [and others],” Aaronson said.

Agencies that can operate across the continuum of care are immediately more valuable to MA plans because of their flexibility.

Additionally, having non-traditional capabilities in line with the new Supplemental Benefits for the Chronically Ill (SSBCI) program is also an advantage.

Broadly, SSBCI is all about keeping patients healthy before their condition becomes acute. Pre-acute care — the category of non-medical home care that agencies have increasingly been paid by MA plans to provide — is very valuable from a cost perspective.

That pre-acute care includes having the capability to keep members from falling, for example. It likewise includes helping them with transportation and nutrition, among other activities of daily living.

“Can you provide some of those services within your organization that will appeal to the MA plans to help keep those patients healthy and avoid expensive hospital stays?” Aaronson said.

Keeping track of fall rate statistics is a good place to start for home health agencies looking to market themselves to MA organizations. Tracking data, in general, is vital, including an agency’s cost-per-visit, supply cost and cost-per-beneficiary.

Geography can similarly be beneficial, depending on where an agency is located, especially if it operates in a certificate of need state.

“Specific counties that you operate in may have very little competition,” Aaronson said. “There might not be that many different agencies in certain counties. If you can find where [the] map of MA plans matches your map, there’s a great opportunity there.”

Home health is a relationship-based business. But in the MA world, contracts depend on what an agency can do for plans and their ability to prove that value.

“If you can’t provide value to those MA plans, then it just becomes a transactional relationship, … and that’s what we don’t want in this industry,” Aaronson said. “We want to be partners with the MA plans.”