Humana Set Up to Be Largest Home-Based Care Provider Approved for Direct Contracting

Once its 100% acquisition of Kindred at Home is finalized, Humana Inc. (NYSE: HUM) believes it will become one of the premier home health care providers in the entire country. It certainly has the resources to be just that.

That’s partly because the payer-provider hybrid is also directly contracting with traditional Medicare through the Global and Professional Direct Contracting Model.

The Louisville, Kentucky-based Humana was one of just 53 organizations nationwide accepted as a direct-contracting entity (DCE) before the Biden administration put a pause on the model to review it before moving forward.

That first tranche of DCEs began participating in the model on April 1.

“We’re honored that Humana Care Solutions is one of only 53 organizations selected to participate in this innovative value-based model, which strives to accelerate the shift away from fee-for-service across the nation while providing greater financial consistency for providers,” Oraida Roman, VP of value-based strategies at Humana, said in a press release. “This is important and exciting work, to collaborate with clinicians and expand the availability of value-based care beyond Humana’s membership, and in a way that supports physician organizations during uncertain times.”

Broadly, the Global and Professional Direct Contracting Model gives private health care providers the opportunity to engage in risk-sharing arrangements with traditional Medicare, with the ultimate goal being a reduction of costs and an increase in quality of care.

The model was originally introduced in April 2019 as part of the shift to value-based care.

Additional providers originally thought that they’d have a crack at the innovative opportunity as well. But since the new administration, officials at the Centers for Medicare & Medicaid Services (CMS) and its innovation hub have decided to close the program to new applicants for now.

It’s still unclear when or if the program will begin expanding again, but insiders believe it will return to accepting new providers, albeit with some likely modifications.

Humana, which currently owns 40% of Kindred at Home, is one of a few DCEs with an established home-based care focus.

Kindred at Home, which will undergo a name change once fully owned by Humana, is one of the biggest home health providers in the country. It has locations in 40 states, serving 550,000 home health, hospice and community-based services patients per year.

Among the other home-based care direct-contracting entities are Minnesota-based Lifesprk and Huntington Beach, California-based Landmark Health.

Humana Care Solutions has partnered with about 420 primary care providers to participate in the direct-contracting model, according to Humana.

This allows Humana, which already has more than 2.7 million Medicare Advantage (MA) members across the country, to further expand its network.

“Humana Care Solutions will take on quality and cost accountability for the care of aligned Original Medicare beneficiaries,” the company noted in the release. “Furthermore, Humana Care Solutions will support providers with clinical and analytical capabilities to improve care coordination and drive a more holistic approach to patient care that goes beyond traditional clinical treatment.”

Humana is likely to have a competitive advantage in direct contracting, given the current pause on the model.

As it figures out next steps, providers outside of that group of 53 DCEs will have to wait their turn.

This is the third time since December that Humana has been granted the opportunity to participate in CMS models. It was also named an approved payer partner in the government agency’s Primary Care First Model and its Medicare Hospice Value-Based Insurance Design (VBID) demonstration.

Two-thirds of Humana’s MA beneficiaries now seek care from primary care physicians in some form of value-based agreement. The members involved in those agreements were less likely to be hospitalized or go to the ER in 2019 compared to those that weren’t.