Addus Chief Strategy Officer: Workforce Shortage Remains ‘Biggest Challenge in All of HCBS’

While Addus HomeCare Corporation (Nasdaq: ADUS) has long been known as a personal care giant, it’s increasingly expanding in the more clinical home-based care arenas. It’s doing so, too, while going after more value-based payment arrangements, Chief Strategy Officer Darby Anderson recently told Home Health Care News.

As a company, the Frisco, Texas-based Addus delivers personal care, home health and hospice services to roughly 44,000 people in 22 states. Its list of payer clients include federal, state and local governmental agencies, plus managed care organizations, commercial insurers and private pay.

In the midst of the home-base care provider’s ambitious plans, Addus and its industry peers are dealing with a labor crisis that has seemingly reached new heights because of the COVID-19 pandemic.

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HHCN caught up with Anderson to learn more about the state of home- and community-based services (HCBS) in the U.S. for our latest episode of “Disrupt.” In addition to his role at Addus, Anderson serves as vice chairman of the Partnership for Medicaid Home-Based Care (PMHC), a Washington, D.C.-based HCBS advocacy group.

Highlights from HHCN’s conversation with Anderson are below, edited for length and clarity. Subscribe to Disrupt via Apple Podcasts, Google Play Music, SoundCloud or your favorite podcast app.

*Note: HHCN connected with Anderson toward the middle of May, shortly before new guidance was released on the 10% FMAP bump. 

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HHCN: How has Addus rebounded from the initial COVID-19 disruption that started last spring?

Anderson: It has been a challenging year, I think, for everybody in our industry. Although, I will say, when you look at everything, there was certainly the potential [for COVID-19] to impact the industry and the businesses within it a lot more. But I’m not trying to understate the impact that has been felt.

Our quarterly filings speak for themselves, in terms of revenue and census growth. I think it’s safe to say we’re seeing a rebound in both new-consumer growth as well as revenue. There has been a lot of talk about — and a lot of enthusiasm for — home- and community-based care. In sort of the overall scope of reporting on the pandemic and the significant problems that nursing homes have faced, I don’t think we’ve really seen some of those impacts emerge yet, right? There is a return to some level of new normal. But I don’t think we’re really seeing, as an industry, this big increase in consumer preference or family preference for “care at home” versus institutionalization.

As far as recent news, what’s going on with Addus and Homecare Homebase? The two organizations announced a new initiative to build a personal care-inclusive EHR that spans the full home-based care continuum.

We’ve been in the market for a while to consolidate the multiple systems that we’re using to manage our personal care business. We’ve done a number of acquisitions in the personal care space and have not migrated those businesses to our existing Horizon system. We’re operating on three — maybe even four — different systems.

We just have not been able to identify a system that fully meets our diverse and somewhat unique needs. We’ve had a relationship with CellTrak for a long time. We’ve been really successfully using their product to support our home care and direct care staff with electronic visit verification (EVV) functionality. Now, we’re excited to combine those capabilities, and our extensive expertise and history in the personal care business, with that of Homecare Homebase. The goal is to create a solution to optimize scheduling and streamline authorization management, then prove EVV compliance and ease the back-end compliance, billing, payment processes in personal care.

We can execute all that while getting the luxury of doing it in a system that’s integrated with our home health and hospice systems.

That seems like something that makes a lot of sense, just considering how intertwined all the different levels of care are these days.

Absolutely. I think we’ve only scratched the surface of the integration or coordination of personal care services into the larger health care delivery system. That’s a really important and emerging trend. It’s something that we just need to make happen.

How has EVV gone, by the way? It seems like I haven’t heard much about that anymore, which hopefully means everything has gone smoothly.

It has probably lost a little bit of steam in terms of attention during the pandemic. That’s true both in the sense of publicity and conversations around EVV, but also a little bit in terms of slowing the implementation rollouts in states.

It is — like most things in Medicaid — very state-specific. A lot of states are adopting a more open-model solution that allows providers to utilize a tested and true EVV system of their own selection for the point-of-care delivery of EVV, that then interfaces or aggregates up to a system that can be accessed by the state or managed health plans. Other states have gone the route of just closed systems, saying, “All providers have to use this system.” That inflexibility kind of takes a lot of the efficiency out of the inherent nature of electronic visit verification.

You shouldn’t have to duplicate systems or do multiple data entries into multiple systems. Well, if you have a closed-model system, there’s no avoiding it. We continue, through PMHC and Addus, to promote the use of an open-model solution. Hopefully states that maybe got started in a closed model will adapt and open those systems up.

Let’s talk about the American Rescue Plan. There were a lot of questions about that 10% FMAP bump for HCBS. What was your initial reaction to that news? And have there been any developments?

I think there’s overarching enthusiasm around the recognition of HCBS. Providing additional funding through the American Rescue Plan is certainly a positive and part of a trend: This administration really does recognize the value of home- and community-based care. So that’s all good.

The devil is in the details, however. I think everyone is eagerly anticipating the release of Centers for Medicare & Medicaid Services (CMS) guidance. That’s expected very soon.

I remain optimistic that the guidance will be consistent with the legislative intent of the act, as I see it. States should spend no less than they have historically on HCBS, and — in making specific investments to improve or enhance HCBS — they will become eligible for an additional 10% match that will fund those investments. The caveat: It supplements and does not supplant state spending.

Similar to what we saw with Appendix K waivers, in terms of CMS quickly being able to approve changes to Medicaid HCBS care, I hope to see that CMS will approve state actions, retroactive to April 1, when the funding started. That’s so states can implement these investments that will benefit the workforce, the providers and the consumers — rate increases that translate into improved wages and benefits.

There is a fiscal cliff next March 31, where the 10% funding would go away. But I think there’s a fair number of states that have already planned for increases they may be able to accelerate, so that they can ease the burden on their state budget and get those provider rate increases in place earlier. Outside of that, I’m hopeful that states will focus attention on recruitment and retention strategies, or funding to providers to promote recruitment and retention.

The thing I hear about most is the workforce shortages and workforce crisis that is surrounding most providers in HCBS.

What is the staffing situation like today? I’ve heard there are a lot of challenges with contract labor, in particular.

We don’t use a lot of contract labor, so I don’t know that I could really comment on that.

But I think everybody is facing this problem. There certainly are regional pockets of “very, very difficult,” though. New York State, for example, is really difficult to recruit in right now. From our Partnership members and lots of folks I talk to in the industry, they all say it’s the biggest challenge.

There’s been a lot of coverage in the media and talk within Congress about the impacts of the enhanced unemployment benefits. “Are people receiving more money to not work than to work?” I think that’s very difficult to assess with a broad brush. A lot of our workers are raising families and have kids, who may or may not be in school. That inhibits their ability to go back to a full-time schedule. I don’t think you can, you know, cast all the blame on unemployment benefits. But it is certainly having an effect.

Provider Relief Funds, temporary rate increases, payment from some states on retention-type initiatives. There’s a fair amount of funding going to support people who have felt some impact from the pandemic. All of that has to have at least some impact on folks’ ability, willingness and availability to go back to work.

We could be suffering through a spike as we sort of begin the end of the pandemic. But even after that, this problem is not going away. This is the biggest challenge in all of HCBS. The sheer numbers of folks who are attracted to this role versus the consumer demand, there’s an inequity there that needs to be addressed.

There’s the American Rescue Plan, which Congress pushed through. There’s the American Jobs Plan proposal, too. What’s your take on infrastructure discussions?

Without a lot of details and remembering this is just talk at this point, an initial takeaway is the symbolism. This administration is highlighting significant investments in long-term care, particularly HCBS. That’s something the industry should take some pride in. Calling for more HCBS funding is the most direct recognition of the value and the need for investment in long-term care by any administration in our history. So I really hope that this is a start of dialogue for dramatic change in long-term care services, a change that results in establishing them as a core part of the health care delivery system.

Not only is that beneficial for patients, with the opportunity for cost savings. But it’s a key to improving the long-term care, community-based workforce shortage as well. We need to give these people not just higher wages and benefits, but a real feeling of purpose. You’re not just “the cleaning lady” or “the girl.” This is somebody who’s vested in the long-term improvement in the chronic conditions of their patients. This is somebody who’s part of the team that’s helping to manage that.

What else has your attention at the moment, either at Addus or PMHC?

From both perspectives, we’re always paying attention to discussions and actions related to increasing minimum wage and other potential workforce impacts. Generally, we would agree that is beneficial to the industry. But that almost always requires additional funding to support.

Federal initiatives that put a burden on states to fund [higher wages] are problematic. Local or municipal actions that put pressure on states to fund [higher wages] are equally problematic. We’re always balancing what is good for our workforce with payment support.

There’s this debate going on about the role of long-term care facilities moving forward. What are your thoughts on “SNF versus HCBS,” so to speak?

Globally, I would say that there’s always a place for skilled nursing facilities in the health care continuum. I’m a huge believer in consumer choice, a big believer in “care at the right place, at the right time.”

Clearly the growth trend in HCBS indicates the consumers’ preference for care at home. But I certainly think skilled nursing facilities remain a part of the overall landscape. Any home care operator that tells you all clients can be cared for at home is not being truthful. There are consumers who need around-the-clock, institutional-type setting. But maybe some people don’t need that forever. Let’s focus the care provided on improvement and restoration to a level of functioning that allows them to stay at home and in their community. I think that’s what people want.

What else is in store for Addus this year?

I think we’ve been pretty clear in our calls and presentations about our objectives. Continuing to keep our employees, clients and patients safe as we emerge from the end of the pandemic is obviously a priority. Apart from that, we’ll look to hopefully continue driving organic growth in all of our segments. We do have a robust M&A expectation and pipeline. Our current focus is steeped a bit toward clinical services in key markets to round out our offerings there.

And we’re also accelerating value-based initiatives, opportunities with health systems, managed care organizations and any other risk-bearing entity. We’re really looking to utilize all segments of our services, but really uniquely hinged on the personal care aide, who spends more time with these consumers than anybody in the health care system. That’s a big part of our value-based initiatives with multiple partners across our platform.

A good example of that is with Presbyterian in New Mexico.

Absolutely, They’re a great partner. And Presbyterian is in New Mexico, where we’ve got a very large footprint of personal care, home health, hospice, even visiting physician services. It’s a great place for us to really have a meaningful project around emergency department avoidance, rehospitalization prevention and closing care gaps.

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