Why Home Care Providers Should Stand Strong in Negotiations with MA Plans

Home care companies looking to lean into Medicare Advantage (MA) opportunities in their markets will have to plan prudently. That planning must be pretty comprehensive, too, as there’s no silver bullet to winning MA business.

That’s according to ATI Advisory founder and CEO Anne Tumlinson, who spoke at the Home Health Care News Medicare Advantage for Home Care Virtual Summit last week. ATI Advisory is a Washington, D.C.-based research and consulting services firm.

“Reach out, form relationships, connect with network aggregators, … and then just tighten up operations internally,” Tumlinson said at the event.

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More than 26 million individuals are now enrolled in MA, meaning the program has almost half of all Medicare beneficiaries. Current and projected growth has made MA a priority for many home care operators, even if it’s not the lucrative money-making venture they initially hoped for.

In 2021, there are 429 plans offering in-home support services benefits. This includes big-name insurers such as Anthem (NYSE: ANTM), Humana (NYSE: HUM), Centene (NYSE: CNC) and others.

ATI estimates that number will reach upwards of 540 in 2022, though that could change as plans start to tout their benefits packages in the fall.   

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“This is sort of the trajectory that we think we are on,” Tumlinson said. “But let’s wait and see. We’ll know more in October. This is still a pretty exciting trajectory for this benefit.”

In terms of geography, areas that already have strong MA penetration tend to have richer packages. That’s partly because plans are competing with one another for enrollment.

“Medicare Advantage plans are intensely competing for enrollment in places like California, Florida and Texas, for example,” Tumlinson said.

What do those in-home support services benefits look like exactly? Well, they often aren’t too robust, at least in terms of hours of care delivered in the home.

As part of its work, ATI identified 170 plans that were limited to a maximum hour cap per year for in-home support services. Nearly half of those plans offered 24 or fewer service hours per year, with 18% offering between 24 and 60 hours.

Other plans offer a certain number of in-home support services hours per hospital discharge.

“This is not, by any stretch of the imagination, an unlimited benefit,” Tumlinson said.

Securing MA relationships

For home care providers looking to secure MA relationships, there are no plug-and-play solutions.

With this in mind, providers should “get smart” about the plans in their markets. This means gaining an understanding of what is being offered and, more broadly, studying the MA landscape.

When trying to establish relationships, the biggest areas of friction between providers and MA plans are usually benefit amounts and rates. 

While home health providers typically have experience negotiating rates with MA plans and dealing with all of the challenges around utilization management and prior authorization, this is a newer experience for their home care counterparts.

“If you’re purely in the private-pay home care space and you don’t have any experience with any of that, it’s a 180-degree turn,” Tumlinson said. “What Medicare Advantage plans don’t appreciate is that, unlike home health or skilled nursing, private-pay home care agencies … don’t need you. [They already have] a base of customers.”

Since home care agencies have a base of customers and can set their own revenue stream, MA is an additional opportunity that providers can choose to walk away from if they aren’t being offered a rate that works for their business, she noted.

“I don’t think it does any favors if we give Medicare Advantage plans the impression that this workforce is cheap,” Tumlinson said.

Ultimately, some MA plans will view working with home care providers as an opportunity to attract new members, while some will view it as a strategy to better manage its member population.

For now, Tumlinson believes that it’s still the age of exploration when it comes to MA and home care. The relationships between MA plans and providers will continue to grow when there is more education around the value of home care.

“There’s a really important policy conversation playing out in Washington, D.C., right now around health care at home, … and I think we still have a lot of education to do around the importance of home care and the importance of support around ADLs [activities of daily living],” she said.

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