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Since its introduction in the U.S. Senate in July, the Choose Home Care Act of 2021 has been a hot topic among home health leaders. Most have overwhelmingly embraced the legislation as a major step forward for home-based care.
One of these leaders is none other than Keith Myers, chairman and CEO of LHC Group Inc. (Nasdaq: LHCG). As an industry veteran, Myers is no stranger to navigating the inner workings of Washington, D.C., either.
Home Health Care News sat down with Myers at FUTURE for exclusive insight into the ongoing legislative efforts. In addition to Choose Home, LHC Group’s top executive also touched on the expansion of the Home Health Value-Based Purchasing (HHVBP) Model and personal care-related headwinds in 2021.
Highlights from HHCN’s conversation with Myers are below, edited for length and clarity.
As a company, the Lafayette, Louisiana-based LHC Group delivers home health, hospice, home- and community-based services, and facility-based care in 35 states and the District of Columbia.
HHCN: How does the Choose Home Care Act of 2021 build on the work we’ve seen take place in home-based care settings?
Myers: With the aging population that’s coming our way, we see several remedies to that challenge being put in place. Before we go to Choose Home, let’s talk about the hospital-at-home program, for example. The hospital-at-home initiative has been toyed with for maybe the last decade, but only really picked up momentum in the fourth quarter of 2020, driven by COVID.
Since then, over 175 hospitals have gotten waivers. All of that happened in a short period of time. Hospitals want to use their beds for higher-acuity patients, so they want to move lower-acuity patients downstream. For some hospitals, that’s the 10% lowest-acuity population. For others, it’s 20% or 30%. They’re doing that as an alternative to what has historically been done, which is either building or buying more brick-and-mortar facilities.
Going from that hospital-at-home experience to Choose Home, this legislation is just another extension of that. Choose Home targets the lowest 35% of patients in skilled nursing facilities (SNFs). Those patients could be cared for at home, freeing up that capacity in the SNF to accept the higher-acuity patients coming down from the hospital.
Choose Home has been getting a lot of support and attention from major players in the industry. How likely, in your view, is it to become a reality?
In my view, it is very likely, and I’m sure there are people who are less optimistic. I’ve been doing this for a long time, nearly three decades. My mentors were U.S. Senators John Breaux and Billy Tauzin, who served as chairman of the Commerce and Energy Committee. I’ve learned from them over three decades, how to read reactions on the hill.
I’m not going to say this is 100% accurate, but you can tell when there’s genuine enthusiasm and when a member of the House or Senate believes that something you’re proposing benefits them in their reelection campaign. When you have both, then you have a winner. When I was in my 30s and going around the hill passionately advocating for something, at the time, Chairman Tauzin told me, “You’re just too passionate about things that don’t help them get reelected.” He said, “Write this down, ‘reelection.’” Then he had me write it down two more times. That’s why I think Choose Home has a good chance.
You’ve talked about how a bulk of SNF patients can be cared for in the home under Choose Home. Plus, there’s the cost-savings potential. There’s a lot of positivity surrounding the legislation, but SNF operators have been vocal in their opposition. Has this impacted the bill at all?
It has had more of an impact in the House of Representatives because, in the House, they run for reelection every two years. A threat from the SNF industry is more concerning to them in the near term. I believe as this bill gets brought into the debate, from that $2.5 billion in savings, some of that is going to have to be given to the SNFs, in some form or fashion, to help them bridge to this new place.
If the U.S. Centers for Medicare & Medicaid Services (CMS) proposed payment rule for 2022 is finalized in its current form, how will the expansion of HHVBP impact your business?
We’re going to see about a $3 million bonus payment in the current year. The home health revenue that we have in the initial seven states represents about a sixth of our home health revenue. We didn’t do anything different in these states; all of the things we’ve deployed, we do across the company. It stands to reason that we should have that same experience in those other states. This $3 million should become $18 million if HHVBP expands.
That said, HHVBP is going to have to go through a number of iterations to become good enough because it really does discriminate against patients who have long-term conditions and aren’t going to improve. It creates an incentive for home health providers to discharge those patients. That’s not good.
Here at FUTURE, you briefly touched on the challenges LHC Group has seen on the personal care side of the business and how those have possibly hindered growth? What are some of the ways the company has begun navigating those challenges?
In the home health and hospice space, we have some strategies that we can point to in relation to positive results. I think because the turnover is so high in the personal care space, we just don’t have employee consistency.
During COVID, when stimulus money was flowing, the rate increased so much for the people who are trying to hire. Our payer source is Medicare or managed Medicare, and they pay an hourly rate. All we get is the differential. If we pay $14 an hour, we may get paid $17. The rate-setting is every year, so if we have to pay more during the plan year, then they’re not open to paying us more.
A gentleman came up to me after my panel and said, “I heard your comments about personal care. It doesn’t sound like you all really like that business. Would you be interested in selling it?”
I immediately thought, “Wow, I probably went too far,” because we think personal care is critical. And we need to expand it, but doing so is definitely challenging. I think our strategy needs to be … we have a very good leader in that space, Maxine Hochhauser, president of LHC Group’s home- and community-based services, but she’s shackled somewhat by all of the traditional Medicare practices of LHC Group. She needs to be given more flexibility.
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