With Medicare Advantage (MA) enrollment on the rise, home health providers need to be primed to adapt to the changing market.
MA has played a larger role in the Medicare program over the last several years. MA enrollees have increased by 8.3%, on average, over the last five years, according to data from post-acute analytics and metrics firm Trella Health.
Additionally, enrollment increased by 9.5% between 2019 and 2020, with MA penetration reaching 46.6% in March 2021.
“Medicare Advantage is not a new concept or new program,” Michael Neuman, vice president of data science and engineering at Trella Health, told Home Health Care News. “What we’ve seen is that since the Affordable Care Act, more people are starting to become aware of these [MA] programs. There’s a lot more marketing out there. I think what is driving people into [MA] is the perception that fee-for-service is limited in terms of its network.”
In other words, people want plan flexibility, access to more providers and care that’s more tailored toward their specific medical needs.
Another factor driving the rise in MA enrollment is the growing population of individuals in the U.S. who are entering Medicare-eligibility age, according to Neuman.
“We know the boomers are now entering that age range and have been for a little while now,” he said. “That sheer influx and volume is also going to make those numbers climb. You’re going to see people enrolling in both fee-for-service and [MA], but it’s just going to be exacerbated by that volume.”
On the flip side, fee-for-service Medicare has seen a decline over the past five years. Specifically, enrollment in fee-for-service Medicare has been decreasing by 1.1%, on average.
On a geographical level, MA penetration varies across states. Currently, MA enrollment tends to be greater in major metropolitan areas, such as New York and San Francisco, and lower in rural areas.
“The reason for this is that the plan, from a purely logistical standpoint, has an opportunity to choose physicians in a concentrated area, then offer that network to a larger number of people,” Carter Bakkum, senior data analyst at Trella Health, told HHCN. “It’s worth it for the plans to concentrate in these urban areas because the time spent on their end to find the best doctors for their network is going to yield care that can include more patients.”
That said, urban markets will eventually become saturated. In order to grow, MA plans will need to focus on building networks in rural areas, according to Bakkum.
Though MA continues to grow, the bad news for providers is that these plans are not utilizing home health services as much as their fee-for-services counterparts.
One possible reason for this is because MA plans sometimes have trouble understanding home health’s role and value-add. Another reason is the authorization process that MA plans use may be limiting the home health access for enrollees, according to a 2021 report by KNG Health Consulting.
“Many of the home health care providers and researchers we interviewed indicated that there may be significant gaps in understanding what skilled home health care entails and the health benefits associated with home health care, among patients and providers outside of the home health care industry,” Elizabeth Hamlett, a senior research associate for KNG, told HHCN in August. “For example, multiple interviewees noted that home health care is often confused with community-based care, and that few are aware of the skilled nursing care or therapy services provided by home health agencies.”
This leaves providers in a precarious spot in the future, Neuman said during a recent National Association for Home Care & Hospice (NAHC) webinar.
“The danger is that there’s decreased patient volume,” he said. “This is going to happen in the near future if home health agencies are not starting to pay attention to what’s going on with regards to [MA], how patients are choosing and allocating services, and how plans are developing their networks.”
Home health providers won’t be able to solely rely on fee-for-services when it comes to patient volume. In order to lean into the rise in MA enrollment, providers will need to enhance their strategy, form relationships with the right referral partners and focus on evaluating their payer mix, according to Neuman.
Plus, providers will need to keep an eye on which states are seeing the most MA growth and opportunity.
Currently, MA utilizes home health services more than fee-for-service Medicare in at least 11 states: Oregon, Wyoming, Nebraska, Kansas, New Mexico, Iowa, Arkansas, Pennsylvania, Massachusetts, South Carolina and Delaware.
For providers that are able to adapt, working with MA plans could be a potential boon.
“There’s a real opportunity for home health agencies because MA plans actually have more flexibility in terms of how they reimburse and utilize home health services,” Bakkum said. “From a home health perspective, if you have access to data about which MA plans utilize home health services effectively, you want to target those plans, improve patient outcomes, and also increase your census.”
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