Home Health Providers Are ‘Getting Their Clocks Cleaned’ on MA, Grandstanding on Risk-Sharing

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A trip to the Home Care 100 conference in Phoenix, Arizona, this past week was refreshing.

It was an escape from the frigid Chicago temperatures. It offered the opportunity to talk to many of the faces that make up the home-based care industry, in person, for the first time in a long time.

But most of all, it allowed me to witness individual opinions and industry trends – that may have been percolating underground for some time – coming to the surface.


Each evening, I took the ride back to the airport-adjacent Double Tree from The Phoenician.

In addition to feeling like a character in the movie “Parasite” – The Phoenician had been booked up by the time I scheduled my flight, and the Double Tree offered no chocolate chip cookies, to make matters worse – I pondered what I had learned that day about the industry.

Every day brought more understanding. Through dozens of one-one-one conversations with thought leaders and regular attendees alike, plus a slew of panel discussions, I left Phoenix with a new thesis on where the industry stands.


That thesis is this: Home-based care operators are fervently aligned on certain subjects in the industry, like the difficulty of contracting with Medicare Advantage (MA) plans and the need to take on risk in the future, but they have contrasting views on issues around the margins.

The MA plan problem

Bruce Greenstein, LHC Group Inc.’s (Nasdaq: LHCG) chief strategy and innovation officer, offered up Home Care 100’s “shot heard ‘round the conference” on the first panel of the week.

It came as the topic of MA was introduced, with the context being MA enrollment is expected to hit 50% of the overall Medicare population in coming years.

Greenstein found it worth noting that the rates MA pays for home health care are far worse than traditional fee-for-service Medicare, and that all home health providers “are complicit” in allowing that to happen.

“We’re losing. This is a really serious moment in time for all of us,” Greenstein said. “I’ve been up on these panels and [at] endless conferences talking about the benefits of value-based care and all these cool programs that we’re doing. … But I have to say, we’ve been glossing over this as an industry for far too long.”

“We are getting our clocks cleaned,” he added. “And we just tend not to talk about it.”

Greenstein was sitting on a panel with Kindred at Home President and CEO David Causby, which set up a slightly awkward dynamic. Kindred was fully acquired by one of the largest MA plans in the country – Humana Inc. (NYSE: HUM) – last year.

Kindred – soon to become “CenterWell Home Health” underneath Humana’s umbrella – has an interesting part to play in the issue Greenstein highlighted. One of the largest home health agencies, after all, is now a part of one of the largest MA plans.

“We are getting our clocks cleaned, and we just tend not to talk about it.”

Bruce Greenstein, chief strategy and innovation officer, LHC Group

The company is not to blame for the MA-home health reimbursement issues. They’re more just as “complicit” – as Greenstein put it – as everyone else in the industry.

But the question is whether Kindred alone will benefit in the future from that MA relationship, or if it could be a leader in making a difference. In the near term, neither is likely. Causby did say he hoped Humana would be able to lead the way in the effort to turn the tide on substandard rates being paid to home health providers.

“We have become commoditized price-takers in providing staffing for managed care companies and taking care of people in the home,” Greenstein said. “We have an incredible skillset and the capabilities to manage care across a continuum. We get asked to do three or four visits, our data gets co-opted by managed care companies, we get paid very little for what we do in relative terms, and there’s not something that I see on the horizon that’s [changing that].”

Some plans are better than others. But overall, the recognition of the value of home health care has not yet been acknowledged, Greenstein said.

The market share that the home health sector has is large, but not large enough to have a legitimate negotiation with the plans, he said.

“There is always asymmetric dictation of what the terms of the relationship will be, except for a couple pockets of the country where there’s highly concentrated provider power,” Greenstein continued. “If you’re on the MA side, you [have a] look at what that concentration of power – and the elixir of being able to abuse that power – looks like.”

Greenstein had actually offered up similar commentary at HHCN’s FUTURE event in September, but for whatever reason, it did not stir the crowd the way it did this time.

Perhaps it was Causby’s presence. He responded by saying Kindred, too, had faced those issues.

“I always say the most powerful word is ‘No,’” Causby said. “I think the industry needs to rally around together to not accept the substandard rates, because then you start running into margin and quality issues. Until the entire industry comes up and refuses to take lower than the needed reimbursement to take care of these patients, we’re going to have this problem.”

Causby is absolutely correct on the surface. All it would take is all of the home health providers in the U.S. to say no in order to immediately put pressure on these plans.

But in practice, that’s unlikely. No matter how many providers come together – large or small – there will probably always be providers out there willing to accept those lower rates for one reason or another.

“I think the industry needs to rally around together to not accept the substandard rates, because then you start running into margin and quality issues.”

David Causby, president and CEO, Kindred at Home

Later that morning, the president and CEO of Visiting Nurse Association Health Group, Dr. Steve Landers, suggested a fan club should be started for Greenstein because of his comments.

“I’m starting the Bruce Greenstein fan club as soon as we wrap up this meeting,” Landers said. “Where is this policing and oversight, and keeping the squirrel out of the bird feeder, on the Medicare Advantage side? We’ve got to make sure that … people are having their feet held to the fire.”

Others echoed the same sentiment later in the day.

“He’s right. I’m just glad someone said it, because I think we all agree,” another executive from a major home-based care organization told me.

It seemed Greenstein’s diagnosis of the problem was correct, but his open recognition of it was really what got other attendees talking the rest of the day. That, in itself, may have been a start to addressing the problem in the future.

We’re still talking about staffing

Staffing is the most hot-button issue in the industry still. Despite that, providers have grown tired talking about it.

At times, they’ll even tell HHCN, “We get it,” as we pump out story after story on the subject.

But there’s a reason why we write those stories.

In another poll taken during a panel, the majority of attendees said the staffing situation was likely to “get worse before it gets better.” A smaller amount believed it would stay the same, and almost no one believed it would immediately get better.

Barb Jacobsmeyer, the CEO of Encompass Health’s (NYSE: EHC) home health and hospice segment, later filled me in on her rosier view of the situation, at least for the future “Enhabit Home Health & Hospice.”

“We’ve had a successful couple of quarters here,” she told me. “It makes me excited that we can kind of turn the page, quit talking about turnover and talk about retention. I think that that’s where it’s at. And it’s not meant to make it sound easy. I don’t think it’s easy at all. I think it’s really, really hard. But I think it’s doable.”

Other attendees felt like any talk of growth at the conference was overshadowed by the dark cloud that is the staffing situation.

Talking about demand and opportunity before staffing felt like putting the cart before the horse, multiple executives told me.

Risk-sharing opportunities

Entering into risk-sharing agreements is another buzz topic in the industry, one that was elevated at the conference.

One person told me, however, that it’s still just that – a topic, or an idea. Right now, they said, risk-based models represent little to nothing for providers in terms of their overall revenue.

Anyone suggesting otherwise was simply grandstanding, they told me.

And while that may be true, on another poll, attendees overwhelmingly said that taking on risk was “absolutely critical” moving forward.

Plus, to the aforementioned point, if the economics aren’t working with MA plans, providers have to begin taking on risk as a means of survival.

“For the small mom-and-pop home health providers, it might be more difficult, and it probably won’t work right now,” Chris Dodd, the CMO of the at-home primary care provider PopHealthCare, told me. “But for the larger players, I think it’s much easier. … They certainly have a reasonable concentration of population, the ones you need [to pull this off].”

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