Home Health Operators Taking Stock of Allies, Enemies Amid Mounting Headwinds

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During the National Association for Home Care & Hospice’s (NAHC) Financial Management Conference this week, a stranger leaned over to me to ask if I could hear the speakers of the particular panel we were listening in to.

I told him yes, but barely. He told me he couldn’t, but that he “probably knew what they were talking about anyway.”

But I’m not sure I believe him. Yes, home health care stakeholders – and myself – tend to go over some of the same talking points over and over again. It’s usually for good reason, though I realize it can get tiring.


Having said that, this past week was filled with newfound energy – perhaps driven by the U.S. Centers for Medicare & Medicaid Services’ (CMS) 2023 home health proposed payment rule, which turned the news cycle over.

I left with a full notebook of new talking points, new observations, and on- and off-the-record comments to share with readers.

That notebook will be emptied throughout the coming weeks, but I’ll begin here, in this week’s members-only, exclusive HHCN+ Update.


All hands on deck

The “1,000-pound gorilla in the room” – as SimiTree Managing Principal Billy Simione put it – was the proposed rule, which would decrease aggregate home health payments by 4.2%, or $810 million, in 2023.

Between next year’s pending decrease, as well as billions of dollars worth of potential clawbacks from CMS due to “overpayments,” the anxiety in a room full of financial decision-makers was palpable.

Androscoggin Home Healthcare + Hospice CEO Ken Albert and NAHC President William A. Dombi mentioned the results from the analysis that NAHC had done: that if the proposed rule would turn final, 44% of home health agencies would be operating with negative margins next year.

It wasn’t everyday “whining or complaining,” as Albert said, but instead, an industry collectively coming together to try to save itself from a rate reduction that could genuinely threaten its existence.

I talked to a handful of providers throughout the week that mentioned that they were a part of that 44%.

“The rule simply cannot go through the way it is,” one CEO told me.

But late Monday, the energy shifted as The Preserving Access to Home Health Act received a bill number in the Senate. It was also introduced in the House on Thursday.

At first, I remained skeptical. In all industries, bills are introduced, excitement abounds, and then nothing comes of it.

For instance, the Choose Home Care Act, which has been a topic of interest in the industry for years now, is still sitting in Washington, D.C., waiting for someone – anyone – to push it along.

But a few things cooled my skepticism for now: Dombi’s insistence that this was just one angle of the fight, and that legal and regulatory battles against the rule would continue; his and others’ insistence that Congress members were genuinely on the home health industry’s side in this; and other executives’ enthusiasm for the bill itself.

“I’m totally bullish on this,” Albert, who is also the chair of NAHC’s board of directors, told me. “First off, the groundwork for this was laid well in advance to the meetings with members of Congress. Associations are getting much better at developing relationships. They’ve always been good, but I think we’re getting much more progressive in developing relationships with members of Congress from an advocacy standpoint.”

The next month will be critical in the fight, however. By September, CMS will already be drafting up its final rule. And in between then and now, there will be a recess for lawmakers from Washington, D.C. Generally, legislation can be slow moving. On this matter, home health care advocates can’t afford it to be.

Value versus respect

In the last two years, the value of home-based care has been crystallized. It’s more satisfactory for patients and it costs less, two points that the home health industry has known for years.

All the while, Medicare Advantage (MA) plans and CMS want home health providers to deliver their services for less.

Essentially, they’re saying: “Oh, we know your value. But we don’t think you need more money to provide that value.”

Just like a consumer going to a grocery store can recognize the value of fruits and vegetables, but still want to find the cheaper ones, the payers of home health care want to bargain the price down.

The difference is that this bargaining has an effect on the entire health care industry, as well as on the patients who are served in the home. With a rate cut like the one is proposed, less home health providers could be around to provide any of the the value they do now.

“They recognize the value of home health in that regard,” Dombi told me. “But they think they can get it for a cheaper price. They think, if they can get the same quality for the same or a lower price, that they should.”

The Home Health Value-Based Purchasing (HHVBP) Model is a clear example of this. If there were a mock trial based on the proposed rule (there could be a real one), the home health industry would undoubtedly point to HHVBP, which is set to save Medicare billions in the next decade.

HHVBP is one of the only successful cost-saving models that The Center for Medicare & Medicaid Innovation (CMMI) has tested. And CMS is banking on it to save more money in the future.

At the same time, they’re aiming to cut rates.

“It is absolutely odd for CMS to put so much investment into expanding the HHVBP nationwide … and then they pull resources away from the providers,” Dombi said.

All the while, providers across the country have already poured thousands of dollars into preparing for this model mandated by CMS.

Are middle men the problem?

The three legs of the stool for home health care industry are as follows: fee-for-service (FFS) Medicare, MA and Medicaid.

Anyone suggesting that FFS Medicare rates are too high isn’t paying attention to the other stools, advocates argue. MA and Medicaid simply pay far too meager of rates for the FFS stool to be weakened, and for the chair to still stand afterward.

Over this past week, that was the message. But before that, at past events, providers were fed up with that other stool – MA – and lasered in on how to enhance its sturdiness.

LHC Group Inc. (Nasdaq: LHCG) CEO Keith Myers took us back to the MA discussion on Monday, as his company’s sale to UnitedHealth Group (NYSE: UNH) is pending.

“I think we’ve done a lot more with managed care [because of our JVs with hospitals], and I have really good relationships with executives,” Myers said. “But I think our biggest problem [is] the conveners in the middle of all of this.”

The conveners are the middle men between providers and plans. To name a few: CareCentrix, myNEXUS and naviHealth.

Those three have recently been bought up by these entities: Walgreens Boots Alliance (Nasdaq: WBA), Elevance Health (NYSE: ELV) and UnitedHealth Group’s Optum, respectively.

There’s no certainty that Myers is right, and that these conveners’ existence are to blame for worse rates for home health providers’ services. But there was certainly a lot of momentum around that idea as I asked around the rest of the week.

“We do have to explore whether they are superfluous, if nothing else,” Albert told me.

Moving forward, I also plan to take this idea straight to the conveners, which have painted a far different picture of themselves in the past.

Either way, this doesn’t seem like a topic that will be going away.

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