4 Key Changes Enhabit Has Made On Medicare Advantage, Staffing Strategies

Staying ahead on recruiting and Medicare Advantage (MA) strategy are two top priorities for Enhabit Inc. (NYSE: EHAB) over the next few years.

Despite a rocky start on the public market earlier this year, Enhabit CEO Barb Jacobsmeyer said the company has made significant changes to its benefits package for new and existing employees after getting feedback on their needs.

Speaking on Thursday at the Wells Fargo Healthcare Conference, Jacobsmeyer said Enhabit made three significant changes to its human resources approach.


The first was appointing a chief human resource officer to the executive team. Jacobsmeyer said that when she got to Dallas with Encompass Health Corporation (NYSE: EHC), she was surprised that the highest level of leadership in HR was a vice president.

“That was kind of surprising knowing that we’re all about our people,” she said. “[Tanya Marion] joined us in January and comes with over 25 years of health care experience. That’s allowed us to really focus on not only being competitive from a talent acquisition standpoint, but also on retention, as well as blending in our leadership development and our overall employee development.”

Enhabit also invested about $8.5 million in mileage reimbursement for its employees after gas prices skyrocketed this year.


“We got feedback from our talent acquisition team telling us that we were not competitive on mileage reimbursement,” Jacobsmeyer said. “That’s a really key part of the benefits for this mobile workforce.”

The third change Enhabit made was to improve employees’ portion of health care benefit premium costs.

This summer, Enhabit completed its spinoff from Encompass Health. Even though external factors didn’t make the recent months easy, there is still much to be celebrated, Jacobsmeyer said.

For instance, of the 34 states that Enhabit serves, there are 11 states where the company is either the No. 1 or No. 2 home health provider in terms of market share.

Quality outcome numbers are also strong, which is being used as leverage when at the table with payers.

“When you look at our quality outcomes, we’re about 200 basis points below the national average on readmissions, and that’s an important metric, particularly as we’re talking to the payers,” Jacobsmeyer said.

The home health and hospice provider is also bullish on Medicare Advantage. Enhabit has traditionally focused mainly on traditional Medicare. However, after discussions with her sales teams, Jacobsmeyer found that some referral sources will shut out Enhabit because they know they’re only coming for traditional Medicare patients.

“Just to be able to reopen those doors, we had to get more involved with Medicare Advantage,” Jacobsmeyer said. “When we look at the communities we serve today, from 2020 to 2021, we’ve seen an 11% increase in Medicare Advantage beneficiaries and a 4% decline in traditional Medicare. So we have to be at the table with them.”

Enhabit currency has several regional and local MA contracts and one larger, national contract.

The talks Enhabit has been having now with those national payers revolve around being paid fairly and moving towards episodic or case rates, but Jacobsmeyer understands there is a give and take.

“We’re going to commit to timely initiation of care, we’ll commit to taking more MA patients and help close some of the gaps in care,” she said. “We already have really great and low readmission rates. We challenge them to look at their own data and [consider] what other providers are doing, because a readmission costs them money.”

Enhabit is fully at the table for Medicare Advantage. Jacobsmeyer believes it’s a good time to be there.

“I think we have their ear because they have acknowledged that they are having some issues with access for their members,” she said. “It’s a good time to be at the table with them.”

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