Humana Set To Add 450K More Patients To Value-Based Home Health Business

Some of the largest home health companies in the country have had the chance now to voice opinions on the final payment rule for 2023. Most all of them are dissatisfied it.

But what is unequivocally true is that the near-term relief it provides – versus what was expected – is major for companies across the country. It also, of course, gives those same providers and advocates even more time to stymie future cuts.

For Humana Inc. (NYSE: HUM), for instance, the payment cut delays in the final rule – released Monday – will have a relatively positive impact on the company’s 2023 financials.


“That would’ve been about a $30 million hit relative to our expectations,” Humana CFO Susan Diamond said on a third quarter earnings call Wednesday. “With the final rule coming out at a 0.7% [hike], obviously that headwind is no longer an issue and it would be slightly positive relative to what we thought at the time of the [proposed rule].”

Humana’s home health entity – CenterWell Home Health, formerly Kindred at Home – has over 350 locations in 38 states.

The company also commented further on what it wants to do with its home health arm when it comes to Medicare Advantage. Multiple other entities this week – such as Amedisys (Nasdaq: AMED) and Enhabit Inc. (NYSE: EHAB) – have commented on the contracts they were forming with MA plans to be better paid for the positive outcomes they were providing.


Because Humana has both a home health arm and a MA plan under its umbrella, that gives it a bit of an advantage on that particular home health-MA issue.

“The team is working on implementing a full value-based model, which is inclusive of utilization management, network management and clinical advancement to take full capitated risk on Medicare patients,” Diamond said. “We expect to have 15% of our members covered by that model by the end of the year.”

That 15% represents an additional 450,000 MA members being covered by the value-based home health model, according to the company.

Humana essentially will be offering value-based home health to its own MA members initially, and then will look to offer similar value-based structure to other MA plans outside its network moving forward.

“We’ll look to structure that contractually where there’s some component of a fee-for-service payment, but then also participate in the savings that [home health] can help drive in terms of total cost of care going forward under a value-based payment model,” Diamond said.

For the home health business overall, episodic admissions for the third quarter were up 5.1% year over year, while total admissions were up 6.4% year over year. Year to date, episodic admissions are up 3.9%, while total admissions are up 5.4%.

In total, the company reported revenues of $22.8 billion in the third quarter, a 10% year-over-year increase.

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