Home health providers should keep a close eye on the rise and popularity of managed care plans under Medicare Advantage in 2023.
That was one of the many messages from Bill Dombi, president of the National Association for Home Care & Hospice (NAHC), during Wednesday’s webinar with Netsmart.
“There is a strong sentiment of privatizing the Medicare program and offering it through managed care plans,” Dombi said. “Although the bloom may be off the rose somewhat, and some of the people who have been long standing proponents for Medicare Advantage plans are taking a closer look at how they’re operating.”
Dombi referenced a presentation by the Medicare Payment Advisory Commission (MedPAC) last week that showed the cost of enrolling people in Medicare Advantage plans exceeds the likely cost of the health care they would have received in a traditional Medicare program.
“106% of that cost, in an aggregate sense,” Dombi said. “The future, at the moment, is not a runaway train, but it’s moving under a full head of steam.”
For many, the marketing behind managed care Medicare Advantage plans has been almost hard to ignore which has undoubtedly given way to the popularity of MA.
“Beyond the mega trend of workforce and everything that comes with that, you have to recognize that managed care is growing,” Dombi said. “Joe Namath, Jimmy Walker and Bill Shatner have all had some success in recruiting people to join the Medicare Advantage plan over traditional Medicare. We’re continuing to see the proportion of traditional Medicare patients in home care shrink as the Medicare Advantage population grows.”
Fewer people enrolled in traditional Medicare today than they did in 2014, according to NAHC. That trend is due to, in part, the sudden growth of Medicare Advantage.
“The most recent numbers have us knocking on the door for 50% of the Medicare enrollees to be in traditional and 50% to be in the Medicare Advantage program,” Dombi said. “8.8 million additional enrollees in Medicare and 8.8 million additional enrollees in Medicare Advantage. You’re going to need a whole different business model for at least home health services.”
Although Medicare Advantage growth will affect reimbursement plans, it also creates opportunities for home health agencies.
“The value proposition with managed care, in particular with Medicare Advantage, that ultimately drives the action,” Dombi said. “We have to be there preparing to present that value proposition.”
Case in point: in the early stages of the pandemic, it was managed care that came up with ways of reimbursing home health agencies for virtual visits, Dombi noted.
On the other hand, Dombi is more skeptical about Medicare Advantage as it pertains to home care,he indicated, based on some early returns.
“I still think we need a very cautious eye on Medicare Advantage plans, at least as they’re related to home care services,” Dombi said. “We have not seen the kind of utilization, overall management and certainly their pricing that they offer to the providers of the services are not financially sustainable.”
Now, the pressure is on for Medicare Advantage, not only from TV and traditional marketing but both sides of Congress. That’s something that providers should expect will continue.
“Policy people, members of Congress and regulators are also very much promoting it and it’s not party-specific,” Dombi said.
Dombi also didn’t pass up an opportunity to criticize MedPAC, who recently voted to recommend to CMS that the Medicare base payment rate for home health care be reduced by 7% for CY 2024.
“Our dear friends at MedPAC, or as some of us have relabeled as the Medicare payment reduction commission, needs to modernize its thinking,” Dombi said. “It needs to be looking at the economic models that home health care, hospice and other health care providers actually operate in. In the meantime, they keep proposing these payment rates. I believe that’s due to a very siloed mindset.”