Amid Higher MA Scrutiny, Humana Remains Focused On Home Health Growth

After the Centers for Medicare & Medicaid Services (CMS) released a final rule that poses sizable risk to its Medicare Advantage business, Humana Inc. (NYSE: HUM) leaders insisted panic was not necessary.

“The rule did not provide the details needed to fully understand the potential impact of the future audits,” Humana CEO Bruce Broussard said Wednesday during the company’s fourth-quarter earnings call Wednesday. “We are disappointed CMS’ final rule did not include a fee-for-service adjuster in the process, which we believe is necessary to determine appropriate payment amounts to MA organizations. We are considering all our options to address or challenge this admission and obtain clarity about our compliance obligations. With that said, we are committed to working productively with CMS to ensure the integrity of the program is maintained.”

All the while, the company continued to tout its home health growth.


CenterWell Home Health’s fee-for-service home health admissions were up 9.1% year over year, and up 6.3% for the full year.

Formerly Kindred at Home, CenterWell Home Health has more than 350 locations in 38 states.

“That is in line with our expectations of mid-single-digit growth,” Humana CFO Susan Diamond said on the call.


The company also announced new leaders. Most relevant is the hiring of Dr. Sanjay Shetty as the president of CenterWell. Medicare President George Renaudin is also now going to lead Humana’s Medicaid efforts.

On Shetty’s end, he comes from Steward Health Care System, where he currently serves as president. He will begin his new role on April 1.

In his current role, Shetty leads day-to-day operations and strategy for Steward, which is a national, integrated health system that includes 39 hospitals, a multispecialty medical group and an accountable care organization.

“This newly created role comes as we continue to meaningfully expand our CenterWell capabilities, strengthening our payer-agnostic platform and integrating the clinical experiences for patients across the CenterWell platform,” Broussard said.

While fee for service remains a heavy business line for CenterWell, the company is beginning to focus more on MA-based home health. It is in a good position to do so.

“While we have strategies in place to continue to take share in fee-for-service Medicare, we do acknowledge it is a shrinking market with the increasing penetration of Medicare Advantage,” Diamond said. “Accordingly, our projected admission growth for 2023 reflects a slight decline in fee-for-service Medicare admissions year over year, more than offset by strong growth in Medicare Advantage.”

Humana has been consistent on its desire to have 40% of MA members underneath its value-based model by 2025.

By the end of 2023, the company says it will have an additional one million members under that model. That includes home health patients.

“In the home, we have continued to expand our value-based model, which coordinates care and optimizes spend across home health, DME and infusion services,” Broussard said. “We are now supporting approximately 15% of our MA members with the model, expanding coverage to an additional 433,000 members during the fourth quarter. We remain on track to cover approximately 40% of our MA members with value-based model by 2025.”

Last August, the company announced that it had officially completed its divestiture of Kindred at Home’s hospice and personal care divisions to Clayton, Dubilier & Rice (CD&R). CD&R specifically acquired 60% of those assets.

Because of that, Diamond noted that revenue will fall in home health care over the next year.

She also said the focus is on driving organic growth, specifically in primary care and home health care, but also left the door open for future M&A in those areas.

“We will continue to prioritize investments to drive organic growth,” Diamond said. “From an M&A perspective, we remain focused on opportunities to enhance our CenterWell capabilities with a particular focus on growing our primary care and home businesses.”

Overall, the company reported revenues of $22.4 billion in the fourth quarter, a near-7% year-over-year increase. For the full year, the company brought in $92.9 billion, a 12% increase.

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