Why MA Penetration’s State-By-State Variance Complicates Home Health Providers’ Outlook

Everyone in the home-based care world hears that Medicare Advantage is becoming the dominant payer. But that’s not always true in certain regions, states or counties.

It’s just not always clear how starkly MA is being favored over fee-for-service Medicare.

Over the next five years, more than half of Medicare beneficiaries are projected to be underneath an MA plan, for instance. But Lindsay Doak, the director of research at BerryDunn, believes even that may be an understated estimate. 


“I actually think that this is a very conservative estimate,” Doak said. “But we are probably going to see at least 61% of those who select Medicare to choose that Medicare Advantage program.”

Doak painted the MA picture for home-based care providers on a webinar hosted by the National Association for Home Care & Hospice (NAHC) last week.

This drastic change is already underway, and home health providers – and home care providers, for that matter – are experiencing difficulty navigating it.


“As an industry, home health care has to be prepared for this growth,” Doak said. “There’s a lot of forecasting we do, [and] it’s to help home health and hospice organizations prepare for what their patient mix is going to look like over the next decade.”

Part of the problem is that many home health providers may not feel the pressure to get into MA just yet because MA penetration does vary across the country.

“It’s not an even number across every state,” Doak said. “It’s very regional, and it’s fascinating to look at the numbers.”

MA penetration is significant across the east coast, for instance. Plans have a larger presence in higher-populated areas, so also in cities. But much of the Midwest remains dominated by Medicare fee for service.

Collecting that Medicare fee-for-service business while avoiding the struggles of meeting MA head on is still the way of doing things for the vast majority of providers across the country.

But that could be delaying the inevitable. It could also be the difference between surviving five to ten years down the line or not.

“I know that there’s been a lot of talk – good or bad – about Medicare Advantage,” Doak said. “I’ve spoken to organizations, and they’ve said, ‘I don’t want Medicare Advantage,’ or ‘I need to make sure that’s it’s a minimal part of my share,’ or ‘It’s not big in my state, so I don’t need to worry about it right now.’ And the one thing I’m hoping to relay with all of this data is that it’s not something that you can just avoid.”

While MA has the upper hand on Medicare fee for service, and – to some extent – home health providers in negotiations, agencies are in a better position than ever from a value proposition standpoint.

The U.S. Centers for Medicare & Medicaid Services (CMS) is looking to decrease spending on MA plans. In turn, plans are looking at ways to control post-acute spend. The best way to do that, many believe, is through home-based care.

Now is not the time to think about how to avoid the trend, Doak said, but instead, how to leverage one’s own capabilities to capitalize off of it.

“[MA plans] are interested in home health right now,” Doak said. “Home health is a way to reduce the cost of care, especially for those patients with chronic conditions. And in home health, we have a lot of patients with chronic conditions. You see them every day.”

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