Home health providers know Medicare Advantage (MA) plans will be a part of the future. The task now is to prove their value to those plans.
“These insurance companies are not what I would consider dumb care companies anymore,” Beau Sorensen, COO of First Choice Home Health & Hospice, said during a National Association for Home Care & Hospice (NAHC) webinar Tuesday. “They don’t want to just give you money to do whatever you want to do. They want you to be a part of their care team and if you want to be a part of those networks, you have to show the value.”
The days of providers coming to the negotiating table to say, “We give great care and keep people out of the hospital” are over.
“That right there, I wouldn’t even say are table stakes,” Sorensen said. “It’s what everyone says. You have to go beyond that. You have to have metrics that back up your claims because that’s what insurance companies really care about.”
NAHC has been working over the past several months with its members on navigating the MA landscape.
One of the ways to succeed in this new payer environment is to understand what plans want.
The single most important metric MA plans look at when considering a contract with home health agencies is hospitalization percentage, Sorensen said.
“They care about hospitalizations more than any other single item,” Sorensen said. “They look at Medicare Compare as something that is agnostic and something that can’t have the thumb on the dial.”
Other benchmarks and metrics that providers should put an emphasis on are Home Health CAHP scores, 30-day rehospitalizations, internal satisfaction surveys, length of stay times and visits per period, among others.
“Your HH CAHP scores — they want their members to be happy with you,” Sorensen said. “Your visits per period — those are really important with per-visit insurers. They want to know that you can give great care in as few visits as possible.”
How MA plans make money
It’s also important for providers to know how these insurers plan to make money.
Jordan Holland, VP of value-based contracting at Compasus, said there are essentially three ways MA plans go at it: managing unit costs, managing utilization and reducing total cost of care.
“I think it’s important to understand each one of those buckets, what those mean for the MA plan and what they mean for the provider,” Holland said. “Managing unit cost? That’s an easy win on the MA plan side. You’re almost guaranteed to reduce total cost if you’re paying less for the services being provided. For the provider side, that’s no good. Now we have lower funding to deliver the same services.”
If an MA plan goes through a more restrictive authorization process than traditional Medicare as a way to manage utilization, that could reduce the costs for home health services.
“But if home health is necessary to benefit the patient and keep that patient out of the hospital, you could certainly see how it would increase overall total costs by reducing just one service category itself,” Holland said.
Another option for plans — and the most difficult to achieve — is to reduce the total cost through value-based initiatives.
“Certainly value-based initiatives for MA plans can reduce total costs, but only if those initiatives actually drive the anticipated total cost reductions themselves,” Holland said. “This is the evergreen challenge for value-based care. How do you know what activities or initiatives are effective and efficient in reducing total costs?”
The provider impact of the third option, Holland outlined, is an increased accountability in outcomes and some level of payment risk.
The easy button for MA plans is clearly the first option. That’s also the worst option for providers.
“The more difficult one, but the best one across all areas, would be reducing total cost through value-based initiatives,” Holland said. “That ends up becoming the goal for how we end up working with MA plans in the future.”
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