How Amedisys Approaches Its Negotiations With Medicare Advantage Plans

Amedisys Inc. (Nasdaq: AMED) could be a part of UnitedHealth Group (NYSE: UNH) very soon. But that doesn’t mean it’s shielded from the realities of negotiations with Medicare Advantage (MA) plans.

Its chief strategy officer, Nick Muscato, is one of a few home health leaders that have recently told Home Health Care News about MA plans not keeping up with the cost of care.

“There are a number of plans that pay per visit that have not given us a rate increase in one, two, three, four or even five years,” Muscato said. “Then they actually see the data. Clinician costs are up 37% in the last five years, [for instance]. When they see that data, it’s a little more compelling, but the cost has significantly outpaced the reimbursement increases.”


Based in Baton Rouge, Louisiana, Amedisys has 16,500 employees and over 522 care centers in 37 states and the District of Columbia. The company provides home health, hospice and high-acuity care in the home through its subsidiary, Contessa.

In late June, UnitedHealth Group’s Optum announced that it had agreed to acquire Amedisys. The two companies expect the deal to close in 2024.

As a provider with larger scale, it’s easier for Amedisys to get to the table with plans, but that doesn’t always guarantee success.


“I would say the tougher part is the communication cascade within the plan,” Muscato said. “You can have a CEO-level conversation, and they get it: home is the lowest setting for cost of care. They want as many patients to be sent there. But then it gets down to the ancillary contractor who is paid based on unit cost savings. So you still have some situations where they’re trying to grind out additional savings by cutting home health rates.”

It’s Muscato’s belief that the bigger MA plans are really starting to get it, and that there will be less of that “communication cascade” down the line.

“I think the bigger plans are further along in their provider strategies,” he said. “They have a different view, so you have a little less of that type of situation. But we still run into that sometimes.”

Some plans are obviously better than others when it comes to home health care.

And Amedisys never shares with plans the rates or set-ups they have with other plans. But they can show – based on internal experience and data – what they believe will work best for both parties.

That’s another strategy that other home health providers could take from Amedisys – pitching multiple different solutions to plans.

“We’re always pitching multiple models to them,” Muscato said. “It’s a per-visit rate increase, which is the least interesting, but we need it. But also, saying we would like to do a case rate with them. We also would like to talk about a palliative care arrangement, for instance. So, it’s not always just a single-threaded sale to them. There’s a number of different opportunities.”

Ultimately, Muscato shares the belief with others that it’s a tough payment environment for home health providers right now.

He also believes, however, that providers can extract opportunity from that.

“I think whenever there’s challenges, that also presents opportunities for continued differentiation,” he said.

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