Where Providers Have Leverage In Negotiations With Medicare Advantage Plans

To thrive and survive in a value-based care world, post-acute care providers need to be able to partner – and pivot – on the fly.

Convincing payers of their worth is undoubtedly the first step, however. Quality home-based care providers have significant worth, they just need to be able to show it.

But where providers do have leverage is demographics. Payers need home-based care now, and they’ll need it even more in the future.


“One payer that we work with in Ohio has 2.5 million members,” Anthony Evans, president of Pure Healthcare, said during a panel at LeadingAge’s annual conference this week. “Even a program as large as we are, it’s still 2,000 people. We can show them great outcomes, great savings and achieve our objectives — but we’re still a drop in the bucket to a typical payer. Because of that, we’ve been investing in partnerships, bringing in nonprofits and other provider types so that we can create a critical mass of payers to engage with.”

Pure Healthcare is an Ohio-based provider that offers home health, hospice, medical transport and other population health services.

In order to attract more Medicare Advantage business, Evans and his team have started to focus on clinical alignment by “preparing for value” as the state’s demographics — along with the country’s — show a need for alternative sites of care.

Source: Pure Healthcare

“You have to recognize that pretty quickly, the current health care infrastructure we have today is not prepared for that kind of aging,” Evans said. “We also don’t have a great fee-for-service structure for us as providers to adjust to that demand. We saw those demographic shifts as a huge opportunity for us to step in and build a safety net that is more effective. One that’s not going to get done with just facility-based providers.”

MA strategies

Evans confirmed that, in his experience, being clear about what value his company can offer is key.

It’s also important to let payers know that the goal is not to open up their checkbooks, but to have them reinvest their dollars more efficiently.

“When we go to a payer and we say, ‘Help us move to value. As the experts in long-term care, LTSS and chronic disease, put us in a position to impact things like that,’” Evans said. “All we’re really asking them to do is unlock dollars that are being spent somewhere else. We’re not asking them to create new dollars. We’re asking them to unlock the dollars that are uncoordinated and live in that avoidable spend bucket.”

Payers, Evans admitted, get antsy when providers talk about incremental benefits that add to their own benefit structure. Payers are hard to budge on certain things. They’re oftentimes set in their ways.

What the provider should do is find a way, with data and with value proposition, to fit into that structure.

“All we’re saying is, as a group of providers, give us an opportunity to impact what happens every day,” Evans said. “Especially those things that are avoidable. There’s a huge opportunity, particularly for those of us who have experience in chronic disease.”

Providers have to be comfortable with having innovative conversations with payers in order to get what they want, Evans said.

He recalled a conversation he recently had with a provider in Georgia that was negotiating a Medicare Advantage contract with Humana Inc. (NYSE: HUM).

“Humana, who is pretty notorious for not changing the way they do things, offered them 85% of Medicare,” Evans said. “So I asked, ‘What does that do from a provider perspective to take 15% less than what they were getting? What value is that to the provider? Then it was crickets on the other end.”

By asking for a way to make up the 15% difference, Humana came back with a different plan that would move the provider to a value-based arrangement.

However, Humana couldn’t do it right away.

“So they said, ‘Since you asked that, we’ll give you the 100% this year,’” Evans said. “Those are the kinds of conversations you should be having. It has to be collaborative. If the contract terms can’t be changed, then I at least want to include what the future holds for our roadmap to more value for this organization. Because we can’t just sign a contract that cuts our rates and leaves it at that.”

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