Recent Medicare Advantage Developments Bode Well For Home Health Providers

Home health providers have griped with their Medicare Advantage (MA) plan partners for years over poor rates, claim denials and increased administrative burden.

Providers have stopped short of banding together to deny coverage for these plans, but some of the top companies have reallocated capacity to “preferred payers.”

In the end, though, it may not be the provider push that’s mattered most. That push, instead, may be from other parties – including patients.

A few of the largest insurers in the country have been hit with class-action lawsuits recently. For home health providers, the story is less about the lawsuits themselves, and more about what they may mean for future relationships with MA plans.

Humana Inc. (NYSE: HUM) was hit with a class-action lawsuit Tuesday, from MA beneficiaries alleging that the company “systematically deploys an AI algorithm to prematurely, and in bad faith, discontinue payment for health care services for elderly individuals with serious diseases and injuries.”

UnitedHealth Group (NYSE: UNH) was hit with a similar lawsuit last month. Cigna Group (NYSE: CI) was hit with one earlier this year, also over claim denials.

At the same time, Cigna, Blue Cross Blue Shield and others have begun to shed certain prior authorization requirements.

All of the pressure being placed on MA plans – and their reaction to it – could make a meaningful difference for home health providers in the future.

National Association for Home Care & Hospice (NAHC) President William A. Dombi called home health providers’ uphill battle in MA a “generational battle.”

But it’s better characterized as a war. And with the recent developments in MA, the home health industry may finally be adding a few battles to its win column.

I explain further in this week’s exclusive, members-only HHCN+ Update.

Baby steps

The irony of the home health industry’s “war” against MA is that the end goal would be to have a harmonious relationship with those plans.

All sides of the disputes are counting on it: the providers, the plans, and – most importantly – the patients.

It’s akin to Rocky IV, in which the viewer sees the protagonist – Rocky Balboa – training for, and fighting against, a seemingly insurmountable Soviet foe in Ivan Drago.

But, by the end, Balboa has won the fight and won the Soviets over: “If I can change, and you can change, everybody can change,” he says.

We’re not there just yet, however. This will take time, but it’s worth taking stock of the wins when they materialize.

As the class-action lawsuits unfold, home health providers are – to some extent – having their issues with plans’ claim denials validated.

“Whether they’re using AI or not, their back-office revenue cycle operations are trained to intentionally request additional medical records to delay and defer payments, because what they’re hoping is that the provider misses the 30-day response window on replying to all of these requests for medical records, certification of eligibility, etc.,” Intrepid USA CEO John Kunysz told me this week. “Because, if you miss it, and you don’t turn it in 30 days, you get a, ‘Oh, sorry, claim is denied.’”

The Dallas-based Intrepid is a home health and hospice provider with more than 60 locations across 16 states.

Over 50% of Medicare beneficiaries are now under an MA plan as opposed to traditional Medicare, according to Kaiser Family Foundation. Additionally, home health providers have told HHCN that, on average, MA plans pay about 60%-70% of what traditional Medicare does for services.

Even so, Kunysz said that Intrepid’s revenue cycle management team spends 7 to 8 times more time – which also means money – on MA and commercial claims compared to traditional Medicare.

What patients want out of their lawsuits is, in essence, the same as what providers have wanted: for plans to pay properly – and in a reasonable time frame – for services that are needed.

All of the insurers thus far have denied unethical use of AI to deny care or payment.

“We use various tools, including augmented intelligence, to expedite and approve utilization management requests and ensure that patients receive high-quality, safe and efficient care,” a Humana spokesperson told me this week. “By definition, augmented intelligence maintains a ‘human in the loop’ decision-making whenever AI is utilized. Coverage decisions are made based on the health care needs of patients, medical judgment from doctors and clinicians, and guidelines put in place by CMS. It’s important to note that adverse coverage decisions are only made by physician medical directors.”

Either way, the lawsuits are likely to force insurers to reconsider why – and how – they deny claims. UnitedHealth Group has already done away with its “naviHealth” brand, which was the convener allegedly responsible for the AI that helped deny care.

Outside of those lawsuits, and on the other side of care, is the prior authorization issue.

Cigna, Blue Cross Blue Shield and other plans stripping those requirements is an acknowledgment that many of those burdensome requirements weren’t needed in the first place.

“By removing prior authorization requirements for home care services, we’ll help hospitals to expedite discharges at a time when many are struggling with overcrowding,” BCBS of Massachusetts Chief Medical Officer Dr. Sandhya Rao told HHCN last month. “This change will also reduce delays for Blue Cross members ready to transition their care from hospital to home.”

Cigna, meanwhile, is in the process of removing prior authorization for nearly 500 additional codes for its Medicare Advantage plans.

As Rao said, prior authorization ends up being a problem for hospitals. It’s also a problem for hospitals’ post-acute partners, as well as the patients in the middle.

“You end up having a situation where patients do not get timely authorizations for starts of care,” Kunysz said. “They have a medical need that sometimes isn’t addressed for seven to 14 days, with the length of time that they sit on authorizations.”

It’s also worth mentioning that MA plans are increasingly becoming the subject of more regulatory oversight.

In the end, it may not be home health providers solely that get MA plans to change their ways.

They do have allies, though. And they’ll take the baby steps of progress, however they can get them. 

“I was on a call with an executive from one of the largest MA organizations yesterday, and I think MA plans have woken up to the fact that the rejection rates are high,” VitalCaring President Luke James told me last month. “And that there’s a clear delineation in spend, readmissions and ER utilization for patients that have orders for home health coming out of a hospital – between those that actually receive care and those that don’t.”