For Home Care Providers Still Invested In Medicare Advantage Business, Patience Is Wearing Thin

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Around 2019, Medicare Advantage (MA) was all the rave among home care providers.

That’s because, in 2018 and 2019, two pathways opened for MA plans to provide more benefits to beneficiaries: the primarily health-related benefit pathway and the Special Supplemental Benefits for the Chronically Ill (SSBCI) pathway.

Included in those were plenty of areas of opportunity for personal home care providers to step in and become more involved with the Medicare dollar. In-home support services (IHSS), namely, were a popular benefit that providers theoretically stood to benefit from.


But, since 2019, that optimism around MA has waned for most. The return on the investment has largely not been there.

For one, providers that generally dealt with private-pay clients were met with less favorable rates in MA, plus less reliable scheduling for their caregivers. Then, particularly recently, the growth in plans’ adoption of SSBCI and primarily-health related benefits has slowed.

This year, for instance, 867 plans are offering IHSS as a supplemental benefit, according to the research and advisory firm ATI Advisory. That’s a significant drop off from 2023, when 1,308 plans were offering the benefit.


Lingering optimism

By 2022, providers were already backing off the idea that significant MA investments were worth their time.

“We’re sitting on the sidelines and watching,” Right at Home CEO Margaret Haynes told Home Health Care News in late 2022. “We certainly are dabbling in a couple areas where it makes sense, but it really does come down to the reimbursement rate.”

Many of the larger home care companies were beginning to feel that way, and have since become more entrenched in that thinking.

But BrightStar Care – and its CEO, Shelly Sun – were going the opposite way. Sun felt that digging into MA was more than worth it, given how many seniors would be enrolled in a plan in the next few years. It was a way, from Sun’s perspective, to diversify revenue while also planning for the future.

Also in late 2022, Sun told HHCN that BrightStar was converting 5% to 10% of its MA clients to private-pay clients down the line.

In early 2024, she remains optimistic, albeit with some caveats.

“I still am very bullish on Medicare Advantage, because the mission for BrightStar has always been taking care of moms and dads, grandmas and grandpas,” Sun recently told HHCN. “And if 50% of those seniors are likely to have Medicare Advantage, not being there to help them use a government benefit to make their dollars work further to help keep them at home, that would be contrary to our mission.”

The Chicago-based BrightStar Care has more than 380 home care locations nationwide. It also has a senior living portfolio and provides supplemental staffing. Overall, the company has 15,000 caregivers and 5,700 registered nurses on staff.

Because it is a franchise, the entrance into MA business required convincing. After all, the margins that come with MA beneficiary hours are much more slim than the traditional private-pay hours franchisees are used to servicing.

To combat that issue, BrightStar has also increased its company-owned footprint, which allows it to test out the best way to handle MA cases, alternative models and new technologies.

Sun also does not think that the fewer plans offering personal care benefits will negatively impact business for her company, however.

“Not every Medicare Advantage plan offers supplemental benefits,” she said. “And not every set of supplemental benefits offers personal care, but I believe we should be able to take it when they do. And I think there’s a similar number of hours that will be covered in 2024 compared to 2023, even though fewer plans are offering them. The ones that offer them are increasing their volume.”

For the ones pulling away, Sun believes that’s due to the difficulty that came with managing networks of home care providers in given markets.

The ones that still offer the benefits may face similar struggles, but Sun believes the data is showing those plans that offering personal care is extremely beneficial to their members.

“It improves their loss ratios because home care is the lowest cost of care, and it helps avoid some hospitalizations that are more expensive,” Sun said.

If anything has tapered Sun’s bullishness on MA, however, it’s how plans are handling the benefits.

“In 2024, most of [the plans] will have moved to conveners,” she said. “I think that’s dangerous, because unless they have SLAs in place, from our experience, conveners are not making sure that the customers that had benefits last year – and had a specific caregiver last year – that they end up with the same agency the next year.”

Sun has been reaching out to health plans directly to make sure they’re aware of that problem, which she believes is a big one given the amount of weight “customer satisfaction” will hold on STAR ratings for MA plans.

That is where there needs to be a “wake up call” for plans, according to Sun.

Still, she is sticking with the strategy. Not only does she believe her initial thesis will be proven correct, but also, she believes that the seniors underneath MA plans are in need of this type of care.

“Obviously, it’s not about profitability in the short term. The plans don’t pay well,” Sun said. “But it’s the right thing to do. And it’s going to be a horrific experience for these seniors, which is what I’m trying to get with the plans on to avoid.”

Working through it

FirstLight Home Care, like most home care providers, is also focused on expanding further into alternative payer sources. That effort has mostly included Medicaid and the VA, but it also still does include MA.

The company’s CEO, Glee McAnanly, also recently expressed some concerns to HHCN over how the plans were administering benefits.

“We’re struggling with some of the payer groups with reimbursement rates,” McAnanly said. “We’re working through that to see what happens. I am concerned with margin compression. And we’re going to have to figure out how to make things work [with those plans].”

Despite frustrations, home care provider leaders aren’t blind to the trends.

Yes, MA plans’ investment in personal care may be waning slightly in the short term, but more than 50% of seniors covered by Medicare are now under a MA plan.

That, plus billing rates skyrocketing in private-pay home care over the last three years, is enough for providers like BrightStar and FirstLight to keep trying to make things work.

“We can say all we want, but the margins are always going to be tight,” Kristen Duell, the VP of experience and innovation at FirstLight, told HHCN. “We have to execute around how we’re able to reduce the costs in other areas from an operational perspective.”

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