Despite operating on razor-thin margins and facing persistent reimbursement challenges, some home-based care providers are setting themselves apart by leaning into innovation. 

By embracing alternative payment models, virtual health and opportunities like hospital-at-home programs, providers can save themselves from home-based care’s “self-inflicted challenge” of not capitalizing on the industry’s evolving opportunities, according to Bill Dombi, senior counsel for Arnall Golden Gregory law firm. He also formerly led the National Association for Home Care & Hospice (NAHC), which following a merger is now the National Alliance for Care at Home.

While workforce shortages, potential Medicaid cuts and unsustainable payment rates threaten the industry, opportunity awaits those willing to evolve, Dombi said.

Home Health Care News sat down with Dombi to discuss how providers can adapt, what policy changes lie ahead and why the future of home care depends on vision and investment.

Below is that conversation, edited for length and clarity.

HHCN: What are the most significant challenges facing home-based care providers?

Dombi: The number one challenge has been one that’s been around now for a few years and that remains a very, very difficult thing to deal with, and that’s workforce.

Without the workforce, there is no health care in the home setting. It’s a challenge, but I think that the community of home care has been really facing the challenge of innovation and persistence to deal with not just recruitment issues but retention issues. But when you have a growing population of demand and you have a shrinking population of caregivers, even the best innovation is not going to solve all of the challenges.

When you’re looking at a care service that is often reimbursed by federal and state health care programs, payment rates continue to be a high influence on both challenges and opportunities, but challenges mostly. Look at Medicare home health and the payment system that they have today, with deteriorating payment rates, combined with Medicare Advantage plans becoming increasingly a payer of home health services as more and more people enroll in Medicare Part C over the traditional Medicare program. The plans don’t pay a fair rate. That is something which, unless we see some significant change in how the plans pay providers of services, will spell a challenge forever and a day – and maybe an insurmountable one.

We are heartened by seeing some improvements coming from some of the plans, willingness to work on risk-based reimbursement, shared risk approaches, including episodic payment and even capitated payment. But we really need to see an acceleration of those changes within the plans as we continue to see the proportion of home health paid by Medicare Advantage over traditional Medicare, and then you can go to the other payers.

My number three challenge is to get the home care community to take advantage of the new opportunities that are arising.

When you look at hospital-at-home services and you look at who is doing that care coming from the health system on through, it’s not as much the home health agencies as it is the hospitals teaming up with paramedics. When you look at some of the other opportunities there are in virtual health, it’s physician offices [more] than it is the home care providers of services. When you’re looking at other high-tech kinds of service opportunities, specialty groups are coming out, and they often include nurse practitioners and physicians over the home health agencies.

So, in some respects, the challenge is a self-inflicted challenge, because the home health providers and other home care providers who command, by and large, the community of health care at home are just not investing in those other opportunities that are arising.

Are you seeing a differentiation in the industry between providers who are investing in those opportunities and those who are not?

Absolutely. When I say investing, sometimes it’s time, sometimes it’s money, sometimes it’s both of those when looking at these new opportunities. [It’s] even just becoming aware of what [the opportunities] are and how they can be part of an Accountable Care Organization, for example, or how they could link into a Program of All-Inclusive Care for the Elderly (PACE) program, or hospital-at-home programs. But you find more providers who, maybe because the challenges that I’ve mentioned are overwhelming, just don’t have the capacity to take that time or money investment in those expansions of what we define as health care at home.

I would offer a footnote, it’s not just the big companies that are the ones who are investing in those new opportunities. It’s all sizes. Size is not the determinant of making those investments.

People need to examine what kind of culture they want to have within what they do in health care at home. Clearly, there is room for people doing normal day-to-day home health, hospice and home care services. It’s extremely important work, very meaningful, very much a contribution to the wellness of our society here. And then there are the others who want to think a little broader than that. That does not mean I’m criticizing one over the other, but people should ask themselves that question. ‘Do I want to be part of that broader future, or do I want to do just a five-star job on the traditional work?’

What emerging policy trends should home-based care providers be preparing for in the next two to five years?

Number one in 2025 is Medicaid. Not all providers do Medicaid home care work, but when you’re looking at something that one would have to unfortunately label as a serious threat, it’s the reduction of federal supports for Medicaid programs. There is an increasing volume of voices, in bipartisan ways, but also from the aging community, from the community that represents people with disabilities, and from the provider sectors, to try to detour these discussions regarding cutbacks in the Medicaid program. That goes to the top of the list.

In the mix of very important issues is hospice-related reform. Hospice was put into a bit of a battle because of some abusive practices coming from some new providers in certain parts of the country. We are seeing signs of an emergence of attention to hospice in Congress, regulators and oversight bodies, all these things tie into what you might see as regulatory and legislative action.

But I would really be remiss if I didn’t bring up such things as the PDGM payment model in home health. The great hope is that this administration will do something different than the last administration did with the so-called budget neutrality adjustments, which are deteriorating the ability to actually cover the costs of Medicare home health services.

Those three come to the top of my mind when looking at 2025 from a combination of legislative and regulatory perspectives.

Looking ahead, what gives you the most optimism about the future of home-based care?

I am not someone who’s been labeled an optimist. I remain very bullish on health care at home’s opportunities and the forecast for what it’s like in the future. Obviously, we have an aging population, but what we really have is the population of health care consumers who want to be engaged and in control of their health care, and that includes choosing the site of their care.

You are absolutely seeing, not just a silver tsunami, but something close to a tsunami of interest in having more and more health care at home, as not just efficient and effective, but also giving that consumer that driver’s seat of health care, which more and more people want. Most people want that, and they want … health care in place for all ages. The pediatric private duty nursing patient, the family wants to be home with that child, and the child wants to be home, everybody from that age on to the centenarians out there.