In the home-based care world, building a business that is equipped to take on risk-based reimbursement arrangements can be easier said than done. While no simple feat, taking on risk is an attractive option that allows home-based care providers to align incentives between their organizations, payer sources and patients.

Providers that have found success with risk-based agreements have done so by addressing retention challenges, investing in data and more.

“From a risk perspective, we see it as fundamental to our business,” Will Robinson, HarmonyCares’ senior vice president of accountable care, said at Home Health Care News’ Capital+Strategy conference. “The fee-for-service environment for home-based primary care is not tenable. That’s my old world, I spent a lot of time working for [CMS] on things like the physician fee schedule. It’s a struggle. We see [risk-based arrangements] as essential to making our business work. When the government wins and when the patient wins, we win, and we like that arrangement.”

Based in Troy, Michigan, HarmonyCares is a home-based primary care provider. The company delivers services to individuals with complex health needs, and its model includes home health, hospice, palliative care, radiology and laboratory services. It operates in 40 markets and 17 states.

Home-based care providers are embracing risk-based reimbursement arrangements, a type of value-based care, through several distinct frameworks.

At HarmonyCares, taking on risk means participating in the Medicare Shared Savings Program (MSSP), as well as the Accountable Care Organization (ACO) REACH program.

Additionally, HarmonyCares takes on varying risk from Medicare Advantage (MA) plans, and a number of fully cap and partial cap arrangements which are rapidly growing, according to Robinson. Currently, HarmonyCares has about 80,000 patients in those arrangements and will likely grow to 100,000 by the end of the year.

The LTM Group, on the other hand, takes on risk by working with regional payers.

“We are in the Midwest … we’re a mid-sized agency,” Lisa Eckley, co-founder of the LTM Group, said. “What we do is go to our regional payers with our outcomes. We don’t say we’re providing good care. We go and show them that we’re providing good care. We go and present our data, find out what their pain points are, and we’ve been very successful at that.”

Dayton, Ohio-based, the LTM Group includes several home health, personal care, hospice and rehab companies with more than 500 employees across Indiana, Ohio and Michigan.

Challenges and common mistakes

For home-based care leaders looking to embrace risk-based opportunities, staff retention can be one of the biggest challenges holding their organization back.

To improve retention, LTM Group implemented AI tools to address one of its clinical staff’s biggest pain points.

“As a former field nurse, documentation was the bane of my existence,” Eckley said. “We have gone to a model where we use AI for documentation. We have a 98% retention rate with that, which is huge.”

The company has also been able to increase staff productivity by 50%. Utilizing AI tools for documentation also allows the company’s staff to have more of a work-life balance, Eckley noted.

“They can go have dinner with their family,” she said. “They can play with their kids … they’re not sitting there … charting. We’ve eliminated that, which has decreased costs for us, which is huge.”

Robinson pointed out that when participating in risk-based arrangements, an organization’s priorities will need to change. Balancing new priorities can be a challenge for some companies.

“Let’s say from a scheduling standpoint, you miss a fee-for-service visit,” he said. “Your opportunity cost there is basically not being able to bill for that visit. If you’re in the risk business, and you miss a visit, and then that patient goes to the hospital, you’re potentially out [maybe] $40,000, $50,000, or $60,000, depending on that hospital stay. And those hospital stays are preventable.”

In response, HarmonyCares has heavily invested in predictive analytics and risk-stratification data.

“One thing is in investing the data, and another is actually gearing your ops so that you’re taking advantage of what that data says, and structuring your entire scheduling and clinical workflow around, [for instance] looking at our mortality and admissions models every week, and determining that those are the patients who are going to drive our scheduling,” Robinson said. “That’s how we think about things.”

Meanwhile, Medford, Massachusetts-based Innovive Health is new to taking on risk. The company is in the beginning stages of working with a payer to establish a value-based arrangement contract.

“We’re working with a payer partner, and we’ve been able to get through the beginning stages of co-producing what that would look like — looking at our data, looking at their data, the quality metrics that we both want to be accountable for,” Kristen Palumbo, chief operating officer at Innovive Health, said. “We’re marching towards being able to kick that off very soon.”

Innovive is a home-based care provider that serves complex behavioral health patients. The company utilizes nurses, as well as other specialties, in order to serve patients.

One of the common mistakes Palumbo believes that providers seeking out risk-based arrangements make is skipping the pilot phase.

“We started by piloting a smaller group … we invested quite a lot into building infrastructure,” she said. “We always try to think about it as, we need to build the infrastructure. We need to run that program, not wait for the census to grow to support it. Certainly, those upfront investments, if you’re not making those, that would be a mistake.”

Another common mistake providers make is not having a strong understanding of their finances. Providers should go in knowing what their cost of care is so they can offer payer partners a detailed picture of what a risk-based arrangement could look like, according to Eckley.

She also emphasized the importance of providers knowing when to walk away.

“We’ve done that a lot, especially with our Medicaid Advantage plans,” Eckley said. “We hate not being able to provide care to that community because they have some of the greatest needs, but when the Medicaid Advantage plans aren’t paying you enough to even do a visit, you have to walk away. We’re not afraid to do that. I think a lot of agencies, especially if you’re new to this, are afraid to do that.”

Impacts and margins

Embracing value-based care can allow providers to improve their financial standing. LTM Group has achieved increased margins by instituting risk-based agreements.

“We might be doing [fewer visits] but they’re more impactful,” Eckley said. “They’re more focused on what the need is. When I started home care a very long time ago, you got paid for how many visits you did. We don’t do that anymore, so that’s helped us increase our margins, which again, helps us stay in business. No margin, no mission.”

Through its participation in the MSSP, HarmonyCares had a shared savings of $450 per member, per month. For the ACO REACH program, the company has a shared savings of north of $1,000.

“In terms of the amount of shared savings that we can earn, if you’re focused on complex populations, there’s a real opportunity there,” Robinson said. “These patients are incredibly mismanaged. They are not well served by the existing brick and mortar infrastructure, and they typically come to us in a very expensive sort of way that we can then help get their care under control.”

Ultimately, Palumbo believes that home-based care providers are well-positioned to fully embrace risk-based opportunities.

“If you do home care the right way, you’re already providing that value-added care because you’re providing medically necessary care at the frequency it should be [delivered],” she said.