Navigating the Evolving Landscape of Medicare Advantage for Home-Based Care Providers
As the landscape of Medicare Advantage (MA) evolves, home-based care providers are reevaluating their strategies for growth and partnership selection. Industry experts at the recent Home Health Care News’ PAYER Summit emphasized the importance of adapting to these shifts.
Allison Rizer, Chief Growth and Innovation Officer at ATI Advisory, highlighted that while Medicare Advantage remains a critical component of the healthcare system, it is currently experiencing financial pressures. "There are just fewer dollars," Rizer noted, referencing the trend of insurance companies withdrawing from certain markets. This withdrawal affects the negotiating leverage providers previously held. Higher patient acuity has also resulted in increased costs at a time when reimbursements are decreasing. Rizer urged organizations to critically evaluate their operational margins and consider reducing administrative expenses.
Moreover, the transition of Medicare Advantage plans from Preferred Provider Organizations (PPO) to Health Maintenance Organizations (HMO) could further impact providers' negotiating capabilities. ATI Advisory, established in 2014 and based in Washington, D.C., focuses on healthcare research and advisory services.
Strategic Focus and Profitability
Ryan Haller, CEO and Founding Principal of h/care, discussed measures his organization took by narrowing their focus to enhance profitability post-acquisition. For instance, after acquiring a home health agency with a -20% EBITDA margin, the company opted to narrow their patient focus significantly, resulting in an improved EBITDA margin of 8%.
Haller pointed out that scrutinizing which payer contracts are financially viable is crucial, particularly in regions like Cleveland, where there is varied penetration of Medicare Advantage plans across different demographics. The priority, as Haller suggests, should be on optimizing operational efficiency rather than expanding patient numbers.
Partnering with Purpose
Coreen Dicus-Johnson, President and CEO of Network Health, stressed the importance of deliberate selection of payer partners, advocating for partnering with those who share in efforts to reduce costs and improve quality. Network Health, which provides Medicare Advantage plans in Wisconsin, seeks to enhance collaboration through initiatives like streamlining hospital discharge processes. Dicus-Johnson identified timing and coordination in discharge planning as areas needing improvement to better meet expectations.
Additionally, addressing areas such as fraud, waste, and abuse could significantly enhance payer relationships. Rizer pointed out the federal government's increased scrutiny, particularly concerning Medicaid. Exploring innovative solutions like enhanced electronic visit verification (EVV) systems might provide a compelling value proposition for state partnerships.
Overall, adapting to the dynamic MA environment involves strategic operational decisions and fostering stronger collaborations with payer partners.