Home care providers have a huge opportunity to grow their businesses by working with Medicare Advantage plans, but they should not expect too much too soon.
That’s Mark Heaney’s take, following news earlier this year that Medicare Advantage plans will be allowed to cover non-skilled in-home care starting in 2019. Heaney is the former CEO of Frisco, Texas-based Addus HomeCare (Nasdaq: ADUS), one of the largest providers of in-home personal care services in the United States. He currently sits on the boards of home care-related companies and consults various players in the industry.
“It’s a sea change, in my view,” Heaney said of the new MA flexibility, speaking during a recent webinar on the topic, which was sponsored by Complia Health and presented by Home Health Care News.
While there has been some debate about the scope of the Medicare Advantage opportunity for home care providers, Heaney’s sentiment was echoed by Mary Hsieh, managing principal at Health Management Associates, a consultancy with expertise in Medicare Advantage (MA). Hsieh pointed to the fact that there are about 19 million beneficiaries who are currently enrolled in an MA plan. That number is growing, too, making the MA population a substantial segment that non-medical home care providers can start to serve.
In addition to the large population of MA beneficiaries, there is a growing trend of competing insurers offering zero-premium plans. This means that plans cannot compete with each other by offering lower premiums than their rivals and must differentiate themselves in other ways. As a result, they are seeking to win new business by offering supplemental benefits—and non-skilled in-home care could now be on the menu.
However, Medicare Advantage insurers are likely to start slowly and evolve their home care benefits over time, Heaney and Hsieh said. This does not mean that agencies should be sitting on their hands, but rather they should now be setting themselves up for success in the long-term.
During his tenure as Addus CEO, a similar opportunity arose when managed care plans began offering benefits for dual-eligible beneficiaries, or those qualifying for both Medicare and Medicaid. Addus succeeded in making the most of that business opportunity, Heaney believes, and the company’s approach offers a template for how to approach this new chance to work with Medicare Advantage.
First, it’s crucial for providers to educate themselves.
“When the duals demonstration was announced, I had no idea what a ‘dual’ was,” he said.
Addus brought in an expert to educate the senior staff and board members, attended industry conferences, gleaned information from national and state home care association, consulted with legal counsel, and engaged Health Management Associates to help devise a detailed, state-by-state business plan to develop relationships with insurers and ultimately contract with them.
These are among the other tips that Heaney and Hsieh shared:
Identify the Medicare Advantage insurers serving your area. Three insurers—UnitedHealth Group (NYSE: UHG), Humana (NYSE: HUM) and Blue Cross Blue Shield—account for about 54% of Medicare Advantage enrollment nationwide. However, there are a variety of regional and local insurers offering MA plans. So, it’s important to know the important players in a given market and reach out to them.
Plans that already offer at-home personal care benefits in some form, such as through a dual-eligible demonstration, likely will be the first to offer the benefit under the new expansion, Hsieh surmised.
Understand what MA insurers need and value. To work with an MA insurer, a home care agency must be able to deliver high-quality care on a consistent basis, Heaney emphasized.
“I was struck by the degree to which plans talk about, focus on and care about member satisfaction—how a member perceives the care they’re receiving and, in this case, how the care that we’re providing reflects on that plan,” he said. “… Plans care greatly about their name, brand, star ratings, all of which contribute to their ability to grow in the market.”
Having robust technology capabilities is also of paramount importance. The plans want to work with home care providers that rely on data to drive care and that can furnish data to prove they are delivering high-quality services and driving cost control. Patient satisfaction metrics, information related to changes in clinical condition, inventories of completed tasks, and percentage of on-time services are among the data points that Medicare Advantage plans crave.
Understanding the key role that a plan’s care managers play is also key to success, Heaney and Hsieh agreed.
“Once you’re on [the insurer’s] panel, that case manager becomes the most important person in the world,” Heaney said. “Make the case manager feel that you are partners … be that person’s eyes and ears in the home.”
Inventory and develop your agency’s strengths. A home care agency should ask itself why a Medicare Advantage plan would want it as a partner, Heaney advised. There are a variety of potential answers to this question. It could be that the agency’s scale makes it a good fit to cover the plan’s beneficiary population, or that the agency has a robust clinical offering in an area of specialization such as dementia or diabetes.
Smaller home care companies should not count themselves out of the game, either. They could consider teaming up with a larger provider that is contracted with a Medicare Advantage insurer. National or regional home care providers sometimes strike contracts with MA plans to cover their whole service area. This might include markets where the home care provider does not have a presence and must look for partners to deliver or supplement services.
Furthermore, Medicare Advantage plans are created at the county level, so even large insurance companies are keyed in to local market dynamics.
“You could offer a differentiator for a plan in a market,” Hsieh said. “Recognize that as a value you bring to the table. Think about how close you are to their members.”
Be a first mover. In the latter half of this year, sophisticated plans will already be thinking about their benefit structures for 2020, Hsieh noted. So, these next months would be an ideal time for home care agencies to have discussions with the insurers, to understand what they’re thinking and to be on their radar as they design their benefits.
While Heaney would not likely be hiring additional staff to handle an influx of new business on Jan. 1, 2019, he also advised agencies to engage with insurers and create Medicare Advantage strategies.
“I would get started,” he said. “There’s no time like right now.”
Written by Tim Mullaney