Medicare Advantage Becomes Biggest Payer For Home Health Care, But Fundamental Challenges Remain

With the increase in Medicare Advantage (MA) enrollments, home care providers must be prepared to adapt to changing market conditions.

MA has played a larger role in the Medicare program in recent years. The number of master’s registrants has increased by 8.3% on average over the past five years, according to data from post-acute analysis and measurement company Trella Health.

Additionally, registrations increased 9.5% between 2019 and 2020, with MA penetration reaching 46.6% in March 2021.

“Medicare Advantage is not a new concept or a new program,” Michael Neuman, vice president of data science and engineering at Trella Health, told Home Health Care News. “What we’ve seen is that since the Affordable Care Act, more and more people are starting to realize it. [MA] programs. There is a lot more marketing out there. I think what drives people to [MA] is the perception that fee-for-service is limited in terms of the network.

In other words, people want plan flexibility, access to more providers, and care better suited to their specific medical needs.

Another factor driving the increase in master’s enrollments is the growing population of individuals in the United States who are entering Medicare eligibility age, according to Neuman.

“We know the baby boomers are entering this age group now and have been for a little while now,” he said. “This influx and volume will also drive up those numbers. You’re going to see people signing up for both fee-for-service and [MA], but it’s just going to be exacerbated by this volume.

On the other hand, paid health insurance has seen a decline over the past five years. More specifically, paid health insurance enrollments fell by 1.1% on average.

Geographically, AD penetration varies by state. Currently, master’s enrollments tend to be higher in large metropolitan areas, such as New York and San Francisco, and lower in rural areas.

“The reason is that the plan, from a purely logistical point of view, has the ability to choose doctors in a concentrated area and then offer that network to more people,” Carter Bakkum said, senior data analyst at Trella Health. HHCN. “It is worth the plans to focus in these urban areas as their time spent finding the best doctors for their network is going to deliver care that may include more patients. ”

That said, urban markets will eventually become saturated. To thrive, MA plans will need to focus on networking in rural areas, according to Bakkum.

While MA continues to grow, the bad news for providers is that these plans don’t use home health services as much as their paid counterparts.

One of the possible reasons for this is that AD plans sometimes struggle to understand the role and added value of home health. Another reason is that the authorization process used by MA plans may limit access to home care for registrants, according to a 2021 report from KNG Health Consulting.

“Many home health care providers and researchers we interviewed indicated that there may be significant gaps in understanding what skilled home health care entails and the health benefits associated with the care. health care providers, among patients and providers outside of the home health care industry. Elizabeth Hamlett, senior research associate for KNG, told HHCN in August. “For example, several interviewees noted that home health care is often confused with community care, and that few are aware of the skilled nursing or therapy services provided by home health agencies.”

This leaves providers in dire straits going forward, Neuman said during a recent National Association for Home Care & Hospice (NAHC) webinar.

“The danger is that there is a decrease in the volume of patients,” he said. “It’s going to happen in the near future if home health agencies don’t start paying attention to what’s going on with regard to patients. [MA], how patients choose and allocate services, and how plans develop their networks.

Home care providers will not be able to rely solely on fee-for-service for patient volume. In order to build on the increase in master’s enrollments, providers will need to improve their strategy, build relationships with the right reference partners and focus on evaluating their pay mix, according to Neuman.

Additionally, vendors will need to keep an eye out for states that see the most growth and MA opportunities.

Currently, MA uses home health services more than paid health insurance in at least 11 states: Oregon, Wyoming, Nebraska, Kansas, New Mexico, Iowa, Arkansas, Pennsylvania, Massachusetts, South Carolina, and Delaware.

Source: Trella Santé

For providers who are able to adapt, working with MA plans could be a potential boon.

“There is a real opportunity for home health agencies, as AM plans actually have more flexibility in terms of reimbursement and use of home health services,” Bakkum said. “From a home health perspective, if you have access to data on MA plans using home health services effectively, you want to target those plans, improve patient outcomes, and also increase your count. “

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