Leah Shlyakhov Connachan, chief revenue officer at Seattle-based clinical software company MedBridge, has been named a 2020 Future Leader by Home Health Care News parent company Aging Media Network.

Future Leaders are high-performing, passionate employees nominated by their peers. Candidates must be 40 or younger and put vision into action while also advocating for seniors and their caregivers.

Connachan recently sat down with HHCN to talk about the important role technology has to play shaping the future of the ever-evolving home health care industry.

HHCN: What drew you to this industry?

Connachan: I’ve always had a passion for health care and education, and that’s the reason I work for MedBridge.

Specifically in home health, I look at the different models of care and ways that we can provide accessible care to the most vulnerable within our communities.

That really has been at the heart of it all: making sure that what I do and what we do as a business is really improving the lives of patients.

What’s your biggest lesson learned since you started working in home health?

There’s vast diversity within the industry itself, given the different complexities within payment models, within partnerships and within ownership.

The world of home health is highly complex and is ever changing, so I feel like I’m learning every day.

The new technologies and new care models that are being tested in industry is always fascinating, so there’s never a time that I’m not learning.

If you could change one thing with an eye toward the future of home health care, what would it be?

Coming from a technology company that helps serve patients with digital care within home health, I’m always looking at continued adoption of technologies by the patient population.

In the past few years, the willingness for patients to adopt the technology has been pretty prevalent.

We’ve seen an even more drastic change in that over the course of a very short time due to the coronavirus, and we’ll continue to see that as we head into the future.

What do you foresee being different about the home health industry in 2021?

I think we’ll continue to see additional services and expanded services within the home.

I’m working with a few agencies right now that are modeling different types of care within the home. It’s really exciting to be able to bring some things that have historically been in brick-and-mortar into the home.

In a word, how would you describe the future of home health?

If I could only say one word, I’d say it’s “exciting,” but there’s many words I could use to describe the future of home health care. I think “exciting” would encapsulate them all.

There’s so much opportunity to better serve patient populations in the community and use innovative care models and care delivery systems to better engage with both patients and family members.

To learn more about the Future Leaders program, visit the Future Leaders homepage.

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Andy Matthews, vice president of business development for Los Angeles-based 24 Hour Home Care, has been named a 2020 Future Leader by Home Health Care News parent company Aging Media Network.

Future Leaders are high-performing, passionate employees nominated by their peers. Candidates must be 40 or younger and put vision into action while also advocating for seniors and their caregivers.

Matthews recently sat down with HHCN to talk about his career trajectory and how market forces, regulatory changes and the COVID-19 pandemic are changing the home care game.

You can find the conversation below, edited for length and clarity.

HHCN: What drew you to this industry?

Matthews: I was going to the University of Southern California, and I was in the middle of switching from a health care practitioner route to the business side of health care. 24 Hour Home Care had a health care management internship, which I applied to and was selected for.

When I joined, it was just the three owners. They were in startup mode, with one office in the South Bay of Los Angeles. I saw a really great vision initially.

I love health care because it’s a chance to help people. I really liked home care specifically because there’s a little bit of entrepreneurial spirit to it.

They brought me on as the first employee shortly thereafter, and I’ve helped them grow the company from one office to now 20 locations across Arizona, California and Texas.

What’s the biggest lesson you’ve learned in home care?

The more adaptable you are to change, the more likely you are to succeed.

There have been a lot of industry changes, whether they’re regulatory or minimum wage or COVID-19.

At 24 Hour Home Care, we’ve really risen to all of those different challenges, most recently with COVID-19.

We started providing temperature screening services and using our caregivers to screen essential workers and help them get back to work. We also started providing COVID-19 testing to nursing homes in our communities, setting them up with a partner of ours so they could test their residents and workers.

If you could change one for the future of home care, what would it be?

Over the past several years, it’s been encouraging to see organizations and payers funding home care.

Medicare Advantage is brand new, but it’s very exciting to see those plans starting to cover home care services. We also work with the VA in a similar program, where veterans that could be considered for nursing home placement can receive home care instead. These organizations are seeing cost savings involved with keeping people at home and preventing more severe health outcomes.

I would love to see more organizations continue to fund home care. More insurances would be very welcome.

I’m starting to see the tide turn now with some of these programs. I hope we continue to see that, and one day everybody has access to home care.

What do you foresee as being different about the home care industry in 2021?

Cost considerations have always been front of mind, but now infection control and safety are the number one issue.

We’ve been fortunate: We were able to secure a good amount of PPE, and after consulting with an infectious disease doctor and getting protocols set up, we felt comfortable caring for COVID-positive patients.

Since March, we’ve provided over 10,000 hours of care to COVID-positive clients referred to us by over 200 hospitals and skilled nursing facilities. In providing that care, less than 1% of our clients and caregivers reported any COVID-19 exposure in the home setting.

That’s the biggest change every company is adapting to right now, and I think it’s going to be present through 2021.

In a word, how would you describe the future of home care?

This word is said so often now, and before 2020 I don’t think I used it very often: Essential.

Our workers are essential. They’re providing a service needed to keep people safe and comfortable in their homes. I also believe that home care is going to be essential in the future in that it is a cost-effective and safe way to provide care.

Including home care in the continuum of care is going to be the way of the future.

To learn more about the Future Leaders program, visit the Future Leaders homepage.

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There are more than 10,000 home health providers nationwide, but typically, only a few dozen deals close per year. Between 2011 and 2014, the market saw an annual average of 80 transactions, according to data from the investment banking company Lincoln International. That number dropped to about 60 deals per year from 2016 to early 2020.

In other words, buyers looking to purchase a home health provider have thousands of options to choose from. Agencies, on the other hand, have less leeway.

However, there are a few key things home health acquisition targets can do to make themselves more attractive and drive up their valuations, according to Mark Kulik, managing director at the Braff Group. 

“When you look at the number of agencies out there across the country versus the number of closed transactions per year, it’s extremely infinitesimal,” Kulik said. “So it’s critical to know how buyers look at your agency, how they evaluate your agency, and what you can do to make your agency more attractive and more valuable to a buyer.” 

Kulik made those comments during a recent presentation at the National Association for Home Care & Hospice (NAHC) 2020 Financial Management Conference, which was held virtually due to the COVID-19 emergency. 

He explained that buyers typically look at three main areas when evaluating a potential home health acquisition target: the agency’s annual income, its annual growth and any risks it brings to the table.

Generally, more income equates to a higher value, and the same is true for growth.

Meanwhile greater risk — whether real or perceived — lowers the valuation an agency can command.

“So what’s the valuation formula?” Kulik said. “Income and growth [are] combined and multiplied times the buyer’s assessed risks, and that gives you the valuation of your agency.” 

On a more granular level, valuation comes down to an agency’s sales, talent, processes and compliance, according to David Berman, principal of health care M&A at Simione Healthcare Consultants.

Regarding sales, agencies with diversified referral sources are most attractive to buyers. That is, agencies with more referral sources — as opposed to fewer — are generally considered to have a more stable future in store.

“The lower your risk, the higher your value,” Berman said during the presentation. “The more your referral sources are centralized into one, the higher the risk [and] the lower value. The second part is: Who has the relationship with a referral source?”

Like referral sources themselves, those relationships with referral sources should be various and diversified so they don’t disintegrate if and when one employee leaves.

In addition to illustrating that to buyers, it’s also important for an agency to demonstrate future opportunities in the market, showing that the market isn’t too saturated and that they have a proven ability for growth.

“I have a lot of buyers that come up to me and say, ‘Mark, I had a great year last year, we grew 29%,’” Kulik said. “And I said, ‘Well, what happened the years before?’”

If an agency’s past is filled with inconsistencies, there’s no guarantee for the buyer that such growth will continue into the future. Instead, buyers are looking for consistent, sustainable growth.

Consistency is important in other metrics, too, Kulik explained, noting that buyers like to see how acquisition targets compare to national benchmarks. For example, an agency is generally considered very attractive if it’s been able to grow revenue 10% to 15% per year, he said, and its EBITDA should be in the 12% to 16% range. 

Above-average benchmarks aren’t always a guaranteed valuation driver, though.

“If you’re saying ‘Well, gosh, I’m doing better than the market. I get a premium. I’m doing 55% to 60% gross margin.’ Not so fast,” Kulik said. “A borrower’s going to say, ‘Wait a minute: We know that Medicare is a national program, so how can you be outdistancing the national norms by 10 points? What are you not doing that you should be doing?’”

Talent metrics are also important. How long have key leaders been with the company? Does the provider have dedicated sales leadership? What does an agency’s turnover rate look like?

“Something that gets looked over too often is turnover rates,” Berman said. “It is really expensive to keep having to train and rehire … staff. The more you can keep your staff, the more efficient you’ll be able to provide care, and ultimately, the higher the value of your agency.”

Turnover of key leadership is especially important for financial buyers, such as private equity firms or platform companies, he explained. That’s the case because these entities are likely looking for an asset they can use as a starting point into which it can roll additional agencies.

Home health companies targeted by these buyers need to demonstrate strong leadership and processes that can be built upon.

“What they need from you as the seller is a solid management team, a solid revenue cycle, a good EMR, a good use of technology, solid intake and solid administrative functions,” Berman said.

Meanwhile, for strategic buyers already in the space looking to do bolt-on acquisitions usually prioritize gross margin, as they already have their processes in place.

Finally, compliance is important for all acquisition targets, as the buyer doesn’t want to have to worry about Medicare coming after its new asset in the future for its past indiscretions.

As such, home health companies that can show well established compliance programs and detailed, easily accessible electronic records can likely demand a higher value.

Additionally, sellers should be able to present two to three years of past financial statements and future projections, based on metrics and predicted headwinds, for the next three years.

The post How Home Health Agencies Can Demand Higher Valuations in M&A Deals appeared first on Home Health Care News.

As a result, the insurer doubled down on home-based care initiatives in Q2 2020 and will continue to do so going forward.

“We believe consumer demand for high-quality home-based care models will continue to increase,” Humana CEO and President Bruce Broussard said on the company’s Wednesday earnings call. “And COVID has reinforced this belief as we see increased awareness and interest in home-based care models by consumers.”

Humana has long been bullish on home- and community-based care. In 2017, the company, along with two PE firms, announced the acquisition of Kindred at Home, the largest home health provider in the country.

The insurer ramped up its home-based care efforts even further amid the pandemic, announcing strategic partnerships with the in-home primary care company Heal and the home-based acute medical care provider DispatchHealth. 

“Heal will serve as our preferred home-based primary care model, which is inherently more capital efficient and scalable, allowing Humana to offer high-quality, value-based primary care to more members than a clinic-based strategy,” Broussard said on the call. “The ability to deliver emergency room and hospital-level care in the home through partners like DispatchHealth is highly complementary and allows patients to recover in the safety and comfort of their home. [It also] reduces caregiver burden and avoids the risk of secondary infections and further health declines often experienced at the result of inpatient hospital stay.”

Additionally, Humana has continued to invest in Kindred at Home, most recently by working on developing new clinical models and operational enhancements for the service line. Broussard did not elaborate on what those look like.

Humana also saw the fruits of its home-based care efforts partly in the form of increased Medicare Advantage enrollment in Q2.

Last quarter, Humana’s individual MA plan enrollment was up 11% year-over-year, growing to 3.8 million in Q2. That’s especially impressive considering the fact that Humana recorded its highest individual MA growth rate in a decade in 2019.

“Medicare Advantage plans were some of the first organizations to proactively identify and implement policy and benefit changes at the outset of the pandemic,” Broussard said. “These actions addressed testing and treatment costs associated with the coronavirus, identified and tackled social determinants needs such as food insecurity, and ensured continuity of care for our members.”

One reason for MA’s success amid the coronavirus is that supplemental benefits allow plans to offer members services such as home-based care, food delivery and more, lessening the risk of seniors’ virus transmission while also addressing some of the effects of loneliness and isolation.

Bolstered by the COVID-19 emergency, MA’s popularity at Humana is only expected to grow more in the months to come.

The insurer raised its expected MA growth projections as a result of the strong performance it’s posted so far this year. Humana increased its individual MA growth range for 2020 from 300,000 to 350,000 new members to 330,000 to 360,000 by the end of the year.

For the quarter ended June 30, Humana saw its profits soar to $1.8 billion, or $13.75 per share. That’s double the $940 million in profit the company posted a year earlier in Q2 2019, with a nationwide delay of elective procedures largely to thank for the spike.

Humana’s Q2 revenues totaled $19.1 billion, up from $16.2 billion year-over-year.

MA competition, synergies

When asked about competition in the MA market, Broussard acknowledged that a number of smaller plans grew substantially last year, orienting recruitment around member experience.

“They’re always a concern to us, but we continue to believe our brand is strong in the markets that we compete with them,” he said. “Our value proposition is strong both with our customers and with our providers.”

Humana has technology on its side, as well as potentially Walmart, which recently announced it would get in the MA game.

“They’re not really getting into the MA business; they’re getting into the MA distribution business, and they have been in that business for a long period of time,” Broussard said. “So they would distribute Humana products but also competitor products. … We frankly look at it as a great complement to us, as they can continue to be a distributor for us.”

Humana’s stock price was $403.91 at the end of the day Wednesday.

The post Humana’s Bruce Broussard: Consumer Demand for Home-Based Care Models Will Continue to Increase appeared first on Home Health Care News.

In recent years, the rising popularity of aging in place has often helped home care providers come out on top. But now, a new franchiser — the HomeCare Advocacy Network (HCAN) — is hoping to give senior living providers a leg up.

HCAN’s goal is to help senior living providers add home care services to make themselves more competitive with their home care rivals. If successful, that could mean less business for home care providers down the line and more clients for participating senior living providers.

“If you’re not out there providing services to your future residents, someone else already is,” HCAN co-Founder and President Mark Goetz told Home Health Care News. “The real opportunity is for senior living providers to be more in control of their own destiny and to strengthen their own long-term viability.”

Before bringing HCAN to life earlier this year, Goetz worked as an executive at Frederick, Maryland-based Asbury Communities, one of the nation’s largest not-for-profit senior living organizations. Prior to that, he spent 13 years at Omaha, Nebraska-based Home Instead Senior Care, an in-home care franchise company with more than 1,100 locations worldwide.

HCAN was born out of that combination of experiences.

“We saw that there was an opportunity to … help communities leverage the success that we saw on the home care side of things,” Goetz said.

It’s not that senior living providers haven’t tried to add their own home care services in the past; it’s just that their efforts haven’t always been worthwhile.

“It’s hard to be successful in home care if you’re not really focused on it,” Bob Kramer, founder and strategic advisor at the National Investment Center for Seniors Housing & Care (NIC), told HHCN. “It’s a different setting, and you really have to have expertise in doing home care. You can’t just add it as an ancillary line and assume because you’re experienced in senior care … that you’re automatically going to have success.”

Goetz agreed, noting that senior living providers often fail to specialize new home care lines appropriately.

He likened the mistake to a hospital adding a new labor and delivery wing, then staffing it with emergency room personnel. No hospital planner would do that, Goetz said, because the two disciplines are marked by a few important, specialized differences. As such, the wings should be separate but complementary.

The same is true for residential senior living and home care, Goetz said.

HCAN aims to help senior living providers get the specialty expertise and support they need to set up their own home care arms, separate from but complementary to their senior living offerings.

As a result, senior living providers will have a better shot of keeping clients, regardless of where they need their care, Goetz said.

“For years, in-home services businesses have been benefiting from partnerships with senior living, and I think that’s going to still continue,” he said. “But senior living being more empowered to serve and operate in the highly successful in-home services business … is going to just improve their overall long-term viability.”

In other words, senior living providers will be able to catch potential clients earlier in the care continuum, giving HCAN providers the option to eventually funnel those patients into congregate living settings later on or to continue caring for them in the home long-term — whichever is best for the client.

Such integrated, site-agnostic senior care is the way of the future, according to Kramer, who was unfamiliar with the HCAN model when he spoke with HHCN.

“An integrated approach … really looks at it from the point of view of the customer,” Kramer said. “What’s going to be best for them? Not for the business model, the payer, the environment or even the disease. … The integrated approach is one that I think is the way forward, but most companies, when they tried to do it themselves as a senior housing company, it hasn’t worked very well.”

How it works

Goetz described HCAN as a white-label franchise, meaning senior living providers that partner with the organization are able to retain their original name.

“White labeling is allowing the senior living provider’s name to be at the forefront — and for their brand to be the hero and our brand, the HomeCare Advocacy Network, to be secondary.”

For example, say “Mike’s Senior Living” decided to leverage HCAN’s home care help. It would become “Mike’s Senior Living, supported by the HomeCare Advocacy Network.”

From there, HCAN would provide Mike’s Senior Living with business training, brand development guidance and marketing instruction, all of which would come from leaders who know how to launch and run successful home care businesses.  

On top of that, HCAN will provide financial and human resources support, which includes an HR, recruiting and operational software for franchisers to use. 

“We’ve developed what we feel is a world-class caregiver training module that our franchise owners will have the opportunity to launch themselves, then built that with the understanding of the in-home services financial model,” Goetz said. “That’s often where some of the confusion comes [in] … between in-home services and senior living.”

In addition to that initial support, franchisees will also receive daily support to help them run their home care business, Goetz said.

“We guarantee that we’ll be on site three times the first year, two times the second and at least one time the third year to ensure the successful launch of their business,” he added.

HCAN has a royalty model, which means it succeeds only when franchisees do the same.

Growth goals

While HCAN has been in the works since August 2018, the HCAN pilot office in Omaha, Nebraska, just got up and running in April during the height of the coronavirus outbreak.

“We have two more deposits for franchises already in the Omaha metro area, so it’s growing faster than we expected,” Goetz said. “And we have a lot of meetings on the docket for people who are interested and want to get into this line of business.” 

While he couldn’t provide specific names or numbers, Goetz said the coronavirus has only helped drive up interest for HCAN. Amid the COVID-19 outbreak, home-based care has become the preferred setting for seniors, due in large part to the outbreaks that have occurred in congregate settings. 

“What COVID has done is allow us to have better conversations … with senior living executives and providers and for them to see the opportunity in a different light,” he said.

In the next 18 month, Goetz said HCAN’s goal is to be in 20 communities and have 30 locations. Within the next five years, the goal is to have 300 locations in the U.S. and three international partners.

“It’s very aggressive,” Goetz said. “But the market is really ripe with opportunity and really the time is now.”

The post New Franchise Helps Senior Living Providers Add Home Care, Creating Competition for Agencies appeared first on Home Health Care News.

While CMS’s proposed rule potentially paves the way for more remote nursing home interventions, it doesn’t include any new changes for home health providers. Nor does the president’s executive order.

“The president’s executive order is likely to change very little about telehealth policy coming out of CMS,” Rebecca Gwilt, a partner and co-founder of health care innovation firm Nixon Law Group, told Home Health Care News in an email. “His executive order essentially encourages the Health and Human Services Secretary to take a look at ways to extend the measures taken during the public health emergency.”

The lack of change is not entirely surprising: CMS already proposed making coronavirus-inspired telehealth flexibilities for home health providers permanent in its proposed 2021 home health rule. On top of that, CMS has repeatedly said only Congressional action can usher in changes such as telehealth reimbursement for home health providers. 

Because telehealth is not currently reimbursable for home health agencies, providers are struggling to navigate cash flow and patient care amid the COVID-19 emergency.

Many agencies have been left with no choice but to provide necessary telehealth services to home health patients for free. And because telehealth visits don’t count toward Low Utilization Payment Adjustment (LUPA) thresholds, agencies that provide telehealth services are often hit with a reduced reimbursement to boot.

CMS can’t change that.

However, CMS officials are urging Congress to act to expand telehealth rules, which could, in turn, trigger more home health allowances.

In addition to announcing its proposed changes to next year’s Medicare Physician Fee Schedule Monday, CMS Administrator Seema Verma urged legislators to do more to make telehealth more widely and permanently available.

“Our regulatory authority outside of the public health emergency is largely limited to the types of services that can be provided via telehealth,” Verma said Monday during a press call. “We cannot make telehealth available permanently outside of rural areas, nor can we permanently expand the list of providers authorized to provide it. Any extension of the removal of restrictions on site of care, eligible providers and non-rural areas must come from Congress.”

Verma went on to say that Congress’s role in such changes is “essential … in following through on this historic opportunity.”

However, home health doesn’t fall into any of the three areas Verma mentioned — restrictions on site of care, eligible providers and non-rural areas — according to Gwilt. 

“These buckets are applicable to Part B reimbursement for telehealth only,” she said. “Home health was largely ignored in the national conversation about supporting the expansion of telehealth.”

It’s anyone’s guess if and when any sort of Congressional help of any kind will come. But the need for such action is clear. 

Amid the COVID-19 emergency, 49% of Americans have used some sort of telehealth services, according to findings from the Harris Poll. Another 91% believe such services should be covered by insurance, with 77% saying they plan to continue using telehealth in the future.

On the home health front, there’s been some talk from Congress but no action.

“I plan to introduce a bill soon to create a framework to reimburse for telehealth services provided by home health agencies,” Sen. Susan Collins (R-Maine) said back in late May.

But now, more than two months later, no such bill has been introduced.

Still, National Association for Home Care & Hospice (NAHC) President William A. Dombi is holding out hope that will change soon.

“To achieve the full value that telehealth can bring to patients in their homes we need a combination of actions from Congress, CMS, state Medicaid programs, managed care organizations and commercial health insurance companies,” Dombi told HHCN in an email.

With respect to Medicare home health services, CMS cannot make all the needed changes on its own, Dombi reinforced.

“We need Congress to amend Medicare law to directly authorize fair payment for the delivery of telehealth services under the home health benefit,” he said. “We are hopeful that we will see bipartisan legislation introduced very soon in both the Senate and the House that would establish the changes needed in Medicare law.”

Senator Lamar Alexander, a Republican from Tennessee, introduced the Telehealth Modernization Act on July 30.

Rep. Susie Lee, a Democrat from Nevada, also introduced legislation aimed at improving telehealth services for veterans cared for by the U.S. Department of Veterans Affairs on the same day.

You can read the full proposed rule for the Medicare Physician Fee Schedule for Calendar Year 2021 here.

The post CMS: True Telehealth Change Will Require Congressional Action appeared first on Home Health Care News.

For home health care providers, one silver lining comes in the form of increased recognition and expanded opportunities. Agencies are seeing higher levels of service demand, fewer recruitment and workforce issues and a heightened ability to divert patients away from skilled nursing facilities.

While those provider opportunities have been covered by the media, another has flown somewhat under the radar: participation in clinical trials.

Clinical trials are research studies that use a group of participants to test health-related treatments or interventions. Historically, those studies have occurred mostly in centralized settings.

In light of the COVID-19 emergency, however, home health providers have been presented with the chance to participate in such research.

Home Health Care News recently connected with Firma Clinical Research CEO Michael Woods to discuss the growing opportunities for providers to participate in the space.

Firma Clinical Research is a contract research organization that provides outsourced research services to pharmaceutical and biotech companies. It specializes in drug development efforts, helping by offering advanced in-home patient visits, data management and biostatistics, medical writing, regulatory consulting, clinical pharmacology and clinical operations.

Woods told HHCN the future of clinical trials will be decentralized, with home-based care providers set to play an important role in making it all possible.

You can find that conversation below, edited for length and clarity.

HHCN: How common are home-based clinical trials currently?

Woods: Home health visits are used frequently today when there are mobility, transportation or distance issues, especially with older adults, children and people with disabilities. In addition, more procedures associated with studies are being performed in the home.

As a result, Firma’s Home Trial Service is seeing more sponsors using home health visits to enhance the clinical trial experience.

What has the clinical trial landscape looked like historically?

Typically, clinical trial visits involved the participant going to where the study principal investigators were practicing – in hospitals, clinics or physician offices. Some patients traveled long distances to participate in a clinical trial.

But as society in general is adapting to online interactions and home-based services, research studies are implementing new ways of engaging patients through telemedicine and home visits.

What specific opportunities do you think exist to do clinical trials in home health care? For example, are there any particular opportunities you see or do you think all trials could be done in the home?

An opportunity for sites using home health services is to reduce the patient burden. For patients whose conditions are caregiver intense, such as rare … disease patients, easing the burden and cost of travel through home health visits is helping to improve participation and retention. Including home health visits in a study can extend the reach of a site by hundreds of miles.

Firma’a Home Trial Service deploys and trains home health nurses who are local to research participants.

[Firma’s Home Trial Service works with outside home health agencies. It does not have its own home health line.]

Why does home health make sense for clinical trials, and why haven’t we seen it as a popular clinical trial setting in the past?

Billions of dollars were spent in the past to recruit patients to studies. Patient recruitment remains difficult, but the focus now is on enhancing the patient experience through the entire study.

In addition to the ease of home health, it also offers a safety advantage for patients who perceive risk with going to a hospital, clinic or physician office during a disease outbreak.

A Firma Home Trial Service visit occurs with personal protective equipment and social distancing to minimize the risk of disease transmission. A nurse or phlebotomist communicates in advance with each research participant to ensure visit expectations are understood and to gain the risk perspective of the participant.

What would this mean for home health providers and their patients?

Firma’s Home Trial Service is experiencing greater demand for our home health services. Plus, we are seeing the blurring of the line between home health care and home health research visits.

There is new focus on informed consent for research, which minimizes any therapeutic misconceptions.

What would home health providers have to do to get involved with a clinical trial? Would there be financial upsides?

More visits can mean better margins. But home health visits also support study success by helping to enhance clinical trial participation and retention, which in turn results in the more rapid collection of data necessary for the development of a drug or device.

If a home health provider is interested in supporting clinical trials, I recommend reaching out to a local university or research institution to explore a partnership for home-based health services.

What are your predictions for the future?

Where economically feasible, decentralized and patient-centric clinical trials will include an integration of home health and telemedicine.

Firma’s Home Trials Service is prepared to see an increasing number of health services and procedures conducted in the home, as equipment for procedures improves and becomes more mobile.

The post Home Health to Play Increasingly Important Role in Clinical Research appeared first on Home Health Care News.

However, interest in home-based care deals remains robust and valuations remain high. In fact, M&A experts expect deal activity to pick up dramatically come fall 2020 and beyond.

“The cash assistance that came from COVID-19 kind of masked the cash flow problems that we expected providers to have from the Patient-Driven Groupings Model (PDGM),” Stoneridge Partners President Rich Tinsley said. “I would expect after August [or] September you’re going to start seeing those agencies have some [difficulties] … as that cash burns off. … In so doing, I think you’re going to see those agencies come back out to market.”

Tinsley made those comments Tuesday during a presentation at the National Association for Home Care & Hospice (NAHC) 2020 Financial Management Conference, which was held virtually this year due to the COVID-19 emergency.

Struggling agencies will likely come to market with lower valuations, presenting unique, affordable opportunities for private equity companies and strategic buyers looking to make a deal.

Those opportunities are especially appealing considering the fact that home health services are in high demand amid the coronavirus. The COVID-19 emergency has pushed more and more long-term and post-acute care into the home and out of institutional settings to keep seniors safe.

More than half of the states in the country have rising COVID-19 case counts in nursing facilities, according to new same-store data compiled by the National Investment Center for Seniors Housing & Care (NIC).

On top of that, home health and hospice valuations reached an all-time high in the first half of 2020, according to a recent report by PricewaterhouseCoopers’ (PwC) Health Research Institute. Multiples hit 29 times in the first six months of the year, up from the previous high of 26 times in 2019.

Those figures are in reference to LTM EV/EBITDA.

PDGM and the coronavirus could help drive down those multiples — or at least, that’s what some buyers are hoping, according to David Berman, principal of health care M&A at Simione Healthcare Consultants.

“Moving forward into the next hundred days and having some conversations with some active buyers in the past, they expect Q3, Q4 and Q1 of 2021 to be very active on the M&A side,” Berman said during the presentation. “I don’t think anybody’s going to be looking to overpay for a B- or C-level asset. … People are going to be looking for value.”

While some private equity companies could be willing to pay more, he noted that most buyers are looking to drive down the multiples in the home health space.

Buyer considerations

Even though providers will come to market at a lower price than usual, don’t expect buyers to jump on every affordable agency they see. There are a number of considerations in play for acquiring entities to ponder before diving in.

“It’s trite to say, ‘One plus one has to equal more than two,’ but in the M&A world, it has to equal more than two,’” Berman said. “Otherwise, why do the deal? There has to be gained synergies.”

Those synergies can be expense savings, revenue growth or market expansion opportunities, just to name a few examples. In addition to identifying potential synergies, another important consideration is how long it will take for those synergies to be realized, Berman said.

Buyers will also be conducting other typical pre-transaction due diligence activities, such as working to understand an agency’s workflows, culture and financials. On top of that, they’ll be looking at new COVID-19 specific considerations.

For example, does the potential acquisition target have a PPP loan? If so, that introduces new risk for the buyer.

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Meanwhile, regulatory flexibilities for hospitals and other health care providers are creating newfound competition for home health and home care agencies.

“So far, it has been difficult to measure whether or not that competition has really created any sort of material impact on home care providers, home health agencies, hospices and the like,” National Association for Home Care & Hospice (NAHC) President William A. Dombi said. “But physicians and non-physician practitioners are put in a position to do home telehealth services today, and that may substitute for what would come from a home health agency or a hospice.”

Dombi made those comments Tuesday at NAHC’s 2020 Financial Management Conference, which was held virtually due to the COVID-19 emergency.

He briefed attendees on current and future legislative matters of interest, including the potential competition threat posed by health care providers that have not traditionally been direct competitors to home-based care.

Regulatory flexibilities have made it possible for those providers to perform duties typically carried out by home health providers.

“Hospitals have been given permission — for patients that were actively in an outpatient [setting] for that facility — to send them to outpatient therapists by way of telehealth into patients’ homes,” Dombi said. “Rural health clinics and federally qualified health centers have been excused from the normal standard that they could only do care in the home if a home health agency was unavailable. Again, we really can’t quantify the level of competition that has come from that.”

While hospitals and health care providers are generally paid for providing telehealth services to patients, home health providers are not. For them, telehealth visits are still not reimbursable, nor do they count toward Low Utilization Payment Adjustment (LUPA) thresholds.

In other words, agencies often must finance telehealth services out of pocket — and on top of that, they can receive a lower-than-usual reimbursement for a 30-day period of care when doing so. 

That only makes the competition more of a potential threat. Even with Paycheck Protection Program (PPP) loans and Provider Relief Fund grants, home health providers are facing new financial challenges that are difficult to navigate.

According to survey data from NAHC, about 82% of all home health agencies have seen some sort of revenue reduction amid the COVID-19 emergency, with the median reduction coming in somewhere between 15% to 20%.

While a combination of factors — including sky-high personal protective equipment (PPE) expenses and volume disruptions — are to blame, lack of telehealth reimbursement certainly doesn’t help.

“CMS’s position is that [home health providers] are getting enough money through the episodic reimbursement to carry that kind of a cost, particularly when it’s used to substitute in-person services,” Dombi told event attendees. “But the rub is when the reduction in the volume of in-person visits brings that home health agency into a LUPA level of reimbursement, and then that provider of services is in trouble because LUPAs are losers financially for agencies.”

LUPAs — standardized per visit payments instead of a full episodic payment — reduce the reimbursement an agency receives for delivering care.

If a provider doesn’t deliver a certain number of in-person visits to a patient during a 30 day period of care, it is hit with a LUPA. Under PDGM, there are 432 different LUPA scenarios, with visit thresholds agencies must meet ranging from two to six.

Amid the coronavirus, 47% of all agencies report at least a doubling of LUPAs, according to NAHC survey data.

“What it translates to is about $1,000 to $1,500 difference per patient in revenue — so you can see why we’ve seen that revenue reduction,” Dombi said, noting LUPAs are often out of providers’ control amid the coronavirus. “Patients are saying, ‘I’ll take some care, but not all of the care that you might otherwise give in person,’ thereby reducing the full episode payments that agencies would otherwise receive.”

Securing telehealth reimbursement for agencies remains NAHC’s top priority. The Washington, D.C.-based advocacy organization is hopeful legislation will fix the issue in the near future.

Additionally, NAHC is optimistic newfound perceived competitors could be a good thing in the long run.

“We are definitely hoping that, in the end, those competitors become more partners, particularly on the physician side and other practitioner sides,” Dombi said. “But in the short term and long term, one of the greatest silver linings in this is the opportunity to show the breadth and depth of what can be done in home care.”

NAHC is also pushing for additional provider relief funding for home health, home care and hospice providers, as well as federal assistance providing appreciate pay to front-line home-based care workers.

HEALS Act proposal

Dombi’s statements were pre-recorded before Senate Majority Leader Mitch McConnell on Monday unveiled Republicans’ $1 trillion HEALS Act proposal, which would be the fifth overall coronavirus relief package if implemented.

Among its provisions, the HEALS Act would add $25 billion to the Provider Relief Fund and create new flexibilities under PPP. The Republican plan would also add some new liability protections for health care providers.

On top of that, it would extend the repayment timeline for the advanced and accelerated payments distributed by the U.S. Centers for Medicare & Medicaid Services (CMS) in the spring. Furthermore, the plan would extend telehealth wavers, reduce federal unemployment support and provide Americans with another $1,200 stimulus check.

However, home-based care critics say it doesn’t do enough to help various senior care providers.

Take the National Council on Aging (NCOA), for example. The Arlington, Virginia-based nonprofit organization advocates for services, resources and initiatives to help older Americans.

“NCOA is deeply disappointed by the Senate Republicans’ most recent attempt to address the grave and ever-growing COVID-19 pandemic affecting our country because it fails to support and protect older Americans,” NCOA Vice President for Public Policy and Advocacy Howard Bedlin said in a press release. “Older adults are among the most vulnerable Americans in this pandemic because they are facing not just potentially deadly health complications but also catastrophic financial insecurity.”

LeadingAge — a D.C.-based advocacy organization for the long-term care sector — also took aim at Republicans’ plan.

“Among our disappointments, there are no funds dedicated to aging services providers,” Katie Smith Sloan, president and CEO of LeadingAge, said during a Wednesday press conference. “The legislation includes only a fraction of the hundred billion dollars needed to protect older adults, and aging services providers will have to compete with hospitals and other care providers for those funds.”

Sloan also decried the lack of federal financial support for testing and PPE, in addition to the Republicans’ exclusion of “much-needed” hero pay for front-line senior care workers.

“The bottom line is that Congress needs to deliver more than what’s included in the HEALS Act,” she said. “Adults over 65 account for 16% of the U.S. population and 80% of the U.S. deaths to coronavirus. Our leaders must put older adults at the front, alongside hospitals.”

The good news for senior care providers is that the HEALS Act is still only a proposal. Democrats and Republicans are now in negotiations.

Democrats are pushing for more and different supports in the package — likely similar to those outlined in their HEROES Act, passed in the House a few weeks ago.

Whatever form the stimulus package takes from here, experts expect it to pass in August.

The post Dombi: Regulatory Flexibilities Mean More Competition for Home Health Providers appeared first on Home Health Care News.

One long-time stressor they haven’t had to fret about, though, is being audited by the Centers for Medicare & Medicaid Services (CMS). But that’s about to change.

While CMS temporarily paused audit activity back in March as a result of the COVID-19 emergency, it has announced plans to resume enforcement Aug. 3. That means, on top of everything else, home health agencies could also have to worry about proving they haven’t been overpaid by Medicare.

As if that wasn’t enough, at the same time, they could be hit with new, additional types of audits on financial relief received as a result of the CARES Act.

Combined, the various forms of increased oversight could create a huge paperwork burden for already overworked home health providers in the months to come.

PPP audits

While normal fee-for-service Medicare audits are expected to begin in just a few days, audits of Paycheck Protection Program (PPP) loan recipients could start soon thereafter.

Specifically, such audits are expected to begin later this year, according to Matt Wolfe, a partner at the law firm Parker Poe.

That applies to both home health and home care provider PPP loans recipients, none of whom should get too comfortable — even if their PPP loans are relatively small and have been forgiven.

Although the Treasury Department and the Small Business Administration (SBA) have said borrowers who got less than $2 million in PPP loans are considered to have made their requests in good faith, that doesn’t guarantee such loan recipients won’t be audited.

“I think a lot of folks may have breathed a false sigh of relief when they saw that,” Wolfe told Home Health Care News. “But then when [the SBA] issued the interim final rule, they made clear that they retain discretion to audit a borrower regardless of the amount. So if I am a provider, and I received a PPP loan less than $2 million, … it is still critical [to] keep good records to be able to justify retention of loans and the forgivability of the loans.”

According to an HHCN analysis of SBA data, more than 15,000 home-based care providers nationwide received PPP loans of less than $150,000. Approximately 7,400 home-based care providers got loans above $150,000.

All of those entities run the risk of being audited by SBA.

That risk exists for up to six years after the loan is issued. The audit lookback period is on the longer side, but it’s not unheard of, Wolfe said. 

“It’s twice as long as the lookback period typically for IRS audits,” he said. “It is similar to some state Medicaid agencies’ lookback periods. It’s longer than most types of Medicare audits. And it is theoretically shorter than the lookback period that the Department of Justice or U.S. Attorney’s Office would have in a False Claims Act.”

To protect themselves from audits, home-based care providers should keep a paper trail to demonstrate their thought process for each step of the PPP lifecycle. That includes documents to prove an agency’s economic need and justify the amount of the loan, as well as for documentation illustrating how the money was used.

Provider Relief Fund audits

Provider relief funding can also be audited.

If home health providers received more than $10,000 from the Provider Relief Fund, they’ll be expected to report how they used the money by Feb. 15, 2021, according to new U.S. Department of Health and Human Services (HHS) guidance.

“Anytime that HHS is going to be requiring that providers issue reports, they’re not just going to take the providers’ word for it,” Wolfe said. “They’re going to then analyze those reports, and those could lead to further audits in terms of how those funds were used.”

HHS plans to release more details on Provider Relief Fund reporting requirements by Aug. 17.

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