Home Health Providers Are Beginning To Tie Clinician Compensation To Value-Based Care Success

Home health providers are adjusting their operations to better set themselves up for value-based care.

One thing they need to be sure of, though, is that those adjustments are making their way down to the front line.

“From an agency standpoint, providers are thinking as their reimbursement model changes, how are we being judged against competitors and how are patients choosing us?” Jonathan Dickinson, senior manager of financial consultation with SimiTree, told Home Health Care News. “They’re noticing that a lot of it is based on quality. Value-based purchasing is going to impact their revenue. Now they’re starting to ask themselves, ‘How do we then incentivize our clinicians who are doing the work in the field to emphasize that quality?’”

Operationally, providers are shifting to models – both inside fee for service and outside of it – that require better quality of care, sometimes with fewer visits.

But that message needs to make its way down to the front-line workers.

“Providers are saying, ‘You’re giving us great quality as a clinician — even though you may do 10 visits or less a month — we’re still going to pay you the same incentive,’” Dickinson said. “Because the quality is going to drive our reimbursement. We typically are seeing this more as a quality incentive around a quarterly bonus.”

For example, a provider could pay a clinician $30 for every visit after their goal in a quantity-based incentive program.

Now, providers are paying clinicians $10 for every additional visit and the other $20 is tied to quality incentives that go back to a patient’s outcome.

“If you have a clinician who continually just says, ‘I’m just going to do visits and not care about quality,’ they’ll still get a small portion of incentive and revenue, but it won’t be as big as if they were to actually drop back the number of visits and do more quality work,” Dickinson said.

To execute this type of plan, communication is paramount.

The more an agency can articulate how the quality of care is tied to compensation, job security and the overall health of the business, the better off everyone will be.

“The more an agency can correlate the fact that winning on value protects their jobs and allows them to have compensation increases, the more they’ll be able to understand how this actually impacts them,” Frontpoint Health CEO Brent Korte told HHCN. “It deeply impacts them.”

Based in Dallas, Frontpoint is a home health and hospice company that specifically tailors its business model to take on Medicare Advantage (MA) patients. It’s also betting big on value-based arrangements.

At the end of the day, agencies can’t pay clinicians more when they don’t have the money to spend, Korte said.

The inflation for clinician compensation is also a hurdle for agencies as they try to find different ways to incentivize nurses to join and stay in home health care.

“Right now, we’re all very well aware of the fact that clinician compensation is deeply inflated — beyond the market,” Korte said.”The market cannot sustain this. I don’t care if you’re talking about hospitals, home health, hospice or skilled nursing facilities. When you have nurses that, in 2023, are making as much as physicians were in 2019, that’s something the market simply can’t bear.”

According to SimiTree, nursing salaries have risen between 3% and 5% in 2023. At the same time, nursing vacancies are at 25% across the country.

The cost of an employee leaving an agency varies and is dependent on multiple factors, but SimiTree estimates each loss comes out to an average of $160,000.

To combat those potential losses, 78% of agencies are using salary compensation models and 22% of agencies are using per-visit compensation models.

Androscoggin Home Healthcare & Hospice has established its own approach to compensation incentives in all five of its service lines.

“Our goal was to identify measures that would drive organizational performance and to establish procedures that will track the performance compensation process,” Androscoggin CFO RJ Gagnon said at the National Association for Home Care & Hospice’s (NAHC) annual conference last month. “We focused on metrics that are typically areas that need improvement and areas that are indicative of quality and performance that influence our quality ratings.”

The Maine-based Androscoggin is a nonprofit operator that employs 500 workers across all 16 counties in the state.

Those metrics Androscoggin zeroed in on include patient satisfaction, bed transferring, bathing, chart audits and the management of medications.

Each metric was given a certain weighted percentage, and if a clinician was the top performer — based on the percentage of optimal goals achieved — that clinician’s bonus was doubled.

“Looking ahead, our goal is to drive compensation for staff as recruitment and retention strategies,” Gagnon said. “Performance compensation should be developed to enhance employee experience while increasing organizational performance.”

Now, more than ever, it’s important to bring those caregivers and clinicians into the fold when coming up with long-term strategies in value-based care.

“The winning companies are going to educate their clinicians and their mid-level leaders to understand that value is going to drive the success of their company,” Korte said. “It’s going to provide job security, benefits and everything that we all really want out of our roles.”