HHVBP Gives Providers More Support with Payers, But May Shrink Business Margins

Last Thursday, I moderated three panels at Home Health Care News’ VALUE event, sat in on another three and talked to dozens of attendees, both on the record and off.

There were plenty of highlights and insights that came from those conversations.

And while everyone seemed to not only have a good time, but also a productive one, my feeling is that the takeaways varied considerably from person to person.

Of course, some of that had to do with the diversified groups of providers involved. But mainly, it had to do with the overarching takeaway I had from our event: that most everyone in home-based care has a different definition of value-based care, and most everyone will take a different path to get there.

So while a shift toward value may be inevitable, there will be seemingly countless roads that lead there – not just one.

In this week’s exclusive, members-only HHCN+ Update, I explore what those different roads and definitions of value-based care may be, and also empty my notebook full of other learnings from the event.

Keep doing what you’re doing?

Outside of the nine states that participated in the Home Health Value-Based Purchasing (HHVBP) Model demonstration, there are providers in 41 states eagerly – or anxiously – awaiting a regulatory shift toward value.

Agencies capable of pouring money and resources into HHVBP have done so, and others not as fortunate have done what they can to shield themselves from looming negative reimbursement adjustments.

But be not concerned, some home health veterans believe. After all, if a provider has been doing all it can for patients and for the betterment of one’s own organization already, HHVBP is just an acceleration of that.

“I do think, in general, a lot of people are more concerned than they need to be for value-based purchasing,” Cheryl Foster, the director of home health for North Kansas City Hospital, said at VALUE.

Broadly, the HHVBP model will score an agency’s performance based on OASIS measures, patient-satisfaction surveys and claims data, among other factors. Hospital-readmission metrics are weighted especially heavily.

Over time, which of those measures are more important could change, as the U.S. Centers for Medicare & Medicaid Services (CMS) adjusted things during the demonstration.

But no matter which measures are valued the most, home health agencies should be able to adjust, Foster argued.

“[HHVBP] is really something that is going to reward the agencies that have been focusing on value all along, because it really it is looking at the outcomes, our rehospitalization rates and patient satisfaction, which are all factors that almost every agency has been benchmarking for years, and has been trying to improve to make a difference,” she said. “And so the value-based purchasing just gives them more motivation for that. And I really feel like it’s going to bring more recognition to what home health can provide.”

Certainly, HHVBP’s savings in the demonstration alone upped the home health industry’s reputation. The program saved Medicare plenty of money – about $140 million per year – which would translate to close to a billion dollars annually on a nationwide basis.

But not everyone has the “steady as it goes” approach to HHVBP or the shift to value in general.

“This is not a nonprofit thing, for-profit thing, publicly traded company thing, a system-based thing or a private equity-backed thing,” Brent Korte, the chief home care officer for the Washington-based EvergreenHealth Home Care, said. “We have to compete from a quality perspective, period, or you’re in deep trouble, period.”

But those two perspectives, while presented differently, are the optimistic and pessimistic versions of the same thought. The feeling is that home health agencies that have strived for better outcomes for their patients should be fine either way.

At the same time, there could be agencies that are doing their best to move towards value-based care and better outcomes for patients – especially complex ones – that don’t want to play the HHVBP game.

“You don’t have to like the game, you just need to know how to play it and play it extremely well,” Dean Lee, the president and CEO of the North Carolina-based 3HC, said. “Complaining about it won’t fix it, but working on your own processes will.”

And while other providers didn’t disagree with that sentiment, some wondered aloud whether playing a game should be intertwined with the idea of taking care of seniors in their homes.

But one can also wonder if there has been a game being played the whole time anyway.

Margin pressures and HHVBP

HHVBP will save money for Medicare; there’s no doubt about that.

But if billions are being saved each year, it begs the question whether providers should get a cut of that. Remember, an upwards adjustment isn’t changing how much Medicare pays providers. As currently designed, HHVBP redistributes home health dollars from low-performing agencies to high-performing agencies.

Overall, HHVBP saved about $600 million during its demonstration.

“Now, I’m still waiting to find out when we get any of that $600 million,” Dr. Steve Landers, the president and CEO of Visiting Nurse Association Health Group, said earlier this year, before reiterating the sentiment at VALUE. “And then when it’s expanded, there’s going to be billions more that we’re going to save. I want to know when the savings check is coming … so that we can provide more services, make sure we have the best technology and that we’ve got the right investments in workflow.”

That’s especially a question providers are pondering as they heard from other panelists throughout the day talking about the investments they have put in – and are putting in – to prepare for HHVBP.

And they likely pondered it even more so when hearing that well-performing agencies in demonstration states didn’t yield significant, upward adjustments despite outperforming more than 50% of their state peers on a regular basis.

Thus, if the investment is there, but the positive margins aren’t always there, that means bottom-line concerns for providers. That reality could have ripple effects throughout the industry, potentially meaning less room for investments in technology, de novo growth and M&A.

For instance, one home health and hospice executive told HHCN he wanted to expand into palliative care, but because that’s not a widely reimbursable service and HHVBP shrank his margins, he’s been unable to.

On the other side of the coin, many insiders have long expected consolidation to occur as a result of the nationwide implementation of HHVBP.

I do wonder whether margin pressures would add to that belief. Or, instead, maybe they could once again push off what people have told me is “an inevitability” in consolidation.

I guess it depends on who plays the game well, ultimately, and who doesn’t.

From the payer perspective

Aetna CMO Dr. Kyu Rhee challenged providers in attendance to change the idiom value-based care to values-based care at, ironically, the VALUE event.

Thinking of the concept slightly differently, he believes, will lead to different – and better – results for home-based care providers and the health care system overall.

Delivering on values, for instance, such as reducing inequities in the system and caring for people who are often overlooked.

Another value is trust, according to Rhee. And that trust comes in the form of ethical data sharing with payers.

“It goes back to all the values we’ve been learning in this pandemic, which is the importance of partnership and trust,” Rhee said. “And I think topics like risk are incredibly important in value-based care. But I would ask home-based providers to reflect on trust. And one key component to build relationships with payers is data sharing.”

Meanwhile, EvergreenHealth Home Care says it has already gained more trust and attention from payers after going through the HHVBP demonstration.

While the bottom-line positive impact from HHVBP may not have been overwhelming, it did serve the agency well in other ways.

“There were peripheral benefits,” Korte said. “And they were huge. And we were very well aware of them, which was part of the ROI. We were at the table with payers like never before.”

For the providers that haven’t yet experienced HHVBP, they’ll have to wait and see to find out if they are at the table with providers “like never before.”

But once it comes, there will always be another value-based regulatory change that could be around the corner.

“If you don’t think value-based purchasing is coming to hospice, think again,” Lee said. “Because it is coming eventually.”