It’s the interest rate, stupid.

Home health, home care and hospice industry voices – including myself – have regularly pointed toward internal factors affecting M&A over the last two and a half years. In the end, the overarching, main headwind was always the extremely high interest rates that were put forth by the Federal Reserve to combat inflation.

Those internal factors had an effect on the specific M&A that did occur, and they will have a major effect on the M&A activity that occurs moving forward.

But searching for internal reasons to find out why M&A had cooled since early 2022 was largely a fool’s errand.

In March of 2022, the Fed started moving historically low interest rates up a notch. Specifically, on March 17, 2022, the federal interest rate moved from near-zero to 0.50%. Then, those hikes continued on a consistent basis, up until July 26, 2023, when the federal interest rate hit 5.50%. 

On Wednesday, the Fed announced a half-percentage point cut to the interest rate, in what is expected to be the first of a few cuts as it now turns its eyes toward other problems outside of inflation.

Meanwhile, the trend line for home-based care M&A ran diametrically opposed to the interest rates. As interest rates rose, home-based care M&A fell, besides a few small spikes in a quarter or two.

“I believe the interest rate environment has really been more significant than perhaps people have acknowledged,” Les Levinson, partner and co-chair of the Transactional Health Law Group at Robinson + Cole, told me this week on a webinar. “When you were doing deals in 2021 and 2022 – at what was functionally equivalent to a zero interest rate environment – you needed a lot less equity to do a deal. And the risk in that transaction was being basically covered by debt coverage. That evaporated as interest rates shot up.”

In this week’s exclusive, HHCN+ Update, I’ll dive into the interest rate cut and what it will mean for the home-based care M&A market in the near-term future.

Rate cut kickstart

All signs point to Wednesday’s rate cut being the first of a few, as the Fed begins to focus more on unemployment and less on inflation.

Based on the last couple of years, that would suggest that we’ll see far more transactions in home-based care in the near-term future.

After that first hike in March 2022, things changed in the formerly robust M&A landscape.

In Q3 and Q4 of 2020 alone, there were 95 total transactions in home health, home care and hospice, according to the M&A firm Mertz Taggart. Over the same time period in 2021, there were 106 transactions.

Then, in 2022, after the first rate cut, Q3 and Q4 saw 50 total transactions, an over 50% decrease compared to the year prior.

Outside of a few quarters with modest spikes, M&A has stayed historically down, up until present day.

Private equity-sponsored deal counts, too, were historically low.

Now that the interest rate trend line is on the other side of the mountain, expect home-based care activity – and PE-backed activity – to pick up.

“We’re at the tail end of an almost five-year cycle that started with COVID and the Fed stimulating the economy,” Mertz Taggart Managing Partner Cory Mertz told me on the webinar. “Interest rates went to about zero. Sellers were burned out. They wanted to get out early before the election and a new administration increased the capital gains tax rate. It was really a perfect storm of activity, and it was, quite frankly, a bubble. The Fed raised fund rates at a pretty healthy clip starting in 2022, and that really slowed everything down for a couple of years. But now, we’re starting to see signs of life.”

The Fed was expected to lower rates Wednesday, and most were waiting to see whether it was by a quarter or half of a percentage. Its decision to go the latter route will open things up even further than previously expected.

Over the next year or two, it’s likely the rate will continue to tick down toward around 3%.

During the quiet period, demand for quality home-based care assets has not been down, according to Mertz. Instead, the market conditions have kept transaction levels down. Those market conditions also include the fact that, with near-zero interest rates and a rush toward home-based care during the pandemic, multiples climbed significantly.

Since then, buyers have waited for the multiple expectations to normalize.

“These same buyers have still been hungry for quality deals,” Mertz said. “They don’t want to, and they’re not willing to, pay a premium for deals that don’t warrant a premium [price]. Now, premiums today compared to premiums in 2021 or 2022 are down a little bit, but not a whole lot. For a quality agency, at least. That’s my experience.”

As multiple expectations are balanced out, though, it’s likely that demand finally rises up and brings deals to fruition.

But active, quality home health agencies – in particular – have become more scarce over the last few years.

“A quality home health asset, I think, is the premium in post-acute care,” Choice Health at Home CEO David Jackson told me on the webinar. “Hospices have a really nice base. Home care [agencies] have really steady valuations, much more steady than the others. They don’t go up and down as much as a premium home health care asset that is doing well from a compliance, quality and financial perspective. Those are becoming more and more rare every day, and that’s because it’s a very difficult industry.”

Based in Tyler, Texas, Choice Health at Home provides a wide range of services in the home, including home health care, home care and hospice. Backed by Coltala Holdings and Trive Capital, the company has executed over 20 transactions in the last four years. In addition to Texas, it has a presence in Nevada, Utah, Colorado, Arizona, Oklahoma and Kansas.

In home health care, buyers generally prefer executing deals in the back half of the year anyway, and particularly in Q4. That’s because, after the Centers for Medicare & Medicaid Services (CMS) releases the final home health rule in October or November, there’s generally more certainty around payment.

A lot has changed

While deals have been put on ice, a lot has changed under the surface.

As buyers and sellers get back to the table, they’ll be discussing home-based care sectors that don’t look like they did three to four years ago.

In home health care, CMS has proposed three cuts to payment, and finalized two. More than 50% of Medicare beneficiaries are now underneath a Medicare Advantage (MA) plan, too. MA plans tend to be far less for home health services than traditional Medicare.

Home health providers – even the quality ones – are struggling to adjust to a world with a less certain payer landscape. They are dealing with CMS cuts to traditional Medicare, while also vying for higher rates from MA plans. Some have even cut ties with MA plans to prove a point, and also to allocate their resources to better payers.

In home care, the finalized Medicaid Access Rule included the 80-20 provision, which would mandate that 80% of reimbursement for home- and community-based services (HCBS) go to workers. That provision won’t be implemented for another nearly six years, but it is still likely to affect M&A.

For instance, on one end, many providers believe that scale is necessary to sustain business performance under such a provision. Addus Homecare Corp. (Nasdaq: ADUS) has stated this regularly and has also been a very active acquirer of late.

Outside parties, however, may see the provision as a reason to avoid HCBS – for now.

Addus has also benefited from the M&A downturn itself. While interest rates have been high, Addus has significantly expanded its home health and home care footprints.

“Realistically, over the last 12 to 18 months, we’ve not seen a lot of competition out there,” Addus CEO Dirk Allison recently said. “There’s been the occasional smaller strategic player that’s bought a few deals on a localized basis. From a PE standpoint, it’s really been very slow as far as competition for the last bit. Now, obviously, if rates come down in September, as everybody’s expecting, there’ll be a point where PE will come back in and that’s fine. It’s been a market in which up until the last year or so, we’ve always operated with competition from those folks.”

VitalCaring President Luke James also told me earlier this year that there were advantages to growing during an M&A and payment downturn. His company also recently agreed to acquire divested assets of Amedisys (Nasdaq: AMED), but that deal is contingent on the Optum-Amedisys deal closing first.

Either way, if the Fed continues on the path it set out on this week, times are changing.

When M&A ticks back up, buyers will have different factors to consider. But the buyers – the formerly dormant strategics and private equity players – will be back.

The home health and home care sectors have been labeled as ripe for consolidation over the last decade. But consolidation has not come as quickly as many believed it would.

Now that the dust is settling, however, M&A has the chance – again – to reshape the face of home-based care.

The post ‘Signs Of Life’: With Interest Rates Ticking Downward, Home-Based Care M&A Is Looking Up appeared first on Home Health Care News.

The Centers for Medicare & Medicaid Services’ (CMS) proposed home health payment rule, released Wednesday, included significant cuts for the third straight year. Those cuts, among other proposed changes, raise questions over the stability of the industry in the coming years.

It has providers asking themselves and others the question: “Why us?”

For an industry that demonstrably saves money for the larger health care ecosystem, such harsh and continued cuts seem to be contradictory, home health stakeholders believe.

“These cuts are nothing short of draconian,” Stacey Smith, the vice president of public policy at AccentCare, said Wednesday.

On top of those cuts is the threat of CMS clawbacks for what the agency believes to be overpayments to home health agencies over the last five years. That clawback number has risen to $4.55 billion in total – more than $966 million than CMS previously estimated. And it will keep growing until further, temporary cuts are implemented.

CMS has expressed that it doesn’t want to put multiple cuts – of the permanent and temporary variety – on top of each other. But some providers see more cuts, for more years, that will keep them in payment purgatory. They would rather rip the Band-Aid off.

“CMS is not proposing the implementation of temporary adjustments, now estimated at a truly bewildering $4.5 billion,” Stephens wrote in an analyst’s note yesterday.

“Bewildering” and “draconian” feel like two descriptors of the 2025 proposed rule that most providers and advocates would agree with.

In this week’s exclusive, members-only HHCN+ Update, I’ll dive deeper into the cuts, but also consider a few other noteworthy proposals included in the rule, including changes to the Home Health Value-Based Purchasing (HHVBP) model, the Conditions of Participation (CoPs) and more.

Predictably unsustainable

In 2022, CMS proposed a 4.2%, or $810 million, decrease to aggregate payments for 2023. It ultimately finalized a permanent behavioral adjustment cut to the Patient-Driven Groupings Model (PDGM), but also finalized a 0.7%, or $125 million, increase.

In 2023, CMS proposed a 2.2%, or $375 million, decrease to aggregate home health payments for 2024. It finalized a 0.8%, or $140 million, increase compared to 2023 aggregate payments, while again implementing permanent cuts.

Wednesday, it proposed a 1.7%, or $280 million, decrease to aggregate home health payments for 2025.

The final rule is expected in late October or November, but the jig is up. Providers believe CMS, to push its cost-cutting agenda, lessens the blow in the final rule to get provider and advocate heat off its back.

And with that, it’s time to evoke the Paul Kusserow quote that I revisit when proposed and final payment rules are released.

“My concern is the game that we play with CMS,” Kusserow – then the CEO of Amedisys Inc. (Nasdaq: AMED) – told me two winters ago. “It’s a long, exhausting game. They come up with a proposed significant cut. The whole industry gets all worked up about it and runs to Washington. I’ve done this, and everybody in our business has. We lobby, lobby lobby, they get a lot of pressure, and then they come back with something that is just mediocre. It’s not enough for us to get Congress all worked up about it to pass legislation. But it’s enough to keep us in purgatory. We have to get through this dribbling sense of inadequate reimbursement.”

While providers have become acutely aware of this game, it appears CMS will continue to play it.

In this game, though, CMS still slides in permanent cuts that will have long-lasting effects on the home health industry. And what’s most disheartening about that for providers is the fact that home health care is one of the only industries that is both future-facing and cost-saving.

“Home health care is a proven, efficient spend in that it reduces the total health care cost for the entire system,” Choice Health at Home CEO David Jackson told me. “It continues to be frustrating that we are looked at in a silo, and not seen for the significant value that we bring. … It’s frustrating for providers, who are seeing an increased difficulty in retaining and maintaining staffing levels that are sufficient to serve the public.”

Indeed, home health care does save health care systems and health care payers money. It’s why private payers want more home health services for their members, not less.

It’s also why HHVBP saved Medicare hundreds of millions during its demonstration period, and why it is expected to save Medicare billions more over the coming years. It’s important to note that the home health-focused HHVBP is among the few CMS Innovation Hub initiatives that has produced savings – a fact that recently led to its head, Elizabeth Fowler, having to testify in front of Congress.

During that hearing, Republican Chair of Energy and Commerce Cathy McMorris Rodgers (R-Wash.) said she has “a hard time believing any objective observer could look at the results thus far and describe CMMI as a success.”

What’s more, though more home health care is good for the overall system, Medicare fee-for-service cuts almost guarantee there will be less services to go around for an aging population moving forward. That’s particularly the case because of Medicare Advantage (MA) penetration, with MA plans already paying far less for services than traditional Medicare.

It is not CMS’ job – it has asserted – to consider MA payments for home health services. Because of that, an incomplete picture of home health agency profits are often painted by the Medicare Payment Advisory Commission (MedPAC) and others.

“MedPAC needs to be instructed to include all Medicare reimbursements and related costs rather than just Part A,” VitalCaring President Luke James previously told HHCN. “Part C — or Medicare Advantage — now represents more than half of the Medicare beneficiaries in our country. Home health providers didn’t ask for this reality, nor did they cause it. But the industry is reeling from the numerous negative implications this reality has caused.”

Instead, providers are banking on higher rates from MA plans, as well as tech investments to reduce costs on the back end. But there’s no guarantee those measures alone will be enough, particularly for the thousands of providers without scale.

“Mom-and-pop agencies are a necessity for the delivery of care in the United States,” Jackson said. “They serve smaller communities, niche communities. I’m always fascinated at what a nurse in rural East Texas or West Texas has been able to do, that a big company just never would have done. … That is something I think we need to foster in the system.”

What else is in the proposed rule

Every year, in addition to the estimated decrease or increase in base payment, there are many other elements of a proposed rule to consider.

The now-nationwide HHVBP model could change. CMS is accepting comments for consideration around future performance measure concepts. In the past, some providers argued that certain HHVBP measures were out of home health providers’ control. For instance, patients in extremely poor condition when received by home health agencies are sometimes unlikely to get better, no matter how exemplary the care they receive is.

In addition to that request for information, CMS is also considering how it could further embed health equity measures into HHVBP.

Jackson noted that cuts on their own have the chance to worsen health equity.

“Nurses are going to be magnetized to these more affluent markets,” Jackson said. “It’s going to hurt the ability to obtain talent in rural markets, in markets that have difficulty finding staff. That’s going to have a negative impact on health equity.”

That will likely be exacerbated by the minimum staffing level requirement in nursing homes, which will naturally make the competition for nurses more fierce in post-acute care.

CMS is also taking a greater look at home health access. In the past, MedPAC has viewed access based on how many agencies exist per U.S. county. But counties vary by size, as do home health agencies. Providers have argued that access is worse off than the agency-per-county metric would suggest.

“We are seeking public comments on factors that influence the services HHAs provide, the referral process, limitations on patients being able to obtain HHA service, such as rural location and availability of staff, plan of care development, and the HHA’s communication with patients’ ordering physicians and allowed practitioners,” the 250-page proposed rule read. “We ask the public for data, detailed analysis, academic studies, or any other information to support their comments that provide a direct link to patient health and safety.”

Outside of questions around initiation to care, CMS specifically wants to know the answer to this question: “What challenges, barriers, or other factors, such as workforce shortages, particularly in rural areas, impact rehabilitative therapists and nurses in meeting the needs of patients at the start of care and early in the plan of care?”

Of note is also that CMS seems to accept some industry data – for instance, regarding health equity – but not all. Last year, CMS scoffed at most of the data that the industry put forth around referral rejection rates and contemporary home health access.

CMS also proposed an “acceptance to service” policy, which it believes at least some home health agencies already have.

“This new standard would require the HHA to develop, implement, and maintain through an annual review a patient acceptance to service policy that addressed criteria related to the HHA’s capacity to provide patient care, including, but not limited to, anticipated needs of the referred prospective patient, case load and case mix of the HHA, staffing levels of the HHA, and competencies and skills of the HHA staff,” the proposal read. “In addition, we propose the HHA would have to make public accurate information about the services offered by the HHA and any limitations related to the types of specialty services, service duration and service frequency.”

The staffing-specific requirements could be the successor to the nursing homes’ minimum staffing level mandate. While it’s unlikely a similar mandate would come into home health care, given its one-to-one nature, a more stringent policy around staffing capabilities could come to fruition.

Potential mitigators

More lobbying efforts will follow this proposed rule. The Partnership for Quality Home Healthcare CEO Joanne Cunningham believes that this year being an election year will actually bode well for the industry.

Jackson said the same.

“In an election year, we need to be loud,” he said. “We need to be vocal.”

In the past, the industry has had no issue getting measures like The Preserving Access to Home Health Act introduced. The issue has been getting it to move after introductions in the House and Senate.

CMS may again reduce the cut by the time the rule is finalized. But it’s clear that the agency is not budging on its behavioral adjustment thesis.

Despite it being unlikely, Congressional action may be home health providers’ best bet in 2024.

The post ‘Draconian’ And ‘Bewildering’: Inside The 2025 Home Health Proposed Payment Rule appeared first on Home Health Care News.

Trent Smith, the CEO of the Oklahoma City-based Accentra Home Health and Hospice, is behind the new startup, Apricot, which leverages generative AI specifically. Accentra has been using Apricot for months, but now Smith has other providers signing up for it, namely Elara Caring and Choice Health at Home.

The ethos behind Apricot is around giving time back to home health nurses. The generative AI can help cut documentation time by “over 85%,” according to the company.

Beyond those time-saving qualities, there is massive potential upside elsewhere. For instance, reduced turnover costs, more clinical capacity, greater value-based care capabilities and Medicare Advantage (MA) opportunities.

“When I discovered generative AI and started messing around with it, it occurred to me that this technology could be used to help our industry in a number of different ways,” Smith told Home Health Care News. “I thought I could build a tool and use it for my own agency, so we built one to help nurses complete their startup care documentation accurately and quickly.”

On Accentra’s end, it delivers home health and hospice to over 500 patients across the state of Oklahoma.

Apricot, on the other hand, officially announced its launch last week. It is backed by the venture capital firm Cortado Ventures, which is also based in Oklahoma City.

While the AI tool was initially created for internal use only, Smith realized its enterprise value after an emotional conversation with a nurse who said the reduced documentation time gave her the opportunity to watch a movie and cuddle with her daughter after work.

“That is when I realized that this was something that I could give to the entire industry,” Smith said. “We pivoted from it being an internal tool for my agency to turning it into a business that we were going to give to all agencies.”

After that, Choice Health at Home CEO David Jackson was one of the first to get a glimpse at what would become Apricot. Jackson later mentioned the tool in a HHCN story, which then caught the eye of Elara Caring CEO Scott Powers.

Smith, Jackson and Powers all believe the tool will make the role of a home health nurse far more desirable, a prominent goal for an industry dealing with staffing shortages and burnout. Smith said Apricot is on track to serve more than 800 nurses and 20,000 patients monthly.

Both Choice Health at Home and Elara Caring are currently in the pilot stage of embedding the tool into their operations.

“I just saw a solution to some problems that we had,” Smith said. “And I was fortunate to know people that could help me build it. We found a nail and then went and built a hammer for it, as opposed to building a hammer and looking for a nail.”

Apricot’s application

Smith described Apricot as the “scribe in the scrubs” of nurses. Jackson described it as a tool that “pulls sources of truth from all over.”

“The Oasis specifically is a big, intimidating document,” Jackson told HHCN. “And very small sections of it are patient facing. We have documentation softwares, we have scrubbers, we have all this different stuff. It’s very hard to get everything to do one thing. But what I love about this is it’s pulling sources of truth from all these different places.”

Part of what Jackson is excited about is how the platform can augment work in home health care, in general. He believes it’s the best industry to be in, given the flexibility.

If Apricot can improve workflow and reduce burnout, it could be a mitigator to staffing shortages in the industry.

“We have the best gig,” Jackson said. “You go to the hospital floor, you can’t leave in the middle of the day to go to a doctor’s appointment, to pick up a kid from school. In home health, you can do that. But with that autonomy, it creates some difficulties for nurses. When you have a lot of autonomy as an employee, the documentation can crush someone. It’s very overwhelming. So, this doesn’t create the documentation for them. It doesn’t come up with the documentation for them. It just helps them get it into your system. And it helps them do it largely at the bedside.”

Powers called out the discrepancy between net promoter scores among home health patients and home health workers. With more time spent documenting than actually delivering care, home health clinicians only have an NPS of 29, Powers said. Patients, on the other hand, have an NPS of 94.

That’s why Powers had been searching for ways to “bring joy back to the job.” It’s been one of Elara Caring’s main focuses of late, which is why when he saw Jackson mention Apricot, he inquired further.

“If we can bring the joy back to the job, we can give more flexibility and we can actually provide people more care,” Powers told HHCN. “And, it’ll actually probably lower the costs for all of us, which also allows us to provide more care to people, and provide more benefits and all the kinds of things we all want to do. When we saw the article, I looked at my team and said, ‘Why the heck aren’t we doing this?’”

After staff satisfaction, there are a host of other areas where Smith, Jackson and Powers see Apricot helping.

One that Smith pointed out specifically is the ability to take on more MA patients.

“If you can increase the amount of patients a nurse can see in a standard eight-hour day, your incremental costs to adding more patients to your roster is minimal, and almost zero cost in a lot of cases,” he said. “Even if 100% of your additional patients are MA patients, those turn into great gross margin patients. And those are the exact same patients that we’re all struggling to accept. A lot of agencies just simply can’t afford to take the 40% pay cut on revenue when taking in these patients. But by decreasing this documentation time and allowing nurses to see more of them, we’re all able to say yes a lot more.”

Elara Caring and Choice Health at Home have pilots underway, with a strategy to expand utilization across their organizations in the near-term future. Specifically, Powers said that Elara Caring is handing the tool to clinicians that will likely be willing early adopters of a new technology.

As for Smith, he’s hopeful that Apricot will eventually spread across the home health industry.

“We’ve just been super lucky,” Smith said. “And we’re looking forward to onboarding more customers in the future.”

The post Elara Caring, Choice Health at Home Praise New Home Health AI Tool ‘Apricot’ appeared first on Home Health Care News.

Plano, Texas-based Resilient is a technology company that enables health care organizations to deliver higher-acuity care in the home.

Meanwhile, Tyler, Texas-based Choice Health at Home is a home health, hospice, palliative care, rehabilitation and home care services provider. It operates locations across Arizona, Colorado, Kansas, Louisiana, Nevada, Oklahoma and Texas.

The collaboration between the two companies kicked off because of another one of Resilient’s partnerships, Jackleen Samuel, CEO of Resilient, told Home Health Care News.

“We were introduced through [Community Hospital Consulting],” she said. “We were introduced because we’re providing the hospital-at-home programs for the hospital and Choice Health at Home has been their preferred provider for home health. It made sense for us to work together.”

In 2023, Resilient joined forces with Community Hospital Consulting – a Community Hospital Corporation organization – on a joint venture partnership.

On its end, Choice Health at Home has a relationship with Community Hospital Consulting that spans almost 20 years.

Even prior to this introduction, through Community Hospital Consulting, leaders at Choice Health at Home had been aware of Resilient’s work.

“Jackleen and Resilient did a lot of good work during the pandemic with the initial initiative from CMS, so we’ve watched that from afar … and we were excited to have the opportunity to work with Resilient,” Choice Health at Home CEO David Jackson told HHCN.

Through the partnership, Choice Health at Home will have access to Resilient’s comprehensive tech stack.

“We’re developing, managing and operating these hospital-level programs into the community, and when we do that, we introduce different technologies to be able to execute on higher-acuity care in the home,” Samuel said. “Some of those technologies are the actual operations and management tied to that, but others are like our 12-lead ECG device that we have a partnership with and have integrated into our program. It’s also remote patient monitoring, 24/7, continuous monitoring, and then being able to utilize those to build on the high-acute programs that we’re developing for the hospitals.”

Samuel also pointed to Choice Health at Home’s experience serving communities as being a key component of this collaboration.

“It’s one thing to program develop and whiteboard what it might look like to reinvent the delivery of health care, it’s a whole other thing to actually deliver that care,” she said. “As we’ve become pioneers or experts in the space of program development for hospitals to enter the community, working with somebody like Choice Health at Home that has a 20-year relationship in these communities and delivering this care, and knowing the clinical aspects of delivering that care, is the one of the best partnerships that we could have thought of.”

Both Samuel and Jackson noted that the partnership between Choice Health at Home and Resilient aims to bridge the gap between home health care and hospital at home.

“This is a new initiative, it’s the frontier of what’s happening,” Jackson said. “The current technologies that home health utilizes are not built for hospital at home, so we hope that a lot of the work that we do with Resilient will help bridge that gap to make hospital at home and home health accessible to more patients.”

Looking ahead, Samuel believes that this type of partnership will become more common among organizations delivering hospital-level care in the home.

“I think hospital at home becomes a marriage between hospitals, technology and providers in the home, and I don’t think it’ll be successful unless home health agencies are involved,” she said.

The post Hospital-At-Home Enabler Resilient Healthcare Partners With Choice Health at Home appeared first on Home Health Care News.

Leaders at companies like Choice Health at Home and The LTM Group have found themselves in this exact position. As a result, they have created a framework for determining when to diversify their business portfolios versus when to focus on developing their core care services.

Choice Health at Home is a company that hasn’t shied away from building upon its core services. CEO David Jackson asks himself a few questions when considering if the company should explore new business lines. The first question is — will it improve the patient experience?

“We’re always looking at how we improve the patient pathway in our system and in health care in general,” Jackson said on Thursday during a panel discussion at Home Health Care News’ Capital + Strategy conference in Washington, D.C. “It can be really challenging for the elderly to navigate post-acute care. If we have a partner in an adjunct field that is doing a great job, and we see that across our entire footprint, we’ll be more hesitant to add that service line, if we feel like the patient pathway is not obstructed … and we cannot improve on how that partner is providing the service.”

The Tyler, Texas-based Choice Health at Home is a home health, hospice, palliative care, rehabilitation and home care services provider. It operates locations across Texas, Arizona, Louisiana and Oklahoma.

When making a decision, Choice Health at Home also asks how it would impact the company’s mission.

“Our mission is the pursuit of excellent health care in the home,” Jackson said. “As we evaluate, say, infusion, could we improve the patient’s access to care and infusion at home? Could we do it successfully in the pursuit of excellent healthcare? Is one of our other service lines going to suffer?”

Plus, Choice Health at Home looks into the financial ramifications of adding a new business line.

“I’m an entrepreneur, I founded our business back in 2007,” Jackson said. “I ventured into DME in a year when Congress decided to cut reimbursement by 25%. I learned that you need to assess the financial ramifications to your business.”

At The LTM Group, the line of thinking is similar.

David Kerns, CEO of The LTM Group, also looks at whether diversifying their business portfolio gives the company the opportunity to move upstream in the health care ecosystem.

“You’ve got the government here, you’ve got payers, and then you have providers,” he said during the panel discussion. “By putting together these different business lines — and any additional business lines that we’re looking at — is this going to help us move upstream? Is this going to help us be able to take on risk, and develop through partnerships with payers?”

The LTM Group is Dayton, Ohio-based network of home health, hospice and home care agencies across locations in Michigan, Ohio and Indiana. It provides care to about 2,000 patients.

Balancing innovation while maintaining the quality of The LTM Group’s core services is also top of mind for Kerns.

“Our industry is moving so fast that really your biggest risk is not taking risk and not innovating quickly enough,” he said. “We partner really strongly with our QA team, and with our compliance team, and make sure that they’re involved in all that decision making.”

Similarly, Jackson noted that it’s imperative for leaders to be able to quickly identify who can execute on the necessary strategies when moving into a new service line.

For example, when Choice Health at Home began offering remote patient monitoring services, the company teamed up with experts in the sector, leveraging their expertise. Today, the company monitors almost 2,000 patients remotely.

Kerns also believes that partnerships are key to moving into new services lines. Still, he warned providers to keep their eye on the ball.

“Focus on quality, be careful of partnerships that distract you from your core mission,” Kerns said.

Kerns was also quick to acknowledge that challenges can present themselves when a company is trying to move into a new space, a sentiment Jackson agreed with.

Choice Health at Home knows about challenging new service lines firsthand. Over the years, the company has gotten deeper into palliative care, for instance.

Palliative care is known for having a tough reimbursement environment, which makes some home-based care providers hesitant to dive in.

“It brings so much value to the patient,” Jackson said. “The complexity has been that … the financial success of a program is very difficult.”

Choice Health at Home forms partnerships with physician groups to drive its palliative care offering. 

“[With palliative care], there’s really not a pure play payer strategy for home health,” Trina Lanier, chief growth officer at Choice Health at Home, previously told HHCN. “Home health gets paid for a social worker going out to do a visit management with heart failure or COPD patients, like all chronic diseases. The purely palliative visit, we coordinate care with physicians, with physician groups, who manage this through the physician fee schedule. What our company has found is that collaborating care with these [clinicians] brings more quality of life to the patient.”

The post To Stand Pat Or Not: When Home Health Providers Should Expand Service Offerings appeared first on Home Health Care News.

Part of that conversation with hospital and health system partners includes convincing case managers that patients will be better suited at home.

“The longer a patient lays in a hospital bed, I’m convinced that it catches on fire,” Choice Health at Home CEO David Jackson said at the Hospice News/Palliative Care News Palliative Care Conference in Tampa, Florida. “Our mission is the pursuit of excellent health care in the home. Our value prop to hospitals when promoting palliative care is, ‘We want to continue these difficult conversations in a less stressful environment.’”

The Tyler, Texas-based Choice Health at Home is a home health, hospice, rehabilitation and home care services provider that operates mainly in Texas, as well as Louisiana and Oklahoma.

Showing value to health systems and hospital partners at the top of the health care ecosystem has been a main focus for Jackson and his staff as they continue to build out the fill care-at-home continuum.

Choice Health at Home is in a position to have those conversations with referral partners and has the bandwidth to make the transition to the home more manageable.

“If you discharge out into our organization, these are the things that will happen,” Jackson explained. “We will strive to integrate a nurse practitioner group that can actually go out and have a controlled conversation for four or five hours with the family. An MSW is going to engage and continue to continue to try to provide additional resources for this complex patient. We want to be an extender and that’s a value prop that we can provide because the systems — in most cases — don’t have the resources to do that part of discharge.”

Once referral partners understand what at-home palliative care can bring to the table and what the comprehensive care plan looks like, doors open, Jackson said.

Another key value prop that palliative care offers is as a bridge in the continuum of care. It’s always patient-specific and when done correctly, meets patients where they are.

“Palliative care is not a one-size-fits-all type of service,” Kaiser Permanente Senior Director of Hospice and Palliative Care Gina Andres said. “But it does meet the needs of patients wherever they’re at in that continuum. We really focus on giving the right care at the right time in the right place.”

Kaiser is one of the largest health systems and medical groups in the country. Its health plans cover over 13 million people across eight states.

Its home-based care network is made up of about 26 agencies, including companies like LHC Group, Bayada Home Health Care and Pavilion Medical Home Care & Staffing.

Some patients will need palliative care services in a traditional setting. Others will use it strictly as a bridge to hospice, Andres said.

However, it can also be used with a more innovative approach in addressing the gaps that exist in the care continuum.

“I think there’ll always be a need for inpatient palliative care,” Andres said. “But if we touch the patient in outpatient palliative care and we’re giving them education and information and support, it prepares them as they go down the line in their serious illness and need care at home.”

It can also be a lifeline for both patients and caregivers who are going through a new and oftentimes confusing process.

“For the caregiver and the patient, palliative care is such a gift,” Andres said. “There are so many patients that are not ready for hospice, either physically or emotionally or for whatever reason. The number one thing we see with patients and families is a lack of caregiver support and a lack of knowledge. There’s nothing like palliative care for these patients because if they don’t have palliative care, they fall through the cracks. And then what happens? They wind up with unnecessary hospital stays.”

The post How Home-Based Care Providers Are Leveraging Palliative Care In Hospital Partnerships appeared first on Home Health Care News.

These leaders have earned the high esteem of their peers by hurdling operation challenges in the space, creating impressive recruitment initiatives, consistently embracing new ideas and constantly keeping an eye on the future.

Home Health Care News recently caught up with four C-suite executives to find out which leaders they believe are driving home-based care forward and why.

Last month, HHCN talked to five leaders in the home care space.

***

Trent Smith is someone, regionally, that I believe is on the cusp of really changing how our nurses engage in documentation.

Operating multiple hospice and home health sites under the Accentra Health banner in Oklahoma, Trent has created a software AI interface that will work with the three largest home health EMR providers.

I have not seen a product that engages both AI and speech recognition at the level his product “Apricot” does. It’s going to completely change the game. Trent is attacking the core issue holding our industry back from having the “best” nursing job. If we can move to 100% in home documentation with high execution on accuracy all while ensuring our nurses are not working into the night, it is a massive step forward.

I believe he is very close and his work will advance not only his agencies, but others.

— David Jackson, CEO of Choice Health at Home

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Shelly Sun and her leadership team are doing a fabulous job paying attention not just to where the industry is today, but focusing on where it’s going to be in two years. They are positioning their business well to be serving the needs of patients and payers as the post-acute care needs evolve.

Shelly is an inspirational leader and someone who maintains a strong presence and public visibility with her team and patients. Home-based care is extremely personal and private. She’s done a great job providing patients and their families with that sense of personal touch, accountability and caring that makes them comfortable engaging with BrightStar Care and their franchisees.

I think she has also been very forward thinking in engaging in workforce growth through caregiver development and recruitment programs. She’s also done the same forward thinking and innovation on working with payers and ACOs on advancing the concepts of pre-acute care versus post-acute discharge from hospital-only care, which is where the industry is heading.

We will continue to see Shelly and the BrightStar Care team being leaders and innovators in our industry.

— John M. Kunysz, president and CEO of Intrepid USA Healthcare Services

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The leader I would like to spotlight is RJ Gagnon of Androscoggin Home Healthcare & Hospice.

As I’ve talked with RJ at events and discussed what he is doing at Androscoggin, I am convinced that he is the future of the industry. He’s strong in the key business areas that every company needs to survive a future of uncertain rates. He’s curious and always looking to find ways to improve himself and his company. He’s intensely inquisitive and that has led to new innovations, as he has worked to bridge himself from a traditional CFO to a COO with a much broader set of responsibilities. I have also been impressed by the generosity that he has with others, sharing tips and tricks on best practices, EMR systems, and corporate governance.

As I’ve worked with him as a part of the HHFMA Advisory Board, I have learned how to better run my agency and how to properly balance the competing needs of a finance head and a company head. I know that with Ken and him in charge Androscoggin is well-positioned to be a winner and I want to take this same know-how and apply it across our organization.

— Beau Sorensen, COO at First Choice Home Health & Hospice

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Beau Sorenson, at First Choice Home Health & Hospice, is an innovator, a conscientious leader, and a rising star in home care. He’s forward thinking, hardworking, and understands the power of giving back to the industry. Beau is not looking at yesterday’s answers to tomorrow’s problems. He is deeply engaged in payment reform, legislative work, and leads his agency as an innovator.

— Brent Korte, CEO of Frontpoint Health

The post Home Health Leaders On Leaders: 4 C-Suite Execs That Are Driving The Industry Forward appeared first on Home Health Care News.

HIG Growth Partners finalizes sale of Just Home Healthcare Services

H.I.G. Growth Partners — a growth capital investment affiliate of investment firm H.I.G. Capital — has sold portfolio company Just Home Healthcare Services.

In April, H.I.G. Growth Partners sold Just Home Healthcare Services’s personal home care and adult day health business segments to Honor Health Network. Terms of the transaction were not disclosed.

In a separate transaction, H.I.G. Growth Partners sold Just Home Healthcare Services’s group home and independent living program business segments to RHA Health Services. That took place in October.

“H.I.G. was an exceptional partner that helped us strategically expand new service lines and improve operational performance,” Zhanna Basina, founder and CEO of Just Home Healthcare Services, said in a statement. “Their team demonstrated a deep understanding of the home and community-based services industry, helped us navigate challenges during the COVID-19 pandemic, and made sure that our clients received consistent, high-quality care.”

Fair Lawn, New Jersey-based Just Home Healthcare Services is a provider of medically focused adult day health and in‐home personal care services.

The Pennant Group acquires Southwestern Palliative Care and Hospice

The Pennant Group Inc. (Nasdaq: PNTG) has purchased Southwestern Palliative Care and Hospice.

“We are pleased to continue our growth in the state of Arizona, and complement our agencies in Southern Arizona,” Brent Guerisoli, CEO of Pennant, said in a news release. “This acquisition further solidifies our commitment to these communities, and expands our ability to provide life-changing hospice services to residents of Yuma and its surrounding communities.”

Eagle, Idaho-based Pennant is a holding company of independent operating subsidiaries located across the U.S., with a network that includes 99 home health and hospice agencies and 51 senior living communities.

On its end, Yuma, Arizona-based Southwestern Palliative Care and Hospice delivers home-based end-of-life and serious illness care, as well as bereavement services and veteran programs.

“Southwestern has a deep connection to the community it serves, and its staff have touched countless lives since its inception,” John Gochnour, president and COO of Pennant, said in the release. “We are honored to partner with the wonderful Southwestern team of skilled clinicians and compassionate caregivers in delivering life-changing hospice services to the residents of this community.”

Lutheran Senior Services signs agreement to buy St. Louis Home Health

Lutheran Senior Services has signed a definitive agreement to acquire St. Louis Home Health. The transaction is slated to close at the end of December.

“This is an exciting development for older adult patients and families because it expands LSS’ best-in-class home health services, adds specialty orthopedic expertise, and expands access to high quality care to more patients with an extended footprint in Illinois,” Adam Marles, president and CEO of Lutheran Senior Services, said in a statement. “We’re proud to welcome St. Louis Home Health to the [Lutheran Senior Services] family and will continue to serve their current orthopedic patients regardless of their age.”

Lutheran Senior Services delivers a number of services including home health, private duty home care, hospice and palliative services, as well as aging answers support navigation and care management.

St. Louis Home Health is a home health agency that serves 3,500 patients annually in Missouri and Illinois.

“For over 25 years St Louis Home Health has strived to provide the highest quality home care services to orthopedic patients and it is gratifying to know that level of quality and compassionate care will continue from [Lutheran Senior Services], a faith-based nonprofit,” Bill Hopfinger, owner and CEO of St. Louis Home Health, said in the statement.

Choice Health at Home purchases Lumicare Hospice

Texas-based Choice Health at Home has signed a deal to acquire Lumicare Hospice.

“Lumicare Hospice aligns perfectly with our mission to improve the lives of individuals and families facing serious illness,” Trina Lanier, chief growth officer of Choice Health at Home, said in a statement. “We are thrilled to be providing services in Colorado and excited to expand on our current footprint in Texas and Arizona.”

The Tyler, Texas-based Choice Health at Home is a home health, hospice, rehabilitation, and home care services provider. It operates locations across Texas, Louisiana and Oklahoma.

When the acquisition is finalized, Kevin Peay, a founder of Lumicare Hospice, will serve as president of operations of its Colorado location.

“At Choice the mission is to enhance the life of every person we serve through the pursuit of excellent care,” Peay said in the statement. “This aligns so well with the services and mindset of Lumicare. I am looking forward to continued growth and expansion throughout the Choice footprint with this goal in mind.”

Evive Brands acquires The Brothers that just do Gutters

Evive Brands announced that it is acquiring The Brothers that just do Gutters, a gutter installation and maintenance company.

Evive Brands is a multi-branded service organization that brings together franchise systems, including Executive Home Care and Assisted Living Locators, under one umbrella.

This deal further expands Evive Brands portfolio, which represents more than 200 franchise locations across the U.S.

“The integration of The Brothers that just do Gutters into our family of brands represents a significant step in our strategy to offer comprehensive services for home and personal well-being,” Jason Weidder, chief growth officer at Evive Brands, said in a press release. “This acquisition not only extends our reach into the home maintenance sector but also aligns with our mission to support and enhance the lives of our clients.”

Upon completion of the acquisition, Ryan Parsons, CEO of The Brothers that just do Gutters, will step into the role of CEO at Evive Brands.

“We are excited to become part of Evive Brands and to contribute to its vision of enhancing the quality of life for clients,” Parsons said in a statement. “Joining Evive provides us with new opportunities to expand and evolve, enabling us to reach and serve more homeowners.”

The post Transactions: HIG Growth Partners Sells Just Home Healthcare Services; The Pennant Group Buys Southwestern Palliative Care and Hospice appeared first on Home Health Care News.

The recommendation is another chapter in the contentious relationship between the commission and the home health industry. It also recommended that Congress eliminate any payment updates for hospice providers in 2025.

MedPAC — established by the Balanced Budget Act of 1997 — regularly informs Congress on Medicare spending and policy.

Repeatedly, its recommendations have come down hard on the home health industry.

According to MedPAC, there were about 11,300 home health agencies in 2022 that served about 2.8 million fee-for-service Medicare beneficiaries. In total, MedPAC estimates Medicare spent $16.1 billion on home health services in 2022.

MedPAC’s main reason for the 7% reduction is because it believes margins in home health are too strong.

Specifically, MedPAC cited home health margins at 22.2% on average — higher than the long-term average of 16.8% since 2001.

Evan Christman, a senior analyst at MedPAC, reported during a public hearing this month that the rise in margin is indicative that Medicare fee-for-service is paying significantly more than the cost.

One factor contributing to these supposed margins is a significant drop in the number of visits per 30-day period. Since the introduction of the Patient-Driven Groupings Model (PDGM) in 2020, these visits have decreased by over 15%, according to MedPAC.

That reduction includes a 3.5% drop between 2021 and 2022.

“Several factors may account for this decline, but an important one may be that the decline and the share of fee-for-service beneficiaries receiving inpatient hospital services — which are common precursors to home health — have declined on a per capita basis by 5.6% since 2020,” Christman said.

Home health providers, as usual, took exception to MedPAC’s calculations and their overall philosophy after the recommendation.

“MedPAC continues to contemplate only traditional Medicare rates and margin,” Choice Health at Home CEO David Jackson told Home Health Care News in an email. “That is a considerable disservice to the over 11,000 Medicare licensed and certified agencies across the nation that are providing care to beneficiaries under both Medicare and Medicare Advantage programs. While I understand the historic stance that Medicare should not supplement cost of care for non-Medicare patients, that premise seems inapplicable given the purpose of Medicare Advantage programs to provide services to the Medicare-eligible population in lieu of Medicare.”

If MedPAC continues to use its current approach to calculating margins in home health care, Congressional members and their staff “will continue to see a partial and distorted picture of reality,” VitalCaring President Luke James also told HHCN in an email.

“MedPAC needs to be instructed to include all Medicare reimbursements and related costs rather than just part A,” James said. “Part C — or Medicare Advantage — now represents more than half of the Medicare beneficiaries in our country. Home health providers didn’t ask for this reality nor did they cause it. But the industry is reeling from the numerous negative implications this reality has caused.”

Association leaders from the Partnership for Quality Home Healthcare (PQHH) and the National Association for Home Care & Hospice (NAHC) called MedPAC’s approach “flawed” and its conclusions “misleading.”

“Policymakers need a holistic, complete analysis that accurately illustrates the state of home health delivery across patients and payers,” PQHH CEO Joanne Cunningham said in a statement. “In particular, policymakers need to seek deeper analysis from MedPAC and other government policy entities about the access challenges happening right now that are compromising this important delivery system.”

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Enough time has passed since the CY 2024 home health payment rule was finalized for providers to dive into its details, mull them over and respond.

Though the rule is more favorable than the proposal the U.S. Centers for Medicare & Medicaid Services (CMS) first introduced in June, home health providers are not pleased with the final outcome.

CMS didn’t address – and in some cases furthered – the concerns that many providers and industry stakeholders raised in the months and weeks leading up to the rule’s finalization.

The rule comes with a 0.8%, or $140 million, aggregate increase to home health payments. In June, CMS proposed a 2.2% aggregate decrease for 2024, which would have been an aggregate decrease of $375 million.

Plus, the rule finalized a -2.890% adjustment, which is half of the cut originally proposed back in June.

“My initial reaction was that where we landed was an improvement over what was proposed,” Choice Health at Home CEO David Jackson told Home Health Care News. “I believe home health provides substantial economic upside for the Medicare program and for the beneficiaries. I continue to disagree with the methodology, as far as how it’s viewed as budget neutral.”

When the rule was first released, some providers felt that relief. But that quickly wore off.

“I quickly came to the stark realization that CMS still was continuing with deep cuts — albeit they were kicking them down the road — despite the prevalence of respected third-party data highlighting that cuts have made problems with access to care a reality, not just an assumption,” David Totaro, chief government affairs officer at Bayada Home Health Care, told HHCN.

Similar to Totaro and Jackson, other providers have voiced pushback to what they believe is CMS doubling down on its intention to implement the permanent adjustment cuts in the coming years.

Providers pointed out that even though the rule reduces a portion of the overall cut that CMS will be collecting next year, the total amount of the cut actually increased in the rule.

“According to their language in the rule, it is likely to increase again next year, when they continue to run these permanent adjustment calculations,” Andrew Baird, vice president of government affairs and policy counsel at Enhabit Inc. (NYSE: EHAB), told HHCN. “The fact that a smaller percentage of the cuts will be applied just in 2024 really is not much comfort, compared to CMS’ much larger commitment to a multi-year policy of continued permanent adjustment cuts.”

One of the more troubling aspects of the rule, cited by a number of providers, was what they believe is CMS’ flat out rejection of data and evidence, regarding patient access to home health, as well as the rising cost of care.

During the public comment period, a number of providers, industry stakeholders and advocacy associations cited data that painted a bleak picture of the struggles providers were already facing, and the ways that additional cuts would further disrupt access to care.

“It’s such a concerning posture from our regulators, because it just further creates this notion of a black box of policy generation, where only CMS insights and information are valid inputs in the overall process,” Baird said. “It really, ultimately, sort of begs the question, will any stakeholder data, will any stakeholder evidence, ever be sufficient for consideration by CMS in this process?”

Totaro also described CMS as seemingly “dismissive” of the data they received from various members of the home health industry. He also noted that CMS has yet to address the fact that home health care is underfunded.

“Instead, they are continuing to push a policy that proposes deep cuts year after year because of their interpretation of budget neutrality, creating serious long-term implications for the entire industry,” Totaro said. “Let’s not be fooled — while the net impact of the 2024 rule is a positive gain of 0.8%, it is solely due to a woefully low market basket update of 3.0%.”

Totaro offered mild praise for CMS’ continued focus on health equities, however.

“It’s good to know that we have the same goals and objectives to ensure that all marginalized populations have access to health policies, but that we just differ on how to get there,” he said.

Looking ahead, providers are determining what the final rule’s impacts will mean for business.

At Bayada, this may mean limiting investment into certain areas of the business, according to Totaro.

“In the short term, a 0.8% increase will not cover the increased expenses that we all have faced in the past year,” he said. “Longer term, the fact is that businesses hate indecision. With nearly $4 billion in clawback cuts still pending, without any idea when they might occur, our business will be hesitant to invest in innovation and expansion.”

For Enhabit, the focus will be on managing resources as efficiently and responsibly as possible while waiting to see what the fallout will be.

“At Enhabit, we’re going to continue delivering what we promise, which is providing a better way to care for every single patient wherever they call home in this country,” Baird said.

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