Essentia Health – a regional, nonprofit health system with a substantial home health arm – announced this week that it will no longer serve as an in-network provider for UnitedHealth Group (NYSE: UNH) and Humana Inc. (NYSE: HUM) Medicare Advantage (MA) plans. It is the latest example of home-focused health care providers drawing a line in the sand with certain payers.

Those examples can still be classified as anecdotal, but they are close to forming a trend.

It’s also likely that each move like this will beget similar moves by other providers.

“Like many other health systems, we have been re-evaluating our participation in Medicare Advantage plans that place added strain on our patients by too often denying or delaying their care,” Dr. Cathy Cantor, Essentia’s chief medical officer for population health, said in a statement. “This was not a decision we made lightly. The frequent denials and associated delays negatively impact our ability to provide the timely and appropriate care our patients deserve. This is the right thing to do for the people we are honored to serve.”

Headquartered in Duluth, Essentia Health provides care across Minnesota, Wisconsin and North Dakota. Its network includes about 15,000 employees, 14 hospitals, 78 clinics, six long-term care facilities, six assisted living and independent living facilities, and much more.

It also has a robust home health and hospice business.

The company has informed patients that it will no longer serve as an in-network provider for the above-mentioned MA payers beginning Jan. 1. Open enrollment for MA begins on Oct. 15 and ends on Dec. 7. Essentia specifically called out other plans that patients can join in network prior to the year turning over.

Sanford Health, a health system based in Sioux Falls, South Dakota, announced a similar plan this week.

“This is a difficult decision, but ending our partnership with Humana Medicare Advantage is the right thing to do for our patients,” Martha Leclerc, vice president of corporate contracting for Sanford Health, said in a statement.

These comments mirror remarks made by home health leaders over recent years. The national plans have drawn the most ire from home-based care organizations.

This week’s exclusive, members-only HHCN+ Update ties these topical news items to the MA struggles that home health providers face.

‘Care delayed is care denied’

Humana and UnitedHealth Group’s UnitedHealthcare are the two largest MA administrators in the country. According to KFF, Humana has 16 million MA members, or about 29% of the market, while Humana has 6 million members, or about 18% of the market.

That market share gives the two companies some semblance of leverage with providers, and also makes it hard for providers to walk away from them.

But providers are beginning to take that step, as evidenced by the Essentia Health and Sanford Health decisions this week.

While both those organizations provide home health care, the largest example of walking away thus far in the industry was Enhabit’s (NYSE: EHAB) decision to terminate its contract with UnitedHealthcare last month.

Enhabit CEO Barb Jacobsmeyer further explained that decision last week.

“It’s important to remember that the reason we created are payer innovation strategy, about two years ago, was because at that time we had United as a large payer and then a few regional smaller contracts that had come along with acquisitions over the years,” Jacobsmeyer said during a discussion at the 2024 Wells Fargo Healthcare Conference. “Those combined contracts had us at about a 40% discount to Medicare. Obviously, that’s not sustainable. We started the payer innovation strategy to have more and better contracts.”

Enhabit’s issue with UnitedHealthcare was payment for services being at a 40% discount compared to Medicare fee-for-service payments. Essentia and Sanford mentioned denied and delayed care.

But generally, providers have told me their issues with MA plans are two-pronged – it’s about claim denials and prior authorization hurdles, but also about payment, too.

“The prior authorization process should be based upon the patient’s primary diagnosis and have a standard number of visit authorizations based upon evidence-based medicine,” Intrepid USA CEO John Kunysz told HHCN in 2022. “Care delayed is care denied.”

A few providers terminating contracts won’t make a huge dent in these payers’ pockets.

But those terminations could embolden other providers. And that could turn this into a larger trend.

“I would just say that my heart was warm the other day when Enhabit walked away from the table with UHC,” Pinnacle Home Care CEO Shane Donaldson told me last month at HHCN’s FUTURE conference. “I think that we’ll look back on that as being a significant event.”

An interesting wrinkle is the fact that both Humana and UnitedHealth Group have recognized the value of home health care through acquisition. Humana owns CenterWell Home Health, while UnitedHealth Group owns LHC Group and is in the process of acquiring Amedisys Inc. (Nasdaq: AMED).

Home-based care leaders within those organizations do believe that their work will ultimately lead to better payment and value recognition from payers over the long term.

Broadly, and for now, home health providers currently don’t see their value being recognized by these large payers.

“We’re all tasked with the same problems,” Vanderbilt Home Care Services President Amy Harrison told me at FUTURE. “Humana has denied hundreds of thousands of dollars of our claims, because they claimed that we billed before we had the plan of care signed and all the orders signed. But we’ve clearly submitted all the medical records to them with proof. They send you in circles. It’s like they’re incentivized to not pay you.”

The post More Home Health Providers Sunset Relationships With Largest Medicare Advantage Payers appeared first on Home Health Care News.