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.”

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Today, however, the term can mean so much more — and at-home care providers need to start preparing their operations for a wave of new telehealth possibilities.

TytoCare — which recently announced a retail relationship with Best Buy (NYSE: BBY) and also has multiple health system partnerships across the country — is just one example of telehealth’s steady evolution.

With its U.S. operations based in New York, TytoCare is the maker of an FDA-cleared telehealth device capable of carrying out a long list of medical tests in the home setting, including comprehensive heart and lung evaluations, as well as ears and throat checkups.

Through the company’s software platform, that biometric data can then be sent to the company’s health care provider partners, whose physicians can subsequently diagnose and even treat patients’ conditions remotely.

“Our company was established in 2012 with the vision of essentially creating a technology that can bring virtual care to the next level,” Menahem Shikhman, vice president of strategic partnerships at TytoCare, told Home Health Care News. “We wanted to create the capability of doing remote diagnosis — an acute or primary care physical exam — but without the doctor and patient being in the same room.”

Overall, TytoCare has raised about $56.7 million in funding, according to online startup tracker Crunchbase. Its most recent round closed in January, with $9 million in new funding led by Ping An Global Voyager Fund.

TytoCare’s consumer-focused telehealth product — TytoHome — is available to Best Buy shoppers for roughly $300, with virtual visits conducted by American Well’s LiveHealth Online costing less than $60 each.

But more than 50 health care organizations have teamed up with TytoCare by using its enterprise-focused offerings, branded as TytoPro and TytoClinic.

Louisiana’s Ochsner Health System is among those entities, according to TytoCare. As is Sanford Health, one of the biggest rural health systems in the United States.

Sioux Falls, South Dakota-based Sanford Health officially announced it was partnering with TytoCare on June 3.

The health system currently leverages TytoCare’s tech on an acute-care basis, but it hopes to expand its use into the home moving forward, Dr. Josh Crabtree, senior vice president of clinic operations at Sanford, told HHCN.

“The use case for this [TytoCare] device might be only limited by your imagination,” Crabtree said. “I think it would be safe and fair to say certainly [home health] is on our radar.”

The Sanford Health system includes 44 medical centers, 482 clinics, more than 200 senior living facilities, providing health care services across parts of North Dakota, South Dakota and Minnesota. Its flagship home health division — Sanford Home Health — provides services in and around the Sioux Falls area, in addition to Luverne, Minnesota.

“With the exam capabilities this device has, I could see potential use cases being follow-up on post-surgical patients or chronic disease management,” Crabtree said. “I think that could fit with our home care population.”

Apart from its relationship with Sanford, TytoCare is also coming off a recent announcement that its telehealth platform has joined the Epic App Orchard marketplace, which streamlines electronic health record (EHR) integration.

In general, integration of technology solutions is a common pain point for home health providers.

“Since I’ve gotten into home health, there is no shortage of technology solutions for every problem that we can find,” LHC Group Inc. (Nasdaq: LHCG) Chief Strategy and Innovation Officer Bruce Greenstein previously told HHCN. “But they’re often disorganized, not integrated and not adopted in a way that equates to organizational or behavioral change on behalf of the provider or the patient.”

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