Even before entering negotiations with MA plans, providers should have a clear understanding of the challenging reimbursement environment they are walking into, according to Fred Bentley, managing director at the research and advisory firm ATI Advisory.

“Reimbursement rates have really leveled off for Medicare Advantage plans, even as medical expenses have really started to grow,” he said during a panel discussion at Home Health Care News’ FUTURE conference last month. “Whereas plans, in the past, were making, in some cases, double-digit margins, they’re going to pat themselves on the back and give high fives if they hit 3% this year.”

In other words, MA plans aren’t in a generous mood, according to Bentley.

When Elara Caring prepares for MA negotiations, the company remembers to enter with a long-term mindset.

“We have to understand that as much as we want to go in there and just be frustrated with the fact that they aren’t bending to our will, and giving us the rates we want, that we’re going to be dealing with this MA plan down the road,” Brent Nash, chief development officer at Elara Caring, said during the discussion. “They’re going to be our partners in the longer-term, so you need to go in with a positive mentality that you can address a pain point of theirs.”

Dallas-based Elara Caring is a home-based care provider with about 200 locations across 18 states. The company serves more than 60,000 patients.

This focus on addressing the MA plans’ pain points has been a key strategy for the company.

“We’re going into the conversations talking about their issues, and the things that we can do to help,” Nash said. “In the environment that [Fred described], where [plans] are completely getting hammered on from an MLR perspective, if you go in there and you just say, ‘I want more money,’ they’re probably going to just laugh you out of the room. You need to say, ‘I want to help you. What’s your pain point? Are you worried about readmission or ED diversion?’”

Nash noted that providers need to sell their ability to mitigate the cost of the MA plans’ pain points, specifically.

Joe Shannon, vice president of business development at HomeCentris Healthcare, emphasized the importance of providers highlighting their differentiators during these negotiations.

“If you’re talking about some of your data and it’s aligned with all of their other current partners, that might not be enough to move the needle,” he said during the discussion.

HomeCentris Healthcare is a Owings Mills, Maryland-based portfolio of companies that offer a variety of home-based care services, including home health, personal care, therapy services and more.

One of HomeCentris Healthcare’s main MA strategies has been focusing on local and regional plans. This has allowed the company to have more face-to-face contact with decision makers.

“We’re looking for partners that aren’t just interested in membership growth and risk adjustment scores, but really folks that are looking at how we’re taking care of the patients all the way through, and really being able to change the trajectory of what’s going on with their members,” Shannon said. “We’ve had some success with local and regional [plans], having a lot of discussions, soup to nuts, about how we’re able to support their members.”

Similarly, Nash emphasized the importance of getting the right people at the table during these negotiations.

“Bringing the actuaries to the table — that’s going to be really important,” he said. “You need someone who’s got an all encompassing view of the MLR, not just the person who’s focusing on home health or [personal care services].”

Bentley believes it’s important for providers to remember that oftentimes they aren’t the priority of MA plans.

“Home health is not a top concern for Medicare Advantage plans,” he said. “They’re obsessed with hospitalizations. They’re obsessed with specialty drug costs and a few other things. That means the folks you’re negotiating with have a very narrow purview. The art of this is getting the right folks to the table without upsetting the contracting folks.”

In addition to actuaries, it’s important to get chief medical officers to the table.

“The only time we’ve seen success where home health organizations have been able to move into mutually beneficial, innovative contracts … is when you can find a chief medical officer who actually has purview into the business side of plans, or some something equivalent to a CMO who understands the clinical value of home health care,” Bentley said.

Shannon pointed out that in his company’s dealings with regional or local MA plans, there are less siloes between these various departments.

Once a provider is at the table it’s paramount that they come armed with information.

“It’s really understanding, how are those plans doing on their star ratings — that’s publicly available data,” Bentley said. “How are they doing on enrollment — that’s publicly available data. It’s really understanding those specific pain points.”

Home-based care providers are also in a position to tout their access.

“Access is a huge calling card for home health,” Bentley said. “It’s not just access, it is about taking these complex patients that are clogging up the hospital.”

Ultimately, Bentley advises providers to see the bigger picture.

“It’s being myopic around thinking, ‘Well, I’m just here to negotiate on home health, and it’s not having a bigger picture view of your impact on the Medicare Advantage members’ outcomes experience,’” he said. “It’s really understanding your bigger value prop.”

The post For Home Health Providers, Getting The ‘Right Person’ At The Table Is Crucial In Medicare Advantage Negotiations appeared first on Home Health Care News.

The deal falls in line with Elara Caring’s strategy of acquiring companies that will facilitate footprint growth in their existing markets, and its expansion goals in the Midwest.

“There is significant growth potential in their current markets and Caregivers adds to our existing hospice operations in Kansas,” Elara Caring CEO Scott Powers told Home Health Care News in an email. “This aligns with our expansion goals in the Midwest. Additionally, Caregivers has developed substantial market share since 2004. Their quality outcomes, strong relationships with providers, and their community-based approach to care made them an ideal partner, and this deal enhances our ability to deliver exceptional, cost-effective home care across the care continuum. Culturally, this was an ideal fit, and that is a significant factor when considering new assets.”

Dallas-based Elara Caring is a home-based care provider with about 200 locations across 17 states. The company serves more than 60,000 patients.

Founded in 2004, Caregivers Home Health is a privately-owned company that operates in Kansas and Iowa.

“We have a great reputation for care in the communities we serve. Our patients love us and providers rely on us. We would only hand over the reins to a partner in whom we have absolute faith. Elara is that organization,” Caregivers Home Health CEO Ed Schulte said in a press statement. “Our team members, patients, and referral partners are in good hands.”

The deal marks Elara Caring first deal of 2024. Last year, Elara Caring purchased Assisted Daily Living. The company also acquired American Family Home Health in 2023. These deals allowed Elara Caring to expand in Rhode Island and Illinois.

“We have completed three successful acquisitions over the past year, enhancing our capabilities and reinforcing our commitment to delivering innovative, high-quality care,” Powers said in the email. “We prioritize partnerships with like-minded organizations that share our values of excellence and service.”

M&A will continue to be part of Elara Caring growth strategy, according to Powers.

“Elara is a growth-oriented company, we see inorganic, acquisitive growth as a natural complement to our organic expansion strategy,” he said. “Our acquisitions bolster our other growth initiatives, including de novo locations and further penetrating our existing markets. In a highly fragmented home care industry, we will continue seeking culturally aligned partners to expand our capabilities and reach, ultimately enhancing our ability to serve our patients. We expect to continue to expand and acquire for the remainder of 2024 and 2025.”

The post Elara Caring Acquires Caregivers Home Health, Grows Midwest Footprint appeared first on Home Health Care News.

Believe it or not, some home health providers have figured out a way to get what they want from Medicare Advantage (MA) plans. At least to a certain extent. 

Frontpoint Health has become a standout in the industry for running towards MA opportunities with gusto, rather than simply being dragged by the penetration..

From Frontpoint Health’s inception, the company wanted to avoid depending on Medicare fee for service for the majority of its revenue. The company’s CEO, Brent Korte, even pointed out what he viewed as a “subservient relationship” between payers and providers.

Korte explained that for Frontpoint Health, the key to walking away from the negotiation table happy is understanding what’s important to MA plans.

“At that first conversation, we essentially try to show up with a cadre of information and start with questions that lead to a better understanding of what they really want out of home health,” he told Home Health Care News. “They have to know what we are able to provide, in order to sort of glean some benefit for their folks, so a lot of it is early education too, and an absolute focus on data.”

Backed by Cimarron Healthcare Capital and Tacoma Holdings, Frontpoint Health is a home health and hospice provider that centers its business on MA patients. The Dallas-based company delivers care across 176 counties in Texas.

Dallas-based Elara Caring is a home-based care provider with about 200 locations across 17 states. The company serves more than 60,000 patients.

Brent Nash, chief development officer at Elara Caring, describes the company’s approach to MA payer negotiations as “holistic and multifaceted.”

“We’re not looking to go in and negotiate simply based on rate,” he told HHCN. “It would be nice if payers were receptive to that, but they aren’t. What you really need to be doing is working to get all of the right players in the room, so that you can have a conversation about outcomes and return on investment.”

This means getting plan executives, medical directors, network executives, and even actuaries in the room, so that Elara Caring can speak in-depth about the value that the company is able to deliver, according to Nash.

Similar to Frontpoint Health, data is a big part of Elara Caring negotiation approach as well.

“We’ve gone out and commissioned studies using the different Medicare and MA databases that exist from CMS,” Nash said. “We believe that we’ve been able to prove that home care services for those who are prescribed home care, when they’re discharged from a hospital and they receive them, drive material value, versus those folks who are prescribed the home care services and don’t receive it. In fact, MA plans often lack on receiving that level of access, so we try to use that data to compel the conversation.”

Rates are, understandably, top of mind for most providers. Korte believes that figuring out what a fair rate means to Frontpoint Health has guided the company forward.

“Our goal is to be at a fair rate with all of our insurance companies,” he said. “Frankly, many other large home health organizations that can solve the network adequacy issue for insurance companies assume a good rate is parity with Medicare, and that’s not a reality.”

Frontpoint Health has come to define a fair rate as one that puts them on track to building a deeper long-term partnership with an MA plan.

“We want to be a provider to your patients,” Korte said. “And a partner to your organization to the point that you can see on your P&L through your medical loss ratio, and your network adequacy calculations, the value of our organization because we keep people home. It’s worth you paying us a fair amount of money to provide that care.”

A good MA player, Nash believes, possesses qualities such as good systems, good contract loads, and the willingness to work with the provider when there’s an error in the contract load.

Still, Elara Caring is looking for something more when they form these MA relationships.

“We want payers who are proactive in thinking about the ways that they can administer contracts, administer value-based care, monitor the outcomes measures that we need them to monitor, in order to be able to put in place a partnership,” Nash said. “In the end, we need to build that trusting relationship with them.”

In the last six months, Elara Caring signed a contract with an MA plan. Nash noted that the plan recognized that the company’s ability to deliver care drove value for the plan and its patients.

“Once that contract was put in place, and we had the trusting relationship, we were really able to increase our admissions for that payer by over 100% per month, which meant for the right patients, they were getting more care, at the right time, in a venue where they want to receive care, which is in their homes,” Nash said.

Despite being able to identify what the right payer relationship looks like for each of their companies, both Korte and Nash also have a clear understanding of when to walk away from opportunities that aren’t benefiting their organizations.

Korte, in particular, has distilled it down to a simple citieria.

“The simple answer is, we walk if we’re losing money,” he said. “There are a handful of insurance companies that are recalcitrant about rates — we are not here to subsidize the bottom line or MLR of these major insurers. That said, we work really hard to bend the cost curve, so that none of our contracts are at a loss. The trick here, in my opinion, is not just getting better rates, but it’s providing real value. That means that you have to run your organization providing excellent care and lower costs.”

The post How Home Health Providers Get What They Want Out Of MA Plans 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.

“[The partnership] very much honors our values of exceptional service, innovation and results,” Thomas Southern, administrator of skilled home health at Elara Caring, told Home Health Care News. “To be able to partner with a company like Constant Therapy Health allows us to deliver a very dynamic solution to the patients we serve. It’s an innovative approach that allows us to lean into the use of technology in a way that’s meaningful, both to the patients and caregivers.”

Dallas-based Elara Caring is a home-based care provider with about 200 locations across 17 states. The company serves more than 60,000 patients.

Constant Therapy Health’s platform is an application that allows clinicians to more deeply interact with patients.

“Elara Caring, a trailblazer in the home health industry, is revolutionizing patient care through cutting-edge technology and data-driven solutions,” Veera Anantha, founder and CEO of Constant Therapy Health, said in a press statement. “As we collaborate with Elara Caring, we’re excited to contribute to their mission of delivering exceptional, personalized care to every patient they serve who is diagnosed with a neurological disorder or brain injury.”

Constant Therapy Health’s platform uses 85 different evidence-based speech-language and cognitive therapy interventions.

“Think of patients with mild cognitive impairment, or early to mid-stage Alzheimer’s, CBA patients, stroke patients, people with aphasia,” Southern said. “It has a speech recognition algorithm within it, so we can also target things like voice. It really gives us the ability to extend our reach in the home with an evidence-based format.”

In addition to extending care in the home, the partnership also alleviates some of the documentation burden on clinicians. Specifically, clinicians were able to shave 10-15 minutes off of documentation time, per patient.

Overall, the partnership led to increased time savings, specifically 60-90 minutes per day for a clinician with a six-patient caseload.

“That really feeds into that work-life balance, and gives them back that time in their day to be with their families and enjoying life,” Southern said.

Before the full-scale roll out of the partnership, Elara Caring launched a pilot program with Constant Therapy last year, which took place over the course of six months. The pilot program included 115 patients across three markets.

The program resulted in 92,000 additional exercises independently at home, 17% increase in task accuracy and 54% improvement in task processing speed.

Ultimately, Southern believes that this partnership is part of Elara Caring’s larger embrace of innovation in relation to care delivery.

“We want to provide the best care possible in the home and to be able to help people through whatever struggling moment they have,” he said.

The post Elara Caring Partners With Constant Therapy Health To Drive AI, Time-Saving Solutions appeared first on Home Health Care News.

Artificial intelligence is likely to be a society- and business-altering technological development.

But, just like the advent of the internet before it, AI’s emergence will undoubtedly lead to as many empty promises from business leaders as it does actual use cases.

That’ll particularly be the case in the early innings of AI, which I believe we are currently in.

At any health care conference over the last five years or so, AI chatter was as ubiquitous as COVID-19 chatter was during the early days of the pandemic. But I’d often come away from that chatter with no more information on how providers planned to put AI to use than I had before.

This year is likely to be one of the first where a good chunk of providers are actually putting AI to use, however. That’s why, in Home Health Care News’ trends for 2024, we included the prediction that “providers will find ways to more seamlessly and strategically integrate AI.”

Over the last few months, I have tried to cut through the empty promises and ask providers directly: How are you currently using AI, or how do you foresee your organization using it in the near-term future?

More direct questioning, unsurprisingly, led to more direct answers.

In this week’s exclusive, members-only HHCN+ Update, I hope to take you behind the curtain on providers’ AI strategies across home-based care.

An AI prologue

First things first, every provider I talk to about AI generally starts off with a similar opening statement on AI, which is that they do not believe AI or other technology will be able to replace hands-on, human care.

Particularly in the early innings, that seems like the right mindset.

“We hear so much about tech in the home,” Visiting Nurse Health System CEO Dorothy Davis told me. “Not that I don’t think that’s an important piece, but I think the revolution is going to be on the consumer side and on the caregiver side. Tech is an enablement. If the user and the person impacted doesn’t understand it, the tech means nothing.”

That’s a key caveat. If AI cannot be implemented in a way that can be understood by a select few people – or in some cases a large group of people – then it is useless.

It’s also generally useless, particularly for generative AI, if there is not good data to feed into it.

Providers can’t go from an archaic operation with no data tracking capabilities to a future-facing, AI-embedded operation in one jump.

“I often describe data as the clay,” Guillaume Vergnolle, a senior data scientist at AlayaCare, told me on stage at Aging Media Network’s Continuum conference. “It’s your best material to come up with an [AI] solution. You need the right kind to come up with the solutions. So, when it comes to the retention problem, make sure that you’re actually collecting the right data to mirror what you’re trying to solve.”

AlayaCare is one of the home-based care vendors aiming to help providers out with AI. Its commitment to AI solutions – along with WellSky’s, for instance – is a heavy indication that providers will soon be further along with practical implementation.

Where AI will be useful

Compassus COO Laura Templeton told me that she sees AI becoming useful in two areas in the near-term future: documentation and scheduling.

“We currently have a couple of work streams right now — one being for clinicians — around how AI can make their job and role easier or better,” Templeton said. “We’ve been looking closely at how to consolidate and optimize processes by utilizing AI tools.”

Compassus leaders were the first to divulge AI use cases to me in December at the Continuum conference.

“We’ve piloted several scheduling programs where we’re using our clinicians at the top of their license, and where we are sending the right clinician, at the right time, to the right place,” Templeton continued. “Scheduling is one area that comes to mind where I’m excited to see what AI can do.”

Indeed, scheduling is one area where providers could use advanced help.

After all, staffing is a top concern for nearly all home-based care providers. Within that, most leaders will say the key issue they’re trying to solve is retention. Within that, scheduling is the No. 1 reason that home health workers turnover.

“We’re having humans doing things that humans don’t have to do, scheduling being one of those,” VitalCaring President Luke James told me. “Medical records. Systems work. Where can we apply some generative AI and some kind of workflow technology that can take most of it out of the hands of humans? Reacting to the exceptions only, for instance.”

Axle Health, a home health scheduling platform, announced a $4.2 million funding round Thursday.

James also mentioned documentation, which Jordan Holland – the VP of value-based contracting at Compassus – also dove into in December.

“Clinical documentation has always been a big one — which has a lot of different layered potential use cases,” he said at Continuum. “There’s the idea of talk-to-text, but then there’s also talk-to-text to other discrete fields. Talk-to-text is great, but is that actually going to help you facilitate filling out an OASIS form? There’s an added layer to that because that talk-to-text then gets submitted to another party.”

James added that VitalCaring “has to get more efficient in the back office with rates continuing to fall.”

That is the core driver of a lot of home health providers’ AI strategies: finding ways to become more efficient to avoid fallout from any rate cuts from the Centers for Medicare & Medicaid Services (CMS).

Alivia Care CEO Susan Ponder-Stansel is taking the same approach, but through a different lens.

A provider that has gone deep into value-based care over the last few years, Alivia Care wants to find ways to up reimbursement through better outcomes.

“We want to really be able to stratify risk and create a patient profile,” Ponder-Stansel told me. “There are certain algorithms that you can develop to say, ‘Okay, when these particular things happen, you need an extra visit, you probably need to do a med rec.’ Because all those things downstream help prevent that rehospitalization, help prevent that adverse outcome. So that’s what we’re looking at.”

Elara Caring CEO Scott Powers, meanwhile, told me that stripping caregivers and home health aides of non-value work is the “No. 1 use case” that he sees coming to fruition.

The home care side

Personal home care providers are generally approaching AI a bit differently, which is interesting to note.

For instance, Home Helpers sees it helping most on the marketing side, particularly for franchises.

“We use AI in our franchise-development process around identifying potential new franchisees, and doing some specific psychographic targeting,” Home Helpers President and CEO Emma Dickison said during a HHCN webinar last year. “Internally, for the team, where we see the biggest lift with AI … is in the marketing department. But there are just so many applications.”

Similarly, BrightStar Care isn’t writing big AI checks yet, but is, for now, using AI-enabled chats on its website to help out with back-office functions and to get feedback from clients.

But there also are rate concerns for these home care providers, some of which are similar to home health providers’ concerns.

For those that are diving further into Medicare Advantage (MA), for instance, there’s a need for more efficient processes to make MA beneficiaries worthwhile clients from a business sense.

“I think you just have to prioritize where you can make the biggest difference on the margins,” Kristen Duell, the EVP of experience and innovation at FirstLight Home Care, told me. “We need to create automation in certain areas, leveraging technology and leveraging machine learning so that we can reduce overhead costs – and sometimes field costs – so that we can take on those health plan [clients]. We need it to make economic sense.”

The post No Empty Promises: How Home-Based Care Providers Actually Plan To Use AI appeared first on Home Health Care News.

These updates to the payment policies come at a time when MA enrollment continues to skyrocket.

Under the proposal, MA plans would see a 3.70% — or over $16 billion — increase, on average, in MA payments from the government from 2024 to 2025.

“This expected increase includes consideration of the various elements that impact MA payment, such as growth rates of underlying costs, 2024 Star Ratings for 2025 quality bonus payments, continued phase-in of risk adjustment model updates that were implemented in CY 2024, and increases to risk scores because of MA risk score trend, which can be driven by a number of factors including MA demographics and coding patterns,” CMS wrote in a fact sheet.

Last year, USC Schaeffer Center researchers found that overpayments to MA plans exceed 20%, or $75 billion annually. One takeaway from this finding was that reform efforts were necessary.

“The current Medicare Advantage payment structure results in overpayments markedly higher than previously understood,” Paul Ginsburg, senior fellow at the USC Schaeffer Center and professor of the practice at the USC Price School of Public Policy, said in a press release statement. “Our analysis highlights how Medicare Advantage currently operates and the need to reform how the plans are paid.”

Nearly 31 million people are enrolled in private MA plans. This is more than half of the eligible Medicare population, according to data from KFF.

KFF identified a number of reasons why MA enrollment keeps growing. One of the factors contributing to this growth is the extra benefits offered through MA plans, such as dental coverage, debit cards for medical supplies, lowered cost-sharing and more.

Some other reasons MA enrollment is seeing continued growth are that plans are required to provide an annual out-of-pocket limit, and insurers are bullish when it comes to MA marketing and promotion.

Additionally, some employers are moving their Medicare-age retirees into MA plans. Beneficiaries don’t usually have to pay a separate premium for additional coverage, and beneficiaries might not be well-informed about some of the tradeoffs that come with picking MA in lieu of traditional Medicare, according to KFF.

As MA enrollment continues to increase, it is poised to replace traditional Medicare as the main source of Medicare, KFF noted in its report.

MA plan’s less rosy financial standing is also top of mind for home health providers. Elara Caring, for example, has seen a lot of recent success in the MA space, according to CEO Scott Powers.

Powers believes that payers are starting to see the benefit of entering arrangements with providers, and having more open conversations with them. 

“I do see most all of them are coming back to the table with more reasonable expectations, because they see the other thing that’s changed, which is the bar to get star ratings for Medicare Advantage,” he previously told Home Health Care News. “Those have raised substantially, so a lot of plans have lost some of their star ratings, which is a financial problem for them.”

The post As MA Penetration Increases, Plans’ Financial Belts Are Tightening appeared first on Home Health Care News.

Home-based care providers have faced many headwinds over the past few years. They’ll continue to do so in 2024.

But uncertainty has also plagued providers, and there may be less of that this year.

Providers know the threat of fee-for-service Medicare cuts. They know Medicare Advantage (MA) penetration is an unstoppable force. They know staffing woes will be a mainstay, even if the labor market nominally improves.

Last week, at Home Care 100 in Scottsdale, Arizona, I had the chance to catch up with over a dozen home-based care executives. I listened to panels. I had on- and off-the-record conversations.

What follows won’t be a complete emptying of my notebook from the conference, but it will be a good summation of most of the reporting I’ll publish on Home Health Care News over the next month or so.

These thoughts pertain to value-based care, M&A, a big-name turnaround and more. They’re the topic of this week’s exclusive, members-only HHCN+ Update.

Ordinary issues

Home health providers have faced extraordinary issues for so long that they’ve rendered those challenges ordinary.

My “What are your biggest challenges?” questions were frequently met with, “Well, you know” responses.

“A lot of headwinds,” Visiting Nurse Health System CEO Dorothy Davis told me at the event. “It would be nice to talk about the wins rather than the headwinds, but that’s become pretty common.”

Based in Georgia, Visiting Nurse Health System provides home health and hospice to more than 7,000 patients across the greater Atlanta area.

Because those headwinds have been so constant and prolonged, providers are beginning to make strides against them. Like the process of grieving, they’re not getting over the issues necessarily, but they are learning to survive despite them.

“We’re really focused on standing up value-based care,” Alivia Care CEO Susan Ponder-Stansel told me. “We really believe that that’s going to be the way that you succeed financially, and also succeed in being able to deliver better outcomes to seriously ill patients.”

Jacksonville, Florida-based Alivia Care provides home health, hospice and palliative care services across North Florida and Southeast Georgia. The company also operates its own Program of All-Inclusive Care for the Elderly (PACE), which is one of the more proven value-based care models in senior care.

In 2022, Ponder-Stansel told HHCN that her organization was embracing the “learning curve” of getting into value-based care. This was right around the time the Centers for Medicare & Medicaid Services (CMS) first proposed a significant rate cut for home health providers.

But, eventually, that learning curve bears fruit. And it has done so for Alivia Care in PACE, but also in all of its service lines.

While certain providers have offloaded certain service lines to hone in on core competencies, Ponder-Stansel believes that all of those different types of care are necessary to truly go at risk, including primary care – through partnerships or otherwise.

“I think that when you’re in any kind of value-based situation, you need all the components: private duty, Medicare-certified home health, hospice, adult day care, etc. We have all of these parts of care,” she said.

Outside of the services lines, both Ponder-Stansel and Andrew Molosky, the CEO of Chapters Health System, believe that a top-down understanding of value-based care is non-negotiable.

In other words, it’s not just about “moving to value-based care”; it’s about ingraining a culture and understanding around value-based care – and determining what exactly that means for each organization.

“I think the first relationship that you must establish – and this sounds a little hokey – is a pretty good internal harmony with your employee base, your stakeholders, your board, your governance, structure, whatever that might be,” Molosky told me. “Because nothing will waylay an organization faster than when you have people viewing the priorities differently.”

The Tampa, Florida-based Chapters Health System is a community-based nonprofit organization. It provides types of home-based care services to nearly 120,000 patients.

Buyers and sellers

As providers come to grips with their operating realities, their leaders seem to believe that the M&A market will open up, too.

While some offered caveats, nearly every leader I talked to believed that transactions would increase in 2024. To be fair, 2023 had quarters with historically low activity. But, at some point in the near-term future, consolidation is likely to become even more of a feature of the home health landscape.

“I do think you’re going to see some more activity with the bigger companies this year than we saw last year,” Elara Caring CEO Scott Powers told me. “I think interest rates are going to help with that. And I think private equity is going to get a little more involved in some of these deals.”

One of the largest home health providers in the country, Elara Caring provides care to more than 60,000 patients across about 200 locations. It offers home health care, hospice, personal care, palliative care and behavioral health care.

Outside of interest rates, one of the micro trends that has been holding home health M&A back over the last two years is the disconnect between peak multiples in 2020 and 2021, and what buyers are willing to offer now.

“The big question mark right now is what multiples are going to look like,” VitalCaring President Luke James told me. “I think we’re going to see a couple of deals that reset the market, especially for sizable transactions.”

VitalCaring, also based in Dallas, will likely be a part of that resetting. The company, led by April Anthony, is growing steadily. It has dozens of home health and hospice locations in six Southeastern states.

James believes that hospice valuations will remain at bay, but that home health multiples will continue to come down until buyers gain a greater appetite for seller targets.

At the same time, those 2020 and 2021 multiples are already baked in. Financial backers looking to offload an asset in 2024 or 2025 could have a hard time making a desired return on investment.

“Even if those businesses doubled in size, if they’re only able to sell for 11 or 12 times, you’ve got to make up a lot of ground versus where they enter those businesses,” James said. “It’ll create pressure. Where are those sellers? How low are the sellers willing to go to get a deal? Or how high are those buyers willing to go to satisfy their return metrics?”

An Aveanna turnaround

Aveanna Healthcare Holdings (Nasdaq: AVAH) went public right before the markets came tumbling down, in April of 2021.

It has undergone extreme staffing headwinds and also leadership changes. And yet, almost three years later, it’s still standing.

That led to a seemingly chipper Jeff Shaner – the CEO of Aveanna – in Scottsdale last week.

Based in Atlanta, Aveanna provides Medicare-certified home health care, personal care and pediatric care across 33 states. Through acquisition, the company went from being a primarily pediatric care provider to a senior care provider in just a matter of years.

Though it is not near its initial stock price of close to $12 per share – it sits at about $2.50 per share right now – it has climbed significantly over the last year. In January 2023, the company’s stock price was sitting around $1. That led to speculation that it would not even make it on the public market for another year.

Shaner is now around to tell the turnaround story.

“We took a very detailed, strong, honest look at ourselves about 15 months ago,” Shaner said. “We didn’t necessarily like everything we saw. I had to make some very honest assessments of where we were as a company, and where we wanted to be. But, 15 months later, we can exhale now as an organization. Because we know where we’re going.”

That’s significant. Aveanna boasts one of the strongest home-based care footprints in the country. Historically acquisitive, it has been quiet during recent years. Perhaps that could change in 2024.

The obstacles remain. But providers, such as Aveanna, could be starting to find their way.

The post Facing The Future: Home Health Providers Gear Up For 2024’s Value-Based Care, M&A Landscapes appeared first on Home Health Care News.

The priorities are a good reflection of what home health leaders believe will lead to solutions. Their priorities are generally not what you would consider solutions in themselves, however.

For Elara Caring, its focus is on caregiver and patient experience.

Of course, every provider wants to deliver on a quality patient and caregiver experience. But prioritizing that, CEO Scott Powers believes, will allow Elara Caring to improve in a wide range of areas. For instance, recruiting and retention, as well as value-based care initiatives.

Based In Dallas, Elara Caring provides care to more than 60,000 patients across about 200 locations. It offers home health care, hospice, personal care, palliative care and behavioral health care.

Home Health Care News sat down with Powers to discuss the company’s top focuses in 2024, and also what they’re keying in on when it comes to Medicare Advantage plan negotiations, specific service line growth and next-generation technology.

Below is the conversation, edited for length and clarity.

HHCN: What are your biggest priorities for 2024, the areas you’re most focused on?

Powers: I would say it’s really around caregiver and patient experience.

Caregivers are the fuel for our growth. If we grow the business like we did last year, it’s all because we’re able to retain and recruit more caregivers.

The market is getting a little better. I think our understanding of what people want, and what motivates them, is getting better.

And then, from a patient experience perspective, it’s really about how we continue to drive value into those conversations with all our different service lines, like measuring Net Promoter Score, that kind of thing. It’s really trying to dissect what’s important to patients.

Finally, I’d say, is just growing the business in our current locations, so taking more market share, getting denser, getting bigger, in the places we do business today by really working through that referral experience.

So, you’re hearing a lot about experience, and a lot of those types of things are really flipping the organization upside down a little bit by looking at what drives caregivers, patients and referral sources. And, in being good at that, it drives more growth for us. In a nutshell, that’s what our priorities are.

Is there any service line in particular that you’re focused on growing or refining over the year?

Yeah, our personal care business, just because we’ve made so many changes in the caregiver experience, and we’re really expecting to grow there. That’s probably number one.

Number two is in our skilled business. The demand just continues to exceed supply. So we’re finding that we’re able to take a lot of share from our competitors because our caregiver counts are growing. So those are the two that we’re most focused on.

We’re talking a lot about organic growth in current locations. But, from an M&A perspective, do you think things will open up a bit more this year?

Yeah, we’ve done three acquisitions already, and we’ll do more here in 2024. They’ve been small, tuck-in acquisitions.

I’d say these mid-tier platform companies, I think we’re going to see a few more of those come into play. I do think you’re going to see some more activity with the bigger companies this year than we saw last year. I think interest rates are going to help with that.

And I think private equity is going to get a little more involved in some of these deals. The big, mega deals I don’t know about, I don’t have a lot of visibility into how many of those are going to happen, but I think some of these mid-tier deals are going to come to market.

Medicare Advantage obviously remains a major topic within home health care. Any updates on how you’re approaching MA plans?

Yeah, I’d say we’ve had a lot of success in the last year and that will continue.

I think it’s being driven by the lack of access to home care. That’s a big part of it, combined with longer hospital length of stays. I think payers are a little more open to driving conversations with us, and going into a value-based world, because that’s important to them.

I do see most all of them are coming back to the table with more reasonable expectations, because they see the other thing that’s changed, which is the bar to get star ratings for Medicare Advantage. Those have raised substantially, so a lot of plans have lost some of their star ratings, which is a financial problem for them.

There’s a lot of financial pressure on these plans that they haven’t seen in a while. So I think they’re getting really focused on where the value is. How do they save more money to offset headwinds? And, as a result, we’re seeing them recognize the value proposition a little bit more and come to the table a little bit more. That’s going to help the industry over the next 24 months.

So, maybe not simply adjusting upward a fee-for-service rate, but more willing to go into a value- or risk-based arrangement?

It’s both. We’re seeing overall rates creep up, but we’re also seeing more willingness to do value-based deals.

Finally, are there any AI use cases that you’re bullish on in 2024?

I’d say the use cases are really going to be around caregiver productivity, with documentation being probably the lead.

In that, I see the recruiting angle of how you get people in, really dissecting that and meeting the caregiver where they are, and taking the friction out of joining a new company.

I just think this whole idea of bringing flexibility to the caregiver and stripping out what they perceive as the non-value added work is the number one use case that I see coming to fruition.

So, you think about voice-enabled coding and documentation, scheduling solutions, automating referrals and understanding more about the patient you’re about to go see before you actually go see them. Those are the most promising use cases, in my mind.

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It’s an aspect of the job that many of them enjoy, but home health providers have always tried to make them feel like they were connected to the broader culture of the organization.

That’s generally what brick-and-mortar offices were used for. Despite the front-line workers operating remotely, training and other company-wide activities took place at those locations, where the back-office employees had an in-person work environment of their own. 

In 2024, however, there are examples of home health providers doing away with brick-and-mortar locations to keep overhead costs down. Keeping those costs down, the thought process goes, allows providers to: better adapt to Medicare Advantage (MA) penetration; mitigate the effects of fee-for-service rate cuts; and offer better pay and benefits.

New Day Healthcare – one of the fastest-growing providers in the country – has employed this strategy in Texas, its largest market.

To be clear, the actual home health delivery is not remote in the New Day’s Texas model, but the back-office functions are. In fact, all New Day executives work remotely.

“It gives us a very efficient model on the recruiting piece,” New Day CEO G. Scott Herman told Home Health Care News. “Nurses expect more remote flexibility, it’s kind of become a mainstay. We actually have nurses that come to us because they don’t have to be anchored to a physical facility. They can manage those things remotely, have Zoom meetings, connect with their supervisors at need and manage everything on the internet. It’s working well for us.”

Part of the reason that the remote strategy was employed in the first place is because New Day launched during the pandemic. What started out of necessity continued for strategic purposes.

New Day now has close to 30 locations across Texas, Missouri, Kansas and Illinois. It has completed nine acquisitions since 2020 and serves over 100,000 patients annually.

The remote concept is part of New Day’s “burn the ships” mantra, which is based on the belief that home-based care delivery needs to be reinvented.

“We’re having good luck hiring our teams,” Herman said. “By keeping very low overhead at New Day, we are able to then push benefits into the field. All of our part-time employees are benefits-eligible. And that’s because we don’t have a corporate office.”

The brick-and-mortar case

On the other end, in October, Elara Caring – one of the largest home health providers in the country – moved one of its regional headquarter offices to a more advantageous place for business.

Located in Jackson, Michigan, the office will help Elara Caring further embed itself into the Jackson community and the surrounding areas, according to COO Ananth Mohan.

“We’ve actually had a presence in Jackson for a long time,” Mohan told HHCN. “We see over 3,000 patients daily in Michigan, and we’ve got all of our service lines – home health, hospice, behavioral health, palliative care, personal care services – there. Jackson has been a hub. We saw revitalization happening in that downtown area, and a transformation. And we wanted to do our part. So we moved our office, which was a little farther away from downtown, into that downtown area, just to have more of a presence.”

Based in Dallas, Elara Caring has a footprint in 17 states in the Northeast, Midwest and Southwest. It serves more than 60,000 patients and their families across 200 locations.

The company obviously is a bit different than New Day. It’s been around longer – way before the pandemic – and has more scale.

For now, Mohan and Elara Caring’s other leaders still see the value in having brick-and-mortar locations across the country for their back-office and frontline staff.

“In general, being present for our communities, being local, is important,” Mohan said. “It helps us build better relationships with not just patients, but referral partners, health systems and the community.”

The leadership team at Elara Caring values staff having a direct line to leadership, whether in person in a nearby hub or otherwise.

“We’re pretty committed to local presence, that’s important,” Mohan said. “Health care is local. That’s not going away.”

Maintaining culture, flexibility

Neither strategy is definitively right or wrong, particularly because Elara Caring and New Day – as they’re currently structured – are very different companies.

Plus, New Day is still focused on maintaining a solid culture and in-person meet-up opportunities. Elara Caring, on the other hand, is also committed to allowing more flexibility for their employees.

“We do have pop-up events, which are live events where we invite the staff to come in and grab a cup of coffee, for instance,” Herman said. “We had one at a local donut shop in East Texas where people swung by to meet with our folks, making sure we have that kind of unity that you need. We do those on a regular basis, at least once monthly, in all of our regions. And that keeps them connected.”

Similarly, while maintaining those brick-and-mortars, Elara Caring provides pathways to further flexibility for its staff.

“People value flexibility, right?” Mohan said. “Any step you can make digitally helps the employee experience, and helps give them flexibility in their day to day. Because, at the end of the day, you want to maximize patient time. And you want to maximize clinical time. So that flexibility is always appreciated on our end.”

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