“It’s a distinctive part of the culture of UnitedHealth Group that we continue to strive to deliver on our financial commitments to you through changing environments and unforeseen challenges,” UnitedHealth Group CEO Andrew Witty said during the company’s third-quarter earnings call on Tuesday. “As we look to 2025 … we remain in a dynamic period for the health care sector. Amid this, it’s important that we continue to invest in the durable value creating capabilities of this company that support our 13% to 16% long-term growth objectives.”

Despite this current operating environment, Witty expressed optimism about the company’s ability to grow in the years to come.

The company already owns the home health giant LHC Group, and is in the process of acquiring Amedisys Inc. (Nasdaq: AMED), another one of the largest home health providers in the country.

One of the elements laying the groundwork for growth is UnitedHealth Group’s commitment to the transition of the health system to value-based care, Witty noted.

“At UnitedHealth Group, we’re purposefully organized to support the transition to value-based care,” he said. “It requires deep engagement with patients, setting the foundation to move to more coordinated care, connecting patients to primary care earlier, driving clinically accurate diagnoses more effectively, recognizing and managing chronic conditions and slowing disease progression. We’re seeing the benefits of this work come to fruition.”

Specifically, individuals who receive care services under Optum’s value-based models are more likely to receive cancer screenings. Optum is UnitedHealth Group’s health care services arm.

These individuals are also better positioned to control their diabetes and hypertension, compared to those under fee-for-service Medicare. Plus, they are 10% less likely to visit the emergency room, or be readmitted to hospital.

UnitedHealth Group’s value-based care models incorporate home-based care services, such as house calls, home health care and other in-home visits.

For the third quarter of 2024, UnitedHealth Group brought in revenues of $100.8 billion, a $8.5 billion increase over the prior year period.

Optum’s Q3 revenue was $63.9 billion, a $7.2 billion increase over the prior year.

“This was driven by an increase in both the number and type of care services we offer and the patients we serve, especially in the home and among those with complex needs,” John Rex, president and CFO of UnitedHealth Group, said during the call.

UnitedHealthcare’s Q3 revenue was $74.9 billion, a $5 billion increase over the previous year.

“Indications are tracking favorably as we head into 2025, reflecting continued strong uptake of UnitedHealthcare’s innovative offerings,” Rex said. “Our Medicare Advantage plans, on offer this fall, balance providing as much benefit stability as possible for seniors, while contending with the CMS funding cuts, IRA changes and expected care patterns.”

The post Facing Headwinds, UnitedHealth Group Remains Focused On Value-Based Care appeared first on Home Health Care News.

Enhabit Inc. (NYSE: EHAB) has been active in the value-based care space. The company has a small – but growing – number of value-based contracts on the Medicare Advantage (MA) side, as well as Accountable Care Organization (ACO) partnerships.

“Typically these look like upside potential based on quality metrics that both parties agree to, and we try to pick those quality metrics that are going to lower the total cost of care of patients,” Debra Konjanovski, senior vice president of payor innovation at Enhabit, said last month during a panel discussion at Home Health Care News’ FUTURE conference. “If we perform, then we have an opportunity to have some shared savings in that.”

Dallas-based Enhabit has 256 home health locations and 112 hospice locations across 34 states.

For the past few years, payer innovation has been a major component of Enhabit’s overall strategy.

At Bayada Home Health Care, value-based care is another tool that allows the organization to deliver quality care, according to Sue Chapman Moss, managing director of payer and provider contracting and strategy at the company.

“There’s a tendency towards price suppression in our category, and so value-based care is a way to differentiate, and to be able to share the performance that we’re already creating for our patients in their homes,” Moss said during the discussion.

Bayada provides home health, home care and hospice services in 23 states, as well as in Canada, Germany, India, Ireland, New Zealand, South Korea and the U.K.

Currently, Bayada has value-based arrangement partnerships with payers, ACOs and health systems.

“We’re working with partners … that are willing to make an investment in our caregivers,” Moss said. “The contracting structure is probably the least interesting factoid of our value-based care. It’s how we’re spending the dollars, and investing in our workforce, that we’re most pleased with.”

Moss believes that not diving into value-based care would be a missed opportunity for Bayada.

“If you believe in your care model, what you’re doing in the home is creating value,” she said. “If you’re not working with your payers to secure a portion of that value, and you’re just taking fee-for-service rates, all of that value is dropping 100% to the bottom line of the payer, or the risk bearing provider. We view it as part and parcel to securing better value and being able to hire caregivers and invest in great training.”

Key metrics and navigating challenges

Though it varies depending on the payer, there are some key metrics that home-based care providers should be ready to present when trying to establish value-based care arrangements.

“If you’ve met one payer, you’ve met one payer,” Integrated Home Care Services CEO Chris Bradbury said during the discussion. “Even within the payer, depending upon the line of business, whether it’s [MA], managed Medicaid or the commercial line, the ranking of the priorities differ. [However], there are some things that cut across all of them. Timely access to quality of care is super important, no matter who you’re talking to within the payer, whether it’s the network folks, the clinical folks, the finance folks or the line of business leaders for [MA], manage Medicaid or commercial.”

Integrated Home Care Services is a driver of value-based care in the home. The company partners with health plans, providers and other risk-bearing provider organizations.

Bradbury noted that providers should also be prepared to present patient experience metrics.

“With the changes in star ratings, I know our health plan clients that participate in [MA] are far more attuned to the patient experience, and how what you do can either positively or negatively impact their brand,” he said. “It can have a material impact on their financials and their growth.”

Konjanovski pointed out that providers sometimes face the challenge of finding the right person to talk to within the organization that it is trying to establish a value-based arrangement with.

“At times, it’s hard to find the right person in the organization that you need to talk to that can actually make the decision, and then once the decision is done and it’s on paper, actually executing it is a very long process,” she said.

It’s important for providers to recognize when an organization isn’t ready to fully commit to entering a value-based arrangement, according to Moss.

“Not all payers are ready,” she said. “If they’re struggling to pay claims and focused on audits and utilization management, that does not signal an organization that’s ready for your team to invest a lot of time and energy into a value-based arrangement.”

Ultimately, it’s best for providers to enter arrangements with organizations that want to establish a long-term partnership.

“[Find] payers who are willing to make a multi-year commitment,” Moss said. “These are not easy, one-year deals, and so you need to find partners that are willing to put in the time and the energy. Value-based arrangements take some time to get right and to learn together. If you have an adversarial negotiation, sometimes that doesn’t necessarily lend itself to a collaborative relationship at the end, so you always need to keep that in mind as you’re going through the process.”

The post How Enhabit, Bayada Win Home Health Value-Based Care Arrangements appeared first on Home Health Care News.

Earlier this year, I had the chance to interview CenterWell President Sanjay Shetty on stage and off stage at the Digital Healthcare Innovation Summit in La Jolla, California.

Last month, at Home Health Care News’ FUTURE conference in Nashville, I did the same with Kirk Allen, the president of home solutions at Humana Inc. (NYSE: HUM).

Humana is one of the largest health care companies in the country. As a payer, it is one of the largest, particularly in Medicare Advantage (MA). As a provider, Humana’s CenterWell is also a powerhouse, with home health, pharmacy and primary care segments.

While MA plans and home health organizations are often at odds, Humana and UnitedHealth Group (NYSE: UNH) are in a unique position. They are the two largest MA administrators, and also own two of the largest home health providers in the country, in CenterWell Home Health and LHC Group, respectively.

When chatting with Shetty in February, he felt as though CenterWell could leverage that position on behalf of the entire home health industry.

“I think, hopefully, that proof point will help,” he told me. “We’re still probably in the early days, … but it’s been exciting because, again, we have a laboratory of actual patients, and actual opportunity to engage in the process. The fundamental thing is, how do we open up the opportunity for the home health agencies to pivot into a model that relies on value and results?”

Allen and I picked up that conversation where Shetty and I left off.

Humana’s goals within the home, and how they could affect the home health industry at large, are the topic of this week’s exclusive, members-only HHCN+ Update.

Proving the value

Some home health providers are queasy over large payers acquiring other top providers. But the best-case scenario for them would be for CenterWell Home Health, LHC Group and Amedisys Inc. (Nasdaq: AMED) to shine within Humana and UnitedHealth Group.

If they do, it could open the door for other home health providers to negotiate on higher ground with MA plans.

After all, those payers will always need more home health services than their own providers can supply.

Allen has been with Humana for seven years. He officially became the president of home solutions at the company in January.

As Shetty said, CenterWell Home Health is still early on in its quest to prove out home health care’s worth in a value-based context.

“My inclination is … I feel very, very confident that well performed home care – with an eye toward outcomes – will drive outsized results when it comes to quality, but also access and outcomes,” Shetty said. “I feel very confident because these are highly skilled staff in the home, who are really looking at the whole person and engaging with them in a different way than you ever could in the clinic.”

Allen explained that Humana has a near-term goal of treating 80,000 home health patients under a value-based model.

That model, while proprietary, could be a blueprint for future agreements between health plans and home health providers.

“Humana is in a unique position because of the investments that it has made, to measure and prove out the impact,” Allen told me. “And to do it in a way that represents home health, MA and physician practices. I do think that can have an impact on the industry, and that’s why we are so excited about this value-based model and the fact that we have committed to cover these 80,000 members.”

The 80,000 number, Allen believes, is a sufficient size and sample to prove the model out. If all goes well, the goal is to treat far more patients under the value-based model in the future.

“I do think that this can have an impact on payments in the industry at large,” Allen said.

How the model works

The value-based model is still Medicare-certified home health care. So, for instance, OASIS is still collected, and all the guardrails that other providers follow based on Centers for Medicare and Medicaid Services (CMS) direction will be followed by CenterWell Home Health.

But the freedom – and promise, ideally – comes elsewhere. Under the model, a Low-Utilization Payment Adjustment (LUPA) is not a concern, for instance.

“In our value-based construct between CenterWell Home Health, onehome and our primary care organization (PCO), there’s [an ability] to really focus on the patient and their needs at the center,” Allen said. “The PCO owns those patients, from a physician standpoint. We are the home health provider for those patients, so there’s not lots of different people involved. The first thing that occurs as a result of that is they know directly who to come to for home care, and we know directly who to go to for orders, right?”

On the PCO’s end, there’s physician “champions” that coordinate directly with home health care on the clinical side. That way, if the patient needs something, it’s delivered right away.

“The main thing is that both entities are completely responsible,” Allen said. “And it becomes about what the patient needs. And that’s what you deliver. You don’t have a sales function that you are running around. It’s more coordination of care and delivery of care than selling for care.”

The value-based model got up and running last November, and early indications are that hospitalizations are being reduced, according to Allen. More data will be available by year end, in all likelihood.

Humana has been focused on home-based care for more than a decade. Its test of value-based home health care may be one of its biggest initiatives yet, so much so that the company has publicly touted it on earnings calls in the past.

If everything goes accordingly, the new model will represent a major tailwind for Humana, CenterWell and specifically CenterWell Home Health.

CenterWell Home Health could then – as a payer-agnostic organization – turn around to other MA plans and show the true value of their services as well.

“We stay focused on providing value,” Allen said. “The thing that we’re most excited about is the proving out of our value-based model and the care that we deliver underneath.”

The post How CenterWell Can Prove Home Health Care’s Worth Within Humana appeared first on Home Health Care News.

Home health providers often pursue value-based care arrangements, with the goal of delivering quality care and achieving monetary success. But if they are not careful, these companies can also land in financial hot water.

“In a value-based arrangement, a financial disaster means I’m now losing money,” Joseph Furtado, administrator of MD Home Health, told Home Health Care News.

MD Home Health is a privately-owned Phoenix-based provider that offers traditional skilled services in the home, as well as specialty programs and non-medical personal care services through its MD Home Assist arm. The company is one of largest home health providers in Arizona.

Even for the providers highly focused on value-based arrangements, those arrangements tend to make up a smaller part of their revenue. But that may change in the near-term future.

In 2022, almost 42% of home-based care providers predicted that value-based contracts would make up more than half, or most, of their organization’s revenue in the next three to five years, according to a survey conducted by Home Health Care News and AlayaCare.

Additionally, 23% of providers projected that value-based contracts will make up about half of their revenue in the future.

Plus, Medicare-certified home health providers already operate under the Home Health Value-Based Purchasing (HHVBP) Model, which ties financial incentive to performance.

When entering a value-based arrangement, the problems can begin as early as the negotiation phase, if the home health provider enters the conversation without the correct data, according to Furtado.

“It’s typically a one-sided negotiation, because they have the data on what’s going on with your patients, they have the data on what’s going on with their patients, they have the data on what’s going on with everyone’s patients, and all you have is what’s going on with your patients, and it’s typically not very good data,” he said.

Furtado urges home health providers to not just trust their own data blindly. Instead, he advises providers to get their data validated.

“You have to get your data validated, and it can’t be validated by the local accountant, or the local bookkeeper,” Furtado said. “It has to be validated by experts in our field. You have to have consultants who are experts to help you because the financial disaster is not just the money you’re going to lose on those visits, it is the opportunity cost that you’re losing by not being able to take other arrangements that are going to be profitable for the agency.”

Chris Bradbury, CEO of Integrated Home Care Services, believes that one of the common reasons that value-based care arrangements end up in financial disaster for providers is structural issues around scale.

“If they’re asked to go from one territory to a whole state, to 10%, 20%, 30%, 40% of their business, and if scalability isn’t part of the initial design and agreement, there’s a real risk that problems could happen later on,” Bradbury told HHCN. “An agreement may be successful, and then a health plan may decide to throw gasoline on the fire. If the home health provider hasn’t thought through how to scale it, they could agree to scale rapidly, and not be in a position to consistently deliver the results that are in the pilot or the proof of concept.”

Integrated Home Care Services is a driver of value-based care in the home. The company partners with health plans, providers and other risk-bearing provider organizations.

Bradbury noted that agreeing to a value-based arrangement without figuring out how to scale could lead to significant financial risk, and also damage the relationship.

Another factor that can put providers in a bad position financially is underestimating their true cost of care.

“It’s like saying, ‘Oh, my monthly bills are $3,000 a month because that’s my mortgage,’” Furtado said. “Well, it costs a lot more to run your house, right?”

Furtado explained that there are many factors that add up to the cost of providing care.

“When you start adding everything together — what you’re paying your people for mileage, what you pay for bonuses, what you pay for recruitment, training, missed visits — there are so many variables,” he said. “When you add it all together, your true cost of providing every visit is so dramatically higher. When you go and sit in these negotiations, you have a number in your head. ‘As long as I’m making $110 a visit,’ for example. Then they come in, and they tell you what they’re willing to give you. It’s going to be less than that.”

One way to make value-based arrangements work is to keep things simple, according to Bradbury.

“It’s very easy to make the metrics, the definitions and the flow of incentives too complex,” he said. “The greater the complexity, the greater the chance for misunderstanding, which then can lead to back-end problems and back-end risks.”

Bradbury advises providers dipping their toe in value-based arrangements for the first time to start small.

“Start in a particular area, prove the concept out, and then expand from there,” he said. “You have to be very careful about implementing something across your entire book of business, right out of the gate.”

It’s also important for providers to thoroughly vet the organization that they want to partner with.

“There needs to be a culture on both sides of test and learn,” Bradbury said. “Of curiosity, of discovery and a willingness and openness to adjust the relationship as it goes, based upon the performance and the insights and the value that’s delivered from these things, because it’s very important that all parties succeed.”

The post How Home Health Providers Can Avoid ‘Financial Disaster’ In Value-Based Arrangements appeared first on Home Health Care News.

Ultimately, the goal is to reduce unnecessary emergency room visits or hospitalizations. The urgent care service line will be added to Lifespark COMPLETE, Lifespark’s value-based population health business.

The Minnesota-based company provides home health, home care, hospice, primary care and senior living, among other services. Those services are offered to a wide range of patients. Within Lifespark COMPLETE, however, all of those services are available to members.

In COMPLETE, Lifespark has taken global risk. It is responsible for patient outcomes, full stop. And, while many home-based care companies want to take on more risk, it comes with a lot of responsibility.

That’s why in-home urgent care was added, according to Lifespark CEO Joel Theisen. It was one of the last situations where the company felt like it needed to fill a gap for its patients.

“We’re taking full, upside-downside risk,” Theisen said. “And we’re building brick, by brick, by brick. We felt this was important. With what we saw in our data, we needed it. We always wanted to do it.”

The mobile and urgent response team is made up of nurses and paramedics. They can deliver care in the home to prevent a hospitalization, but also can coordinate a visit to the hospital if that is what the patient needs. In the latter situation – where a patient does need to go to the hospital – Lifespark’s team is able to brief the inpatient facility on the specifics of a patient to ensure interoperability.

Lifespark will also be coordinating telehealth visits with doctors as part of the in-home urgent care offering.

“When someone goes into the hospital [unnecessarily], the experience is horrible,” Theisen said. “The costs are horrible. It’s like a bomb going off. And that’s where delirium sets in. That’s where all this fear and angst sets in. As we were strategizing, we knew we had the proactive, the predictive and the prescriptive pieces down, but we needed the acute reactive. We needed the urgent response, because when we do miss, we have to stay connected – because we know the member better than anyone else.”

Lifespark will also ensure a safe and seamless transition back to the home after a hospital visit, if it’s needed.

Dexter Braff, the founder and president of the M&A firm The Braff Group, told HHCN last year that the best way for a home-based care company to go at risk would be to build a home-based care continuum from the start.

In essence, that is what Lifespark has been trying to do.

“Who’s going to say, ‘I’m going to build my organization specifically to go at risk with payers. I’m not worried about the silos that are artificially created by Medicare, Medicaid, or hospitals,’” Braff said. “You’d do home health, hospice infusion therapy, home medical care, physician housecalls, build that organization and have some capacity in a very, very tight footprint. Then go to the payers and say, ‘I’ll take care of all that, and I’m going to charge you X number of dollars per member, per month.’”

Right now, Lifespark COMPLETE is a Minnesota operation, though Lifespark does do work outside of the state. The COMPLETE census is generally around 3,000 or more.

In the future, Theisen wants the operation to grow – by number and by geography.

“Our plan is to take this nationally,” Theisen said. “But for now, we’re going to do everything we can to keep learning, through the data and through listening to our customer base on how to make it better. It’s going to be slow, it’s going to be iterative. But it is definitely not just a flash in the pan.”

As part of the in-home urgent care launch, Peter Carlson has also joined Lifespark as the VP of acute response services.

Carlson previously served as the chief of paramedicine for Medically Home, as well as the community paramedic coordinator (and operations manager) for Mayo Clinic.

“We have a big commitment here, and I hope the nation follows,” Theisen said. “I hope people really feel that they can actually take the risks, and actually get in the game in a more meaningful way to serve seniors.”

The post Lifespark Adds In-Home Urgent Care, Adding ‘Final Brick’ To Its Suite Of Services appeared first on Home Health Care News.

“We don’t have plans to continue to invest in brick and mortar-owned primary care practices,” Mary Langowski, the president of U.S. Healthcare, said during the company’s third-quarter earnings call on Thursday.

VillageMD is a large primary care provider with a home- and community-based focus.

In 2020, Walgreens backed the company with a more than $1 billion investment. Over the course of several investments, Walgreens has poured more than $6 billion into VillageMD.

In March, Walgreens disclosed that it was planning to shut down 160 VillageMD clinics. The company referred to this as the prioritization of “density in their highest opportunity markets.”

VillageMD also includes Summit Health-CityMD, which the company acquired in 2023.

“We believe in the future of these businesses and intend to remain an investor and partner,” Walgreens CEO Tim Wentworth said during the call. “But as part of our persistent focus on value creation for WBA, we are collaborating with leadership toward an endpoint to rapidly unlock liquidity, enhance optionality and position them for additional growth.”

During the call, Langowski was also quick to point out that the company hasn’t lost its enthusiasm for value-based care.

“We believe strongly … in value-based care as well as in VillageMD and we believe in these businesses and payers believe in these businesses and consumers, frankly, love getting their care in these types of businesses,” she said. “But what we’ve stated, and I’ll say it again, is we’ll be a partner to VillageMD in an ongoing way. We’ll continue to be an investor. What we’re really looking to do is invest in capital-light services to be a broader partner across the industry. With a range of providers and with a range of payers as well as a range of pharmaceutical manufacturers.”

Overall, Walgreens’ U.S. Healthcare segment had Q3 sales of $2.1 billion, an increase of 7.6% compared to Q3 2023. VillageMD brought in sales of $1.6 billion, a 7% year-over-year increase.

“The increase was driven by growth in full risk and fee-for-service lives, partly offset by the impact of clinic closures,” Manmohan Mahajan, global chief financial officer at Walgreens, said.

Wentworth also shared the company’s plans to close shop at several Walgreens locations across the U.S.

“We are finalizing a multifactor store footprint optimization program which we expect will include the closure of a significant portion of these underperforming stores over the next three years,” he said. “Plans to finalize this number are in motion and we will update you in due course. For the remaining portion of this cohort, we are taking action to return them to profitability and deliver an improved customer experience. We will contemplate additional closures if performance does not improve, which includes external factors, such as reimbursement rates.”

The post Walgreens To Reduce Physical Footprint, Continue Health Care Services Focus appeared first on Home Health Care News.

Recently, however, the health care giant has started to view value-based care as a sustainable business model that it can lean into to drive growth across its operations. And it’s home-based care that has helped UnitedHealth Group take its value-based care strategy to the next level.

“Although it’s a topic that has been talked about for probably 30 years as a theme, I would say, really, only within UnitedHealth Group and Optum are you seeing value-based care now on a scale and presence [that] allows it to operate truly as a business model,” UnitedHealth Group CEO Andrew Witty said Wednesday, speaking at an investor conference.

Specifically, home-based care – home health services, house calls and other ways of engaging with Medicare beneficiaries in the home – allows UnitedHealth Group and Optum to take a more preventative approach.

That, in turn, benefits the company as well as the health care system as a whole, according to Witty.

Optum has maintained a house calls program for years that’s available in all 50 states. As part of that program, it sends advanced practice clinicians into beneficiaries’ homes for comprehensive health assessment, with services also available virtually.

The house calls team conducts hundreds of thousands of in-home care visits annually, many of which take place in rural communities.

Increasingly, UnitedHealth Group and Optum have invested in home health services, too. The prime example of that is the $5.4 billion acquisition of LHC Group in 2023, with a separate multi-billion-dollar purchase of Amedisys Inc. (Nasdaq: AMED) pending.

Other wraparound services, including Optum’s behavioral health investments, add to the company’s ability to perform in a value-based care landscape by providing deeper clinical care, according to Witty.

“That’s a huge area for us, and you should continue to expect us to invest heavily in that going forward,” the CEO said, referring to the organization’s overall value-based care plan. “We believe that is, by far and away, the best way to deliver quality of care, affordable care [and] value. We still think it’s in the early innings as a business model.”

Heather Cianfrocco, the CEO of Optum, echoed those sentiments. Cianfrocco took over as CEO of Optum in April 2024, and she is now responsible for the strategic direction and overall performance of its three business segments: Optum Health, Optum Rx and Optum Insight.

Wraparound services, population health, behavioral health and home-based care are all keys to a sustainable value-based care strategy, Cianfrocco noted.

“It’s strong referrals to the right side of service, including surgery and specialty. It’s the wraparound services, like the population health and behavioral health services, that many of our patients need,” Cianfrocco said. “And it’s the home-based care that we’ve invested in, whether it’s home health services through many of the investments we’ve made, [or] it’s transitional and longitudinal care, or it’s just the really important preventive services and annual home checks that we’ve done for years that make sure our seniors have what they need at home … .”

The post UnitedHealth Group Continues to Leverage Home-Based Care to Drive Value-Based Strategy appeared first on Home Health Care News.

Helping these kinds of home-based care companies see success in these arrangements has become Integrated Home Care Services’ sweet spot as a driver of value-based care.

Paul Pino, co-founder and chief growth and analytics officer at Integrated Home Care Services, recently joined Home Health Care News’ Disrupt podcast to talk about the roadblocks smaller providers face when trying to enter value-based care arrangements, and how his company helps navigate these challenges.

During the conversation, Pino also explained why working with each individual managed care plan is a unique experience, and touched on what the future could look like for home-based, value-based care.

Below is that conversation, edited for length and clarity.

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HHCN: For those who don’t know, can you share a little bit about your journey in home-based care and your role with Integrated?

Pino: I came to home-based care about 20 years ago. I had been a corporate investment banker. I had started doing deals, or transactions, within the home care space, and I was introduced to someone within the home care sector. We decided to go into business together.

I joined that first business in the early 2000s. We grew it. It was a fully capitated home health, home infusion and DME company that contracted with Medicare Advantage and managed Medicaid payers. I believe we sold that company around 2012. In 2015, my partners and I came back into the market and we founded Integrated Home Care Services.

Today we’re really focused on value-based care. How does Integrated Home Care Services fit into the value-based care picture? How are you trying to advance this area forward, so to speak?

When we speak about the topic of value-based care, it appears that everyone has a different opinion on what value-based care is.

I would say that back about 20 years ago, value-based care was limited to capitated risk-based agreements, where in which the value was derived from an alignment in payment methodology from payers. Now, IHCS is a traditionally – or a largely – capitated vendor, although we have different payment types and different payment arrangements that include other types of value-based oriented revenue streams.

If you think about touch caps, if you think about capitation with reconciliations and other threshold-based payment arrangements, we handle all of those. But what we really find is of significant value is not just a payment arrangement. From our perspective, every one of our contracts has significant SLA associated with them. That includes specifications around quality, specifications around turnaround times, and compliance and other metrics, that our plan partners, our providers – and more importantly – our patients all appreciate and derive some sort of value from.

I totally agree when you say that everybody has their own perception of what it means to deliver value-based care. Some people really fixate on the quality component, some people really fixate on the cost component. At the end of the day, value-based care is really all of it together.

I agree 100%, it has to be all of it. You need high quality, you need speed and you need some sort of financial arrangement that makes sense for all people, right?

You really want to incentivize the right type of care, not just an abundance of care. There’s additional fee-for-service models, right? There’s people that are coming in and just performing services. They’re performing those services so that they can be compensated, but traditionally, there is no tie in to outcomes and to other performance metrics. When you think about the way that a managed care plan that has experience in value-based care, they’re also tying folks that manage the home care benefit to many more value-based oriented criteria.

Similar to ‘everybody has their own definition of value-based care.’ I think a lot of people care about different outcomes and different metrics. I think that rehospitalization rate is obviously a really big one. I think the rate of missed visits into the home is one I’ve heard talked about more. What are some of the most important outcomes metrics?

There’s an old saying that if you’ve worked with one managed care plan, you’ve only worked with one managed care plan. I think they all have their specific views around utilization and other parameters that they feel are most important.

One of the things that’s often missed, as we talk about this post-acute care space … we think a lot about diversion, right? Think about pre-acute, think about the fact that there are patients out there that are suffering from chronic condition sets that require very basic types of medical equipment or other items, or some sort of intervention. When you have the availability of services — we view DME, home health, home infusion, LTSS, and PDN as all part of our service offering — you’re really able to pivot and do what’s right for the patient at any point in time. With a simple phone call to IHCS, either a care coordinator at a health plan, or a physician or other folks can just reach out to us and make sure that a patient that doesn’t need to present it in the emergency room is seen.

You’ve seen a lot of activity recently in terms of mandates coming down from CMS. You’ve seen the recent view around the managed care rules, everyone has an opinion. The states have been doing all of this care coordination in lieu of service type business for many years.

Right now, what we find is that the services that we’ve been performing on the front end to make sure that a patient is seen and seen quickly, we’re already working around what we believe is to be the appropriate and most expeditious way of serving a member before they present. As you indicated, though, when you think about readmissions, there’s this misconception around them. In many instances, especially if you’re looking at Medicare Advantage plans or other traditional fee-for-service payer, what you’ll find is that many of the plans are not necessarily on the hook for the readmission. You’ll find that, in many cases, the hospital and the methodology of payment under some sort of traditional DRG-like structure, they’re on the hook.

What we find is that it’s not just about readmissions, in terms of cost savings, but it really is about the patient journey around whether or not a readmission is avoidable. A lot of people just focus on the cost structure. Having a patient re-present, having a patient potentially have a hospital-acquired condition that comes into their life, and also what you see in terms of the dislocation from that patient’s home and their family, all those things are high-quality oriented issues that don’t necessarily, in every instance, cost the plan additional money.

What would you say some of the biggest challenges are today for home-based care providers when trying to seek out these value-based care opportunities, and then do well in them if they enter into one of these arrangements?

Realistically speaking, what we find when we’re thinking about smaller providers that want to work with us under a value-based arrangement, is a lack of capacity to serve an entire population.

When you’re thinking about your traditional value-based arrangement, you have someone that says, “Hey, I’m going to take this book, or this geography, or this group of patients, and I’m going to perform X, Y, or Z. The results that I yield will provide X, Y, and Z as well.” What we find is that a lack of capacity to serve large swaths of a population can really slow down someone’s ability to have some sort of true value-based arrangement. Now, if the value-based arrangement with a plan is focused on a quality-only component then, quite frankly, the issue that they have is getting a network management person to sign a contract that’s unique, and to come up with an appropriate reimbursement structure for that provider, when they have so many other provider network agreements that they have to configure. It’s really understanding whether or not you can make a significant enough dent to garner some sort of unique contract.

If I’m that person with the managed care plan, setting up a value-based care arrangement, do I just copy and paste the language from one home-based care provider to another, or am I really trying to cater it to what that provider does well?

Nine times out of ten, there’s a standard network agreement, and the only thing that changes within the network agreement is specifically around reimbursement. What you’ll find is, “Hey, here’s our agreement. Here’s a provider fee schedule associated with the agreement.”

Now at IHCS, we have the ability to customize down to the provider level. We have the ability to set up rules in place and other conditions, where a value-based arrangement with a downstream provider is something that we’re more than willing to do, given the appropriate parameters. For us, one of the most important components of our service offering and the manner in which we contract with payers, is the time to staff.

If you think about the speed in which one is required to staff in order to be able to adequately discharge a patient in a coordinated fashion, so that that patient doesn’t re-present within the emergency room, or any any facet of the hospital, or inpatient setting, we need to coordinate all lines of business. If you think of a home health agency that needs to show up after the infusion medication gets there, that infusion medication needs to get there after the patients in the hospital bed. All these functions are things that require coordination.

When you have an entity like ours that’s working with multiple providers to make sure that we’re getting the most appropriate provider out there, as quickly as possible, these things can change. We’re not looking for the easiest provider to call, we’re looking for the best provider to call. In almost all of our arrangements, when we go live, and in almost all of our utilization, small to regional providers have the bulk of our business. Our competitors have a significant amount of exposure, and services being provided by large national home care entities, and by large national DME companies.

When you think about the way that our network participants are assembled, it really is different, we really do focus on the smaller entities. From our standpoint, customizing around those smaller entities and making sure that those entities understand the potential volume that they’re going to be receiving really makes a significant impact for them, in terms of planning. It also allows us to really plan around the ability to meet our SLAs on discharges.

Can you walk me through a real world example of a value-based care arrangement in home-based care?

We recently went into the market of South Carolina in a very large way. What we recognized before going into that market was that there were significant concentrations of utilization, specifically around home health, that were being directed to entities that may not have necessarily had certain utilization patterns that we wanted to continue.

We set up parameters, working relationships and guarantees around quality and staffing, and speed to staffing and communication with a core group of network participants that you would consider to be regional to small entities. With those arrangements in place, and with their clinical reporting, we have found that we have right size utilization to the point where these entities are always busy now. They’re not busy with turning around the same patient over and over. They’re meeting their goals, and then they’re receiving additional referrals. What we’ve seen with certain entities is the ability not only to come up with a methodology in which they want it to contract, but also deliver on the promises of “If you need us to staff, we will make someone available to staff. As long as we agree that if we continue to perform this way, we will continue to receive the amount of volume that we’re receiving.”

Those types of arrangements with these providers — there’s some that we’ve looked at now that have grown tenfold, in terms of volume that they’re receiving from this specific planned cohort. We’re really excited for them, and they’re really excited about working with us.

How do you see the future of value-based care in home-based care contexts evolving, as we look ahead at 2025, 2026, five years from now?

Let me start with a little bit about our team. Our team has a significant amount of managed care experience, we have provider expertise. Our home care leads … have over 30 years in certain instances, and certainly over 20 years in provider-oriented experience. Our senior team has a significant amount of managed care experience, coming from a diverse background. I’ve personally had the opportunity to establish and build out a large primary care risk-based MSO..

When you think about value-based care, what you need to start with is who is responsible for the dollar value of what’s being provided, and then ultimately, who is accountable to make sure that those dollars are adequately allocated? When you think through that component, then you start making assessments around, what is it that you’re going to be able to do to positively impact those stakeholders, by positively impacting all other components of care? In our specific case, we’ve started working very closely with risk-based entities. When we start speaking to them about how they want us to grow alongside them, what we have found is that the value-based arrangement and environment that we see evolving is going to be one that goes outside of your traditional skilled home-based care.

What we find is that we are being pushed more and more to make sure that we’re looking at whole-person care, that we’re looking at what specific things a member needs, in order to be able to be home. This includes components of contracting around identifying certain aspects of what’s happening within the home, whether it be food insufficiency, whether it be loneliness, whether it be, believe it or not, electricity. All those components, I believe, are going to become more and more salient as we see true value unlocked within the home setting.

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The company has established several value-based arrangements across the country, in places like New Mexico, Illinois and Arizona.

“There may be a little bit of difference between them, but I think fundamentally, we get paid for our services at the rate that we normally would,” Brad Bickham, executive vice president and chief operating officer at Addus, said Wednesday during a presentation at B of A Securities Healthcare Conference. “There can be a gain share component to it, so there is an upside component, depending on how we [perform on] certain metrics. Some of those may be related just to rehospitalizations, some may be a combination of hospitalizations and ED usage, and then also looking at quality metrics as well.”

Based in Frisco, Texas, Addus provides personal care, home health care and hospice care to over 49,000 consumers through 214 locations spanning 22 states.

The company has begun to heavily invest in its value-based care program.

One of the ways it’s doing so is through its rollout of a new case management software. The software was a key component in Addus’ effort to scale the program, according to Bickham.

“We’ve moved from having a team of individuals that have been getting changes in condition that our caregivers send to us to now [putting that] into the system,” he said. “The system is now doing risk scoring on clients, so that we can scale it to be able to target specific individuals who actually need to have some sort of intervention. We’re really positive about that development, and what that bodes for the future.”

The software also allows Addus to tweak the algorithm, and improve this risk scoring component, as the company receives more data. This will, in turn, help Addus better determine which interventions work best.

Bickham noted that the payers that Addus is currently partnering with are looking to expand these existing value-based arrangements. Plus, the company is seeing interest from other payers.

“There’s no lack of demand for that type of arrangement,” Bickham said. “It’s really getting with a payer that’s going to be a good partner with you to be able to make sure that, if we’ve got interventions that need to take place, we have an engaged case manager on the other side that can help us make those changes.”

Right now, value-based care is a smaller part of Addus’ overall business. However, the company is hoping to see substantial growth over the next five years.

“Does that mean it grows to three or four times the size it is today? As a billion dollar company, it’s going to be hard to become material for a while, but it is certainly something we’re very excited about,” Addus CEO Dirk Allison said during the discussion.

Looking ahead, Addus is excited about its latest contract.

Allison noted that if it works well, it will help the company form partnerships with more Medicare Advantage providers.

“It’s a small contract, and instead of gain-share we’re taking some risk,” he said. “Now, it’s very minimal. We’re only taking risk for our part, for our hours. We wanted to — I won’t say experiment — but we wanted to enter into a contract with a payer that we could partner together to determine if adding personal care hours can help reduce overall medical loss ratio for their patient base. We’re excited about that. We’ve only been in it less than a few months.”

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The Transforming Episode Accountability Model (TEAM), which would eventually be mandatory if finalized, would have selected acute care hospitals put under full responsibility for the cost – and quality – of care from surgery up until the first 30 days after hospital discharge.

CMS said that the model would build on the already existing Bundled Payments for Care Improvement Advanced (BPCI-A) and Comprehensive Care for Joint Replacement models.

The proposed model would launch on Jan. 1, 2026, and run for five years, ending at the end of 2030.

“TEAM would be a mandatory episode-based alternative payment model in which selected acute care hospitals would coordinate care for people with Traditional Medicare who undergo one of the surgical procedures included in the model (initiate an episode) and assume responsibility for the cost and quality of care from surgery through the first 30 days after the Medicare beneficiary leaves the hospital,” CMS wrote. “As part of taking responsibility for cost and quality during the episode, hospitals would connect patients to primary care services to help establish accountable care relationships and support optimal, long-term health outcomes.”

Given those all-important 30 days post discharge involved in the TEAM model, home health providers will naturally play a role in helping hospitals achieve high-quality outcomes.

The National Association for Home Care & Hospice (NAHC) is still awaiting further details, but sees home health agencies as squarely involved in the Innovation Center’s proposal.

“Much of the specifics are still to be decided,” NAHC President William A. Dombi told Home Health Care News. “Home health agencies can be expected to be significantly involved with the participating hospitals given the nature of the surgical patients that will be targeted, such as hip fractures and joint replacement patients.”

As part of its strategic direction, CMS wants all Medicare fee-for-service beneficiaries to be in a care relationship with accountability for quality and total cost of care by 2030.

TEAM would be yet another model furthering that goal, if enacted.

Dombi also noted that there could be both upsides and downsides to the incentives tied to the model.

“In many ways the integration of home health agencies will be essential to achieving the price targets that the hospitals will be operating under during an episode of care,” Dombi continued. “The upside is the likelihood that agencies will see increased patient referrals away from what might otherwise be a SNF referral. The downsides include the potential that the hospital will push patients towards the hospital’s outpatient services.”

Home health involvement

The BPCI-A model, which CMS referenced in its TEAM announcement, is a good comparison from the home health perspective.

“They can be involved in formal alignment agreements with participants that could take a variety of forms, and those could be financial, those could be participatory, those could be any number of things,” Michael Wolford, principal at the public accounting firm Forvis, previously told Home Health Care News regarding BPCI-A. “Home health tends to be a lower cost post-discharge setting for Medicare patients. Providers with financial incentives that exist in the BPCI-A model often look for a combination of clinical efficacy, successful patient outcomes and cost-effectiveness of care. Home health tends to rise to the top in those situations.”

Nick Seabrook, the managing principal at the home health consulting and executive search firm SimiTree, sees home health providers playing a similar role in the TEAM model.

“There’s a new CMMI initiative that just came out yesterday, the TEAM model,” Seabrook said at Home Health Care News’ Capital + Strategy event last week. “And basically, what it’s aimed at is better care coordination post-surgery. So, working with home care providers and other post-acute providers to make sure that [beneficiaries] are getting those adequate services that they need after those surgeries.”

CMS mentioned that care for post-surgery beneficiaries can often be fragmented, resulting in poor outcomes.

Health equity would also be a key measure under the TEAM model.

“People with Traditional Medicare undergoing a surgical procedure either in the hospital or as an outpatient may experience fragmented care that can lead to complications in recovery, avoidable hospitalization, and other high costs,” CMS wrote. “This is because in a fee-for-service (FFS) payment system, providers and suppliers are paid separately for each service and procedure, potentially resulting in fragmented care, duplicative use of resources, and avoidable utilization.”

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