“We’re like the advocate and navigator … when you’re building a home, you’ve got plumbers, you’ve got electricians, you’ve got masons. You’re not an expert, so you hire a general contractor to figure all that out. We can fill that role for the consumer,” WellBe Senior Medical CEO Jeff Kang explained during the latest episode of HHCN+ TALKS.

Kang is the former CMO of the Centers for Medicare & Medicaid Services (CMS). Since his time with the agency, he’s worked with payers and providers. Now, he’s bridging the gap between the two with WellBe.

The Chicago-based WellBe offers home-based medical care services to patients who are facing multiple complex health challenges. It is backed by the private equity firm Chicago Pacific Founders.

Kang sat down with HHCN to talk about the current state of home-based care, what providers can do to enhance their value proposition and much more. Highlights from the conversation are included below. View the episode here.

HHCN: I would love to talk about your background, because I think it’s a pretty unique one. Could you take us back to your days at CMS, and even before that?

Kang: 40 years ago I was a geriatrician up in Boston, and actually did home visits before anyone ever knew what a home visit was. For about 10 years, I was running a group practice, doing that, caring for people in nursing homes, in the home etc.

Then, as you said, I went to CMS. I was the first and longest-serving chief medical officer at CMS. I actually was responsible for the conditions of participation, so we regulated the home health agencies.

From there I went to Cigna for about nine years, so I certainly understand the health insurance side. I was their chief medical officer.

Then I went to Walgreens, where I ran all their clinics. They had about 800 clinics around the country. I learned about consumer health and consumerism from a retailer.

Then I went to ChenMed, a private medical group that takes care of the elderly patients and they deliberately locate their clinics in low income areas. Now, I’m CEO of WellBe Senior Medical, which we’ll get into. I’ve seen health care from the retailer’s perspective. I’ve seen it from a health insurance perspective. I’ve seen it from a federal perspective. I’ve seen it from the provider perspective, certainly in the home.

How do you think home-based care, in general, has changed since your time at CMS? Obviously, COVID accelerated things, but where have things changed and where have things stayed the same?

I was at CMS from 1995 to 2002. Let’s go by segment or sector.

Home health agencies existed then, and it was covered by Medicare. I think the big difference between then and now was the implementation of OASIS, we actually did the rules for that. It basically changed home health from a fee-for-service per-diem model into a bundled or capitated model, similar to a hospital DRG episode. I think that was a big change for home health agencies.

When I look at home care, or personal care, that largely hasn’t changed. The issue there has been, who’s going to pay for it? The big difference, probably, in the last maybe 10 to 15 years is that Medicaid, state agencies, have actually started paying for it, as part of an effort to keep people out of nursing homes and in the home. You can get personal care assistance in many states, not all states. The goal there is to provide those personal care services to keep people out of nursing homes.

Durable medical equipment in the home is largely unchanged. Home infusion has changed a fair amount because there are more drugs that can be delivered at home. Otherwise, from a reimbursement perspective, it hasn’t really changed that much.

Hospice in the home has not particularly changed that much. There have been some variations around cost qualifications, how to get into hospice and how long you’ve been in hospital, but in general, not much. That’s from a traditional Medicare perspective.

There has been an increasing amount of efforts by Medicare Advantage plans to step up and provide what they’re calling transitions of care programs, or post-acute care programs. Basically, following the hospitalization if someone doesn’t qualify for skilled home health, but they still need some transitions of care support. The last big change, which is fairly recent – let’s call it the WellBe Senior Medical model – is primary care or longitudinal care in the home. It’s difficult to do in Medicare fee-for-service. It can be done, but I think that’s largely accelerated by Medicare Advantage plans.

A long time ago, home-based primary care was the norm. Then for a while it went away because it was more viable if 15 or 20 patients came into one place, as opposed to you going to all of the patients. What made that viable again, as a business model?

If you look at Medicare fee-for-service reimbursement, in order to economically make home-based primary care work, back then, you would have to do maybe 12 visits a day. This is a little difficult with the drive times and everything.

Under current Medicare rules, you might be able to get around eight to 10 visits a day because now Medicare’s starting to pay for care coordination visits and post-hospitalization visits. The big difference for WellBe is that we are only doing four to five patient visits a day. That’s because the patients who are really sick, they really need it.

The big difference is the introduction of a value-based model. We are not actually dependent on fee-for-service billing. We are, essentially, both the provider and the payer. We’re economically responsible for the hospital bills, the radiology bills, the specialist bills. That’s a value-based model or a full risk model. We can make it work because we’re prepared to spend the time with the patient and keep them healthy and out of the hospital. We make money by keeping people healthy and out of the hospital. It’s completely flipped. In the fee-for-service world, you make money by just seeing as many patients as you can a day, but that’s not necessarily good for the patient.

When you’re in a value-based care model, you’re not worried about increasing utilization too much, because you’re doing it for the patient. You’re not worried about overutilization or underutilization.

It’s interesting, people do get a little more worried about underutilization. A lot of health policy experts will estimate anywhere from 40% to 60% of the care that’s occurring in this country is either unnecessary, avoidable or due to error. We’re really not at risk of doing too little care. From our perspective, the goal is to provide as much primary care as possible for the avoidance of multiple emergency room visits, multiple hospitalizations.

Last time we spoke, you wanted WellBe to be the general contractor of home-based care. Can you explain what you meant by that?

From a consumer’s perspective, there’s skilled home health, there’s home care, DME, home infusion, hospice, Meals on Wheels. It’s a plethora of things. The challenge, from a customer’s perspective, is how to orchestrate and organize. Many of these things actually need a doctor’s order. For personal care, you need a functional assessment from a physician to qualify.

In many ways, groups like WellBe are essentially that physician, nurse practitioner, quarterback. I use the word general contractor. We’re like the advocate and navigator, out of all of those things that can be done in the home. When you’re building a home, you’ve got plumbers, you’ve got electricians, you’ve got masons. You’re not an expert, so you hire a general contractor to figure all that out. We can fill that role for the consumer.

Joining with primary care providers, whether it be regular primary care or home-based primary care, seems like an option for home health providers to start dipping their toes into risk.

I think that’s correct, but I will just say it’s going to take a while.

In Ohio, for example, we have 30,000 members or so. From a home health agency’s perspective, that’s just a really small drop in the bucket of the available lives, or members, that they’re trying to serve. I don’t think, right now, we’re large enough to have a really exclusive arrangement and make it worthwhile for a home health agency.

I think there is an opportunity for home health agencies to get in this value-based world. There’s this concept in value-based care of an episode. When you think about it under the Oasis, payment, that’s an episode of care, post-hospitalization. One of the potential outcomes of that episode of care is if you do a really good job, you can actually lower hospital readmission rates. I do think there are opportunities for home health agencies to basically say, if we can lower your hospital readmission rates, let’s actually gain share in some of those savings. I think there are home health agencies that are beginning to move in that direction.

What do providers get wrong sometimes about the way payers think?

I’m not sure they get it wrong. I think it’s a little more of trying to figure out how to best kind of talk in their language. It’s trying to figure out the outcome that the payers really care about. From a home health agency perspective, they care about readmission rates and lowering that, so that’s an opportunity.

From a personal care standpoint, there’s been a lot of progress here because the payer there for a lot of this is Medicaid. They care about keeping people out of a nursing home. If you’re going to work with the Medicaid payer, you’d say your nursing home rate admission rate is Y. We start serving the patients and can reduce that by 10%. Is there an opportunity then for [the home care provider] to share in some of those savings?

It’s more about figuring out what the payers really care about and then helping them solve that problem.

Do you have a prediction for the next five years for the home-based care space at large?

Lots of new entrants coming in, which is good. I think everyone deserves a WellBe-like model whether we’re delivering it or someone else is delivering it. I think there are many of our fellow companies that are also going into Medicare fee-for-service, but they’re doing it through the ACO REACH program. That makes a ton of sense. We’ve decided not to do that, but at some point we may come around to that. I do think applying this model to adult Medicaid, in particular the long term-care population, makes a ton of sense.

The post WellBe Senior Medical CEO On Demonstrating Value To Payers In The Home appeared first on Home Health Care News.

New Day Healthcare has been one of the most active acquirers in home health care over the last year. As it grows, it’s looking to set itself apart from the home health company archetype of yesteryear.

At the heart of New Day’s paradigm-shifting approach lies a commitment to remote home health models, a concept born out of necessity during the pandemic. Unlike traditional setups, New Day opts for a decentralized approach, ditching corporate offices allowing for more flexibility and adaptability in delivering care.

Amidst the promise of innovation, Herman remains aware of the challenges ahead.

From the seismic shift towards Medicare Advantage, to the perennial growth and workforce management hurdles, the road ahead is full of obstacles.

Herman sat down with Home Health Care News on the latest episode of HHCN+ Talks to chat about his company’s emergence and what lies ahead.

The transcript of that conversation is below.

HHCN: Scott, let’s start with background on yourself and New Day.

G. Scott Herman: I’m a nurse paramedic by trade. I’ve got 30-plus years of home care experience. I’ve been blessed to lead and form some of the largest companies in the country, including Harden Healthcare’s home health and hospice line, Jordan Health Services, and Elara Caring. I’ve worked in nearly every type of home care company including publicly-traded, not-for-profit, and private equity.

I’m currently the CEO and founder of New Day Healthcare. We’re a provider of home health, hospice, pediatrics, home-based community care and consumer-directed and personal care services. We currently serve about 11,000 patients on average daily census and we touch nearly 110,000 patients annually.

We’re operating in Texas, Kansas, Missouri and Illinois. We have 28 locations with nearly 7,000 team members. We’ve completed nine acquisitions since formation in July of 2020 and we have a robust growth and acquisition plan for 2024.

One of the interesting things that your company does is you have a remote home health model, especially in Texas. Can you take us behind the curtain there and explain what that means?

To take you behind the scenes, a bit of background is necessary. In late 2019, I sat with a few trusted colleagues and planted the seed to start a new home care company. We wanted to be capable of meeting the demands in the changing industry. We all had previous experience in mid- and large-scale organizations, and we understood the investment models and the effort needed to create a platform company.

The climate at that time was robust with acquisitions and the market was white-hot. Shortly after our concept was born, the pandemic hit and we all know the world dramatically shifted. Although we couldn’t predict exactly what would happen, we did know that things would not be the same; access to patients was limited, providers were locked out of facilities and labor became sparse and very expensive.

Our circumstance as a new startup looking to buy a platform became really interesting and we almost immediately had to pivot from our original plan. We knew we needed to build something that needed to be way different from anything we had previously done. We needed to rethink it all. We needed to rethink everything. We gathered around my breakfast table and wrote a very intentional purpose statement consisting of eight guiding principles. These principles allowed us to rethink it all and build something that could impact how home care is delivered.

Now, we weren’t working completely blind. We’ve been heading down a continuum integration for a decade but we were not able to close the loop, mostly due to investment models and demands. Understanding what we wanted to build, we etched out how we would build this and then what we needed to get there.

Interestingly, we agreed to hold the purpose statement and commit to it. Collectively, we agreed that if we could not build a home-based company capable of innovation we envisioned, we’d simply leave the industry. In other words, if we couldn’t do it our way, we were done.

That’s where our mantra, “Burn the ships,” was born, and this will tie into that remote model. In 1519, Cortés arrived in the New World with 600 men and famously burned his ships upon arrival. This act sent a clear message to his men that there was no turning back and no options. While we didn’t limit all of our options, we did take a very narrow path that defines success. The path has three simple elements.

Firstly, build a home-based care model aligned with payer networks and the growing managed care populations. Secondly, create a technology platform that enables our provider network to identify chronic disease indicators that create illness exacerbations while building out the care networks to intervene and improve outcomes — both clinical and financial outcomes for payers and providers. Finally, refine a comprehensive solution so that it can be injected into a national provider or payer to be meaningful in scale.

Our approach isn’t new; it’s people, process and technology. The technology is our Carelytics program — a proprietary combination of software, databases, algorithms and artificial intelligence that link in real time for intervention.

Let me briefly explain Carelytics at a high level because it’s important as we discuss this remote capability: We currently collect information from 14 different EMRs and data systems. The number of data systems we can collect information from is unlimited. We then run algorithms on the data to identify tendencies, and using pattern identification, we identify potential adverse reactions.

Our algorithms stimulate alerts that automatically notify providers and caregivers of potential issues. Internally, we deploy care teams. Externally, we alert providers and make referrals. These external referrals would only be in areas we don’t cover or don’t have full-service access.

Now, let’s consider that remote model because we started New Day during the pandemic’s challenges and we had to think differently. We began at the top of the formation with our corporate office and decided the organization should be run without a corporate facility.

Throughout my nearly 30-year career, I’ve prioritized keeping overhead low and investing in clinical care rather than expensive corporate offices and support. To this day, New Day has no corporate facility and all executives work effectively remotely. We adapted to the pandemic environment and never incurred corporate facility costs. This allowed us to develop innovative solutions to meet and communicate. It works for us due to our seasoned team and experience in multi-state organizations.

In 2Q of 2020, with the pandemic at its height of uncertainty, we really began to look at the tea leaves and where we thought this changing ecosystem might be headed. Finding a growing portion of home care census was shifting to managed care, we firmly believed this pandemic would push seniors to MA plans at an accelerated pace. We began looking to acquire a provider that had a remote model capable of delivering services effectively and on some scale. We located a provider serving the entire state of Texas from a single location.

As we worked through the operation and the model, we were convinced that a remote workforce plan could work and effectively serve the growing managed care populations in a non-episodic capacity. We were able to acquire this provider, Home Care Providers of Texas, and we began to develop and scale remote-operated home health businesses. Home Care Providers had been around for 20 years so we had a good workforce and a base to build on.

Because we were creating something new, we had the luxury of building it for purpose and we weren’t burdened with the ingrained legacy process of models that are facility-tied that tend to drive increased expenses, not very much brick and mortar, so we were not dragged down with those expenses and we had a business that was very accustomed to running remotely. We had to build and insert scalable processes, which began with EMRs, finance system, contracting expertise, especially important, recruiting, hiring and training.

At the peak of the pandemic, we were hiring at an astonishing rate and we were able to move quickly to staff cases. The growth of MA plans actually accelerated at a much faster pace than we really anticipated. We had to ration admissions, pull payers based on reimbursement while we renegotiated agreements. Today, our Texas home health operations operate functionally with approximately 72% non-Medicare episodic patient mix. We’re off to a good start, but we’ve got some work ahead of us in this remote model.

Something that I put in a recent HHCN+ update, Scott, was a quote from you, basically saying that home health providers were unprepared for — and still are unprepared for — the looming MA penetration. What do you mean by that? Why do you think there’s such a lack of preparation among the home health industry when it comes to Medicare Advantage?

What I mean by the fee-for-service model being obsolete really means that the traditional episodic models have evolved. Patient mixes of 85% and 90% are unsustainable levels for home health providers, on scale anyway, and unsustainable in the foreseeable future. At least that’s what we’re experiencing internally in our markets.

The rise of Medicare Advantage and per-visit reimbursements shifted dramatically in the pandemic, maybe it’s traumatically, but it’s also dramatic. Maybe the pandemic seems to have accelerated that. According to the Kaiser Foundation, 31 million people are enrolled in Medicare Advantage Plans, accounting for more than half of the eligible population, 51%. Those 31 million people represent $454 billion or 54% of total Medicare spending — and that’s net of premiums.

The average Medicare beneficiary has 43 Medicare Advantage Plans to choose from. It’s the largest they’ve ever had. That’s an insane number to me — and that’s grown. We see how MA plans market — their persistence is winning the day. The current baby boomers entering retirement were introduced to managed care and have participated in managed care for 20 years or more. These retirees were raised in managed care plans. The stigma of managed care is not the same for those new retirees. They’ve been in those plans for extended periods, and they don’t seem to be afraid of the option limitations.

MA plans have been sweeping the pots with medication supplements, transportation, vision, dental — even cash and food. MA marketing is large-scale. It’s effective in winning market share. When we talk about market differentiators, we’ve created that option from data. Kaiser Foundation said nearly one-third of Medicare beneficiaries live in a county where at least 60% of all beneficiaries are enrolled in MA plans. Those are metro-concentrated. Communities are converting to MA plans and I’m sure it’s focused marketing that’s making it work.

Not all markets are built the same, we customize our offerings by market. Most providers we look at and work with are longer-term legacy operations. They built their business over many years in highly competitive markets. The competition for finite clinical resources demanded that home care providers step up and pay benefits and to compete. They had to compete with health systems. Having heavy traditional Medicare mixes made that possible.

This conversion of patients to Medicare Advantage meant that you could no longer manage large caches of traditional Medicare patients because they just weren’t there. Because reimbursements were so much lower, the traditional models are suffering. There’s a fundamental shift in how these organizations have to operate. Smaller providers are against the reality that they do not have the resources to create innovation, and the rising cost of labor to include wages and benefits just compounds the payments issue.

As owners see margins slip, labor costs rise. They’re just struggling to keep up. In my opinion, it’s not that providers are not willingly slow to adapt, it’s the resource constraints that make that adaption pretty difficult. Investments in technology, refining processes and taking big care model leaps are just difficult transitions. We find many providers coming to the market don’t have the contract negotiations used to meaningfully move rates and terms, and they cannot supply the compelling data needed to manage these large-scale populations. It’s just an evolution of the space. I think the slowness of adoption is really about the ability and access to resources for these smaller providers.

Resources are certainly a big part of it, but in 2024 and beyond, what can home health providers do to catch up, in your estimation?

How we prepared is we bought a large-scale statewide provider in Texas to attack the problem and create a solution. Our remote operating strategy is effective. It’s improving every day. We’ve invested in technology and the development of our paralytic software and support programs to identify patients early and intervene.

This has proven to not only be a cost-effective avenue for cross-service line referrals, but it’s evolved into a community outreach and new community patient acquisition tool. Because we’re heavily involved in the communities in which we serve, our culture and our traditional brick-and-mortar businesses in the north — which are higher producing more successful businesses in Missouri and Kansas through our Phoenix Home Care and Hospice line — are very culture-ingrained. They have pop-up meetings in the community. They don’t do them in the bricks-and-mortar buildings and the locations that they have. They go to the community. They provide meals during Christmas that can be drive-thru meals or sit-down meals. They meet their staff at coffee shops and parking lots, and that ingrains them in the community.

Because they’re ingrained in the community, the community looks to us for senior care operations. We may not have all the solutions, but the contacts that we get when the community calls us for senior care options, the contacts that we get result in database input and access to resources for patients. It allows us to follow potential patients.

We process thousands of inbound calls every day and a rapidly growing number of social media contacts. As the contact occurs, we route plans, implement care resources for the patient in all our lines and all our offerings. If we don’t have the needed services, we refer it out, but we manage the patient in our Carelytics database.

When a need is identified, we enter data into Carelytics and we do that over a thousand times every single month. These entries are run through our software and our algorithms and they help define potential needs. We get automated responses when we have a trigger to our Carelytics teams and they assess, develop plans for patients, then they make referrals, internal and external, if appropriate.

Our Carelytics is about 35% deployed for our enterprise. We have 60,000 patients in our database. In 2023, we had 18,000 clinical patient interactions and about 2,500 cross-company admissions. Approximately 200 chronic disease patients are tracked on the hospice path each month and in all our programs, we admit over 5,000 patients annually through Carelytics and that’s 35% deployed.

To address preparations, the things I outlined took a very high level of investment and commitment to do things differently. You see, “Burn the ships” isn’t just a catchphrase, we’re living it with our investment partners at Kaltroco. Not many organizations are positioned to either invest or commit to rebuilding the new provider paradigm.

If they’re large enough, they have the resources, they’re often committed to traditional models, it causes a lot of redesign and that takes time. Our startup position gave us the latitude to build for purpose and we can manage, remote and integrate traditional programs on scale. Providers have to engage data and have to find ways to engage in Medicare Advantage plans.

You’ve had an impressive run here during a mostly quiet period for the home health industry. What has been your M&A strategy? Before we get to the future, what has been your M&A strategy over the last couple of years? How have you found targets? How have you ultimately decided that they were in the right markets, that they had the right people? Then, also, how do you integrate them once you actually have agreed on a price?

We’ve got a great investment group focused and committed to doing well by doing good. Kaltroco North America is led by Kenny Hammond, the Chief Investment Officer, along with our commercial lender and co-investment partner, First Citizens, formerly CIT. They’ve been crucial not only in supporting our investments, but as strategic partners.

Kaltroco delivered innovation development from day one. They supported it. We funded it, beginning with the investment and team members before we had an asset or a real line of sight on assets. Because we committed to not working with short-sighted partners and only accepting reasonable returns, we’ve been able to be very selective in building this enterprise. We’ve kept our leverage very low, and we’re in a very liquid position in time when the industry was struggling, so our discipline put us in a very strong investment position.

Our investment position discipline is something we outlined early. Three core elements. We do not take on train wrecks. In my career, I’ve been and have seen over-optimism around turning companies around. It’s always harder, it takes longer than ever envisioned and then, it gets in the way of innovation. More often than not, the juice just simply isn’t worth the squeeze for us. We want good culture and compliance companies. Good companies begin with culture. If the cultures do not align, we simply do not chase the deal. Chasing culture, changing culture is extremely difficult, time-consuming and egregiously expensive.

Cultures develop for specific business reasons and that culture exists for a purpose. Good companies, by our definition, align with culture. If we do not align with a culture, we just don’t chase it. It doesn’t mean it’s bad; it just means it’s not for us. Good companies, by definition, do not have unresolved compliance issues. Unresolved compliance issues are troublesome; they’re most often always more problematic and reach farther than diligence uncovers.

All companies are going to have some regulatory oversight and corrective actions. That’s part of the business, and we all understand that. And by unresolved I mean no clear path to resolution. If we don’t have it, we just walk away.

Third, we have to demonstrate our capability. Back-office contracting skill and culture will produce performance and grow market share for the economy.

As we assess companies, these are the critical elements that we have to have. These three elements are core for us. We looked at over 200 companies over the past three and a half years and we bought nine because we adhere to the strategy that we will not overpay for companies. We will not engage in what became very aggressive auctions in 2020 and 2021. We simply stepped in, took a look, and stepped back. We knew that if we over-levered ourselves, if we played that position, we wouldn’t be in the spot we’re in today to move forward.

Is your M&A strategy going to change at all in 2024 and beyond? I assume the core principles are still going to be there, but is anything going to be different about the M&A strategy moving forward?

Yes, we are. Because we’re in a very good position, our leverage is low, we’re performing well, we’ve got really good diversification across our assets while taking care of 11,000 patients in four states. We’re not really impacted by one negative movement in reimbursement markets or one regulatory problem. Our ability to understand that patients are what matter, not as much the payer. The patient is what we really examine, the payer is how we fund that. A lot of organizations tend to look at payers driving their formation rather than the patient driving it.

Our M&A strategy is twofold. We’re in a great position. We’re very liquid. We’ve got lots of access to capital. We will be opportunistic for transformative assets, larger assets. We’ve been deep on several large assets over the past two years, but since the purchase of our platform company, Phoenix Home Care and Hospice, we’ve not pulled the trigger on another transformative acquisition. We would do those, but they will be based and executed on the things we discussed. It’s not a lack of capital. I said we’ve got plenty of that.

Really, the elements of culture, pricing and impact on patient mix changes closely tied to asset readiness have caused us not to pull the trigger on those. We are very interested and still looking at those. We’re seeking transformative assets of a larger size, $50 million plus. The criterion is size as well as geography, but looking to grow in the South and Midwest.

Second, we’re continuing to fill out our footprint with complementary assets. Those are in personal care and hospice in Texas, skilled and hospice in our other regions and PDN in Missouri, Kansas and Illinois. We would love to close five to seven solid transactions this year. We are open to size and scale. We would love to close more and we would like to be as aggressive as the market allows us to be in those transactions.

Layering on the services you do have in every single market — is that one of the goals?

One of the goals is to fill out our service footprint where the supporting reimbursement structure makes sense. In some states that we operate, being in the personal care, the consumer-directed care business just doesn’t make sense. In other locations, it makes a ton of sense.

In our Missouri operation where we have a pediatric business, it makes all the sense in the world because Missouri really stepped up and supported it. But in our Texas business, it’s a lot tougher. Where we have tremendous skilled care competition in Texas, we’ve got the state covered with home health and hospice. We want to layer in personal care services there. Then where we want existing footprints where it makes sense, we’ll lay in those complimentary services.

Where do you want the company to be in five years, with all the big ambitions that you have now? Where are those going to take you when we get to 2029?

Today, we touch 110,000 patients annually in that agency of about 11,000. In five years, I would be disappointed if we were not at 25,000 plus on ADC with a fully integrated Carelytics program.

Having said that, there are a number of factors that drive that growth and target, including stability to financial markets, reimbursement, state budget considerations and then of course the expansion of managed care. We do know that Carelytics is very attractive to the industry and we will have to decide at some point to hold and continue to build or let the technology move into the hands of a strategic more capable of national deployment.

Throughout 2024 and 2025, we’re focused on growing this enterprise through acquisitions and organic growth. More distant than that, we’ll be driven by the demand and the evolution of the market. We update our strategy every year, keeping a two, three-year focus.

What do you think are going to be the biggest obstacles besides Medicare Advantage?

Well, I will tell you that staffing has eased up and our recruiting strategy, tied in with our cultures, puts us in a really good position on staffing. We have very low vacancies across our organization. One of the reasons we’re able to do that: we kept corporate overhead really low and we’re able to ensure that every single employee that works for New Day — all 7,000 — is eligible for full health benefits. That’s full-time, part-time, PRN, every person at every level. If you’re a part-time employee, you’re eligible on day one.

One of the big cost pushers for smaller organizations as we go out and do acquisitions is the cost of health care benefits. They’re just rising and I will tell you that the pandemic has pushed them to unpredictable levels. Health insurance costs are rising everywhere. One of the things we do on an acquisition is we immediately implement our benefits plan and we upgrade benefits for almost everyone that we encounter. In fact, today, every company we’ve bought, we’ve upped their benefits. That doesn’t come at an additional cost to us. We actually get scale reductions at a lower cost, but those companies are benefit-positive day one.

We know that the health care paradigm has shifted. We know that cost is of essence out there. Another big obstacle to getting to our size is market conditions and the availability of quality assets. That’s probably the biggest factor. Elections will have a big impact on financial markets and investor confidence will respond appropriately. The labor markets are beginning to loosen up. We have had good success recruiting. We’re internally recruiting — with very low vacancy rates — but we’re seeing owners settle in and level set on home care market conditions that include reimbursement changes and regulatory oversight.

’21 and ’22 created very high valuation expectations. That frenzy’s a bit in the rear-view mirror. Sellers are beginning to settle on realistic value propositions. We see them either settling in and continuing to operate, letting the dust settle, or they’ve reconciled that it’s time for the value adjustments and are here to sell the company. The latter is being seen more frequently as the cost of capital rises and inflates. The quality assets coming to market might be our biggest issue in 2024. We’ve got a pretty good handle on the labor issue, at least in our enterprise, because of culture and the ability to spread benefits.

Do you have a prediction for home health care in the next year?

I think it’s all going to tie into what we’ve talked about, but the prediction is really pretty obvious. Home health M&A will open up in 2024. We’re setting expectations around pricing and whether the final deals get done or not. The free money days that drove prices up, it’s just not available at the moment.

As previously referenced, ongoing confidence and sustained revenue-earning streams will make quality assets a challenge. However, good companies will draw attention and secure solid pricing. I actually have a second prediction and it’s around Medicare Advantage and it’s probably obvious. M&A will continue to grow and home care models will evolve as they always have because home care operators are very resourceful.

The question for all of us might be, where are we on the evolution adoption curve? Answering that question might be the biggest conundrum for home care. That prediction would be, “Are you preparing? Are you advancing on this M&A front?” If you are, there’s some survivability opportunity there and the ability to thrive. If you’re not, you might want to be thinking a little more about the previous, maybe reconciling on values, and maybe selling the business.

Now, those are the predictions. Data is going to drive the world. M&A is going to require more data. They’re going to get deeper into it. For us, in our particular strategy, size isn’t as important as quality in the product we deliver. We create our Carelytics program. We show cross referrals. We show community involvement, the ability to drive new revenues. We take that information and inject it into a strategy, then, that’s how you can change the face of home care. Does that happen in 2024? Big steps in ’24, but ’25 and beyond is what we’re really looking at.

The post How New Day Healthcare Plans To Be The Face Of A Changing Home Health Landscape appeared first on Home Health Care News.

When National Association for Home Care & Hospice President Bill Dombi left a home health care-focused hearing in Washington D.C., earlier this month, he did so on an emotional high.

That’s because, after a long two years for home health providers and advocates, things were finally starting to look up.

The hearing he attended was put on by the Senate Finance Committee’s Subcommittee on Health Care. The attending lawmakers were well educated on home health care, and seemed to sympathize with providers’ current plight.

That – plus other positive developments – has made Dombi more optimistic about the chances that the payment cuts set to be included in the home health final payment rule will be mitigated.

Home Health Care News recently sat down with Dombi during an episode of HHCN+ TALKS to chat about the upcoming final rule, the Medicare Advantage fight that will be a “generational” battle” and much more.

The video and transcript of that conversation are included below.

HHCN: Welcome everyone to another edition of HHCN+ Talks. I am Home Health Care News Editor Andrew Donlan. Thank you for joining us yet again. I am joined by a familiar face, Bill Dombi, the president of the National Association for Home Care & Hospice. Bill, thank you so much for joining me today.

Bill Dombi: Great to be with you. Looking forward to this conversation.

HHCN: Last week, I was listening in live as you were a witness for the hearing put on by the Senate Finance Subcommittee on Health Care. The hearing was specifically about aging in place and home health care. Can you just give the audience a little background on why that hearing took place in the first place?

Dombi: Well, when we were looking into our needs for 2023 advocacy, home health obviously became a big subject area, with the PDGM changes that were around payment rates and the like. We were forecasting what we saw, another significant rate cut, and we knew we needed Congressional support and figured, what would congressional support look like beyond legislation.?

We thought that we really needed to get a better hold within the Senate Finance Committee relative to their awareness and understanding of home health on an overall basis, not just the PDGM payment rates, and that we needed to bring in the effect of the PDGM payment rates. In spending some time with one of our great supporters, Senator Stabenow, the idea came up about doing a congressional hearing.

Senator Stabenow was stepping aside to have Senator Cardin be the chair of the subcommittee on a seniority basis. Senator Cardin has also been a long-standing supporter of health care services at home. We pursued the idea with the senators and their staff and the committee staff about doing the hearing. Somewhere in late spring, they gave it the green light for trying to pull it together. Originally, the game plan was to have it in May.

With all the other things the Senate had to deal with, it got kicked into September, which we think was actually fortunate because to have the hearing at the point when the proposed rule is being developed into a final rule, we think, was good timing. Thanks to some good Senate support, our thinking was we needed the awareness increase and we needed to have them get a better understanding of the issue. Senators, like any member of Congress, have a tendency to have a working area that covers a broad range of things. Having deep knowledge was one of the things we wanted to increase. They gave us that opportunity and we ran with it.

HHCN: Can you also give a little bit of background on what exactly your testimony looked like?

Dombi: I think I actually gave myself a label of sorts of being a historical professor to present some of the things that have gone on in the home health benefit. Among the things I wanted to emphasize was that Congress has been very supportive over the years of increasing access to home health services – recognizing the value, but recognizing some of the barriers as well.

That goes back to as early as 1972. Congress actually eliminated the cost-sharing responsibilities for home health beneficiaries to try to incentivize the use of home health services.

They removed the caps and the like, so I wanted to have that conveyed to show that we are not asking for some newfound support. We’re really asking to learn the lessons of history here that this is a Congress that recognized the value of home health services early on. We need to have that continued as a recognized value within the Medicare program today even more so. The second part of it was to convey that as much as the support has been there, it’s still been a roller-coaster ride in home health. Where we are today this is just another generation of that.

Focusing on where we were in the mid-1990s and where we were with the onset of the prospective payment system and where we were when the Affordable Care Act and all the health care reform happened with big changes in home health — particularly around payment rates at each of those kinds of stages. Then, of course, where we are today, a lot of ups and downs in the context of that historical presentation that Congress has supported home health care services in so many ways.

To really bring out that the roller coaster was mostly related to payment model changes, not to changes of the scope of benefit leaving patients as the prime losers in this roller-coaster ride — getting less than they did in previous times. Then the third element of it in my testimony was to say, “Where are we in 2023?” A combination of home care by the numbers, home health care by the numbers to show we’ve lost 500,000 Medicare beneficiaries using home health services.

The odd thing is that we’re spending in 2023 dollars an equivalent to what we spent in 1997 dollars, which, when you think of inflation, means this has been seriously cut over the years without Congress trying to cut the benefit. Only trying to deal with payment model things leading to benefit cuts. In knowing some of the other witnesses that were there, Judith Stein from the Center for Medicare Advocacy was also going to talk about what beneficiaries have lost over time. That was the three-part approach I took in my testimony to try to then say, “We need your help, Senators. We need your help badly and beneficiaries need your help, too.”

HHCN: I thought the statistics were very telling, both the ones that you presented and also the provider perspective in the room, just how they were being forced to reduce access to patients in the areas that they generally had served over the last decade. The hearing seemed to go very well, at least from my perspective. Do you feel like it went well?

Dombi: I left that hearing on an emotional high, really increasing my respect for the senators in terms of the level of awareness and understanding they had already on home health services — the values that they’ve seen, both personally as well as from their professional side of things. I think that to the degree to which any of the witnesses could have been problematic for us – like Dr. Grabowski – they ended up saying things that we liked.

We really had an opportunity that went into an area that we think has been under-involved and that is the innovation capability within home health. The senators clearly rose to the occasion on the issues of the PDGM payment rate cuts, but to have conversations about hospital-at-home and interoperability of electronic medical records and home- and community-based services under Medicaid and telehealth, all those kinds of things was almost the equivalent of being taken into a candy store of policy discussion.

It turned out to be fun. I thoroughly enjoyed it and I left there, like I said, on an emotional high. At the same time, I’ve been offering maybe an overused metaphor in my own life, but someone once told me after I hit a good tee shot in a round of golf that, “Well, now, you got to do something with it,” meaning all you did was hit the first shot. We have to do something with what came about in the hearing and the opportunities that we think have been triggered.

HHCN: It was striking to me how educated the lawmakers at the hearing were on home health care. One of them even said something to the effect of, “My viewpoint has always been, you cannot afford not to invest in home health care services.” Do you feel like there is a more educated group of lawmakers in Washington, D.C., now?

Dombi: At least of the 13 people in the room who are members of Congress, certainly. We have had those challenges over the years to get them to really have a good working knowledge of home health services. That’s mostly due to the fact that their portfolio is so wide in terms of work — even if it’s just health care alone. We have changes in Congress every year too, particularly in the House of Representatives, so we’re in a constant education campaign with them.

Many of the people who were there at the hearing had been around for a while and so they had accumulated knowledge, but we still underestimated the knowledge level that they portrayed in that event. That was really encouraging. Was it deep into the regulatory weeds? It was close, as compared to simply knowing the difference between home health and personal care services, which sometimes we consider a victory just when we have that degree of understanding of it.

What we’ve found also is that the personal experiences of the members of Congress are a good educational aspect for them. It used to be that we would try to work with the state associations to set up home care visits for the members of Congress so they could be somewhat understanding of it.

Now, most members of Congress, we’re finding, are having their own personal experience. A family member, a parent, a spouse, a child — the wide range of services — having that kind of direct experience. I think that helps gain some understanding at their end of it as well.

The first goal that we had for the hearing was to raise awareness. I think we did raise the awareness to a greater degree, but it started at a higher point than we thought it was going to.

HHCN: As far as the next steps, are there any tangible things that you want to get done in the weeks after to make sure this momentum keeps going?

Dombi: There are multiple phases to it. Obviously, the legislation that’s pending, it would be great to have that passed. But we’re not putting all our eggs in that basket. We don’t have a budget yet in the United States and we’re nearing Oct. 1. To get legislation passed between now and the end of the year will be a very heavy lift. What we’re looking at is some things that have actually started.

Senator Cardin, for example, put out a letter on his website talking about the hearing and talking about home care to broadcast what took place at the hearing to raise awareness of the need for help beyond that. In addition, we’re getting members of Congress to connect with the CMS administrator, the HHS secretary, and the White House to say, “Look, we may not be able to get done what we’d like to about some reforms in home health, but you can help us by putting a pause on these 2024 rate cuts.” CMS has the power to do that on its own.

Our next prime step really is to get that Congressional support to be used in more than one forum. Not just the legislative passage, but also to convince the regulators to step back from their proposal. We did this last year as well, but we think it’s going to be an even heightened kind of engagement coming from a bipartisan group of senators. It is a Democrat administration, so it’s nice to have Senators Cardin and Stabenow, et cetera, on the Democratic side helping to push the White House into a policy position that says we need to back off for 2024 because we’re losing care to people. It’s not theoretical anymore. It’s real.

HHCN: In terms of the current administration, there’s a lot of talk about investment in home-based care but a lot of that has been geared towards home- and community-based services. Is that something that’s had to come into the education process more about how home health care also needs investment and home health care also needs saving in this case in terms of keeping the cuts away?

Dombi: That is a great point. Candidate Biden on the campaign trail was really pushing for home care and he’s mentioned home care in his two consecutive State of the Union addresses, the first time ever from a president to bring about home care. That focus on home care was home- and community-based services, be it Medicaid or otherwise, and a focus also on the workforce. A focus on the direct care workers and their compensation levels and the waitlists for beneficiaries in Medicaid waiver programs for home care services.

We really need to make sure that interest in care at home extends into other areas like Medicare home health services, hospice care, home infusion therapy and how it goes on further into some of those innovative things that I mentioned earlier on as well. That has been a challenge that we think was somewhat shown to be maybe less daunting with the senators in attendance. They knew the difference between home health services and home care in that discussion.

HHCN: One of the points you made during the hearing is that Medicare Advantage often pays far less for home health services compared to traditional Medicare. Therefore, CMS is, to some extent, subsidizing those plans in paying for home health services. In order for providers to survive, they need a lot of traditional fee-for-service business. Is there any ground being made up on that? What do you hear from lawmakers when you bring up that point?

Dombi: We wish we had the pixie dust to do that in a nanosecond. The generational issue for home health today is that Medicare Advantage is growing. In terms of enrollment, the predictions that came out today — another two million people will enroll in Medicare Advantage for 2024.

The proportion of traditional Medicare and Medicare Advantage for the home health agencies has created financial problems because the plans, by and large, don’t pay the cost. They need the subsidization. Hospitals get subsidization for Medicare Advantage and traditional Medicare shortfalls; this comes from commercial insurance, a revenue stream that really doesn’t exist to any degree in home health services.

We have found when conveying those facts and figures to even the regulators, there’s a bit of surprise that’s there. MedPAC has been aware of this for a while. MedPAC is not supportive of traditional Medicare subsidizing Medicare Advantage, but I haven’t seen a single idea coming out of MedPAC on how we change that without disrupting the system for everybody.

We absolutely are behind an eight-ball with the plans, without any leverage. The home health agencies, yes, can say no to Medicare Advantage referrals of patients, but that’s at their own peril because the referral sources are looking for a place to send these Medicare Advantage patients because they can’t handle them financially either.

We need some way to bridge where we are today to a tomorrow where the plans pay their fair share. It’s a label I’ve been using, ‘their fair share,’ because the evidence is also out there that the plans are getting a darn good bargain in terms of quality care from the home health agencies.

The agencies serve patients as if they’re agnostic, but they are influenced by it because they don’t get the same level of care authorization that they may have the license to do under the traditional Medicare program, but they’re getting very comparable outcomes.

If the plans are going to continue to receive those high-quality outcomes, they need to step up to the plate and work with the home health care community to solve this. It’s very difficult to believe that Congress is going to step in and say, ‘Plans, you’ve got to pay more money to them.’ They may get involved in some sort of access standard.

It’s funny to bring back what Dr. Grabowski said when he was helping us on this one, accidentally maybe. When he talked about the number of home health agencies — two per ZIP code for 98% of the population — he then later said when he was questioned by one of the senators about this, “Well, supply does not always equal access.”

You could have three home health agencies in a network, and that doesn’t mean that you have access to care. This is, like I said, the generational battle. The battle we’re having today with PDGM and the payment rates pales in comparison to what needs to be done as the plans continue to grow.

We haven’t seen everything yet. Typically, the home health patient is in their 70s, 75, and later in their enrollment in Medicare. The plans tend to be on the younger side, the patients. Those younger people, when they age into their 70s, will start tapping into home health. That’s where the proportion becomes very scary unless we solve the financial relationship between the plans and the providers.

HHCN: Many home health providers mention Medicare Advantage plans to maintain the same payment rates for years. Balancing patient care with financial sustainability, they find it challenging to deny MA patients. Considering the dedication to patient care over profit, some feel they’re being taken advantage of. Regarding access, do you believe it’s time to shift from the simplistic notion that more home health agencies per ZIP code equate to better access? Especially after the recent hearing and provider testimonies, shouldn’t our understanding of access be more nuanced?

Dombi: Well, part of the legislation that’s pending, both in the Senate and the House bills (which are identical), requires some reforms within MedPAC analysis and reporting. I actually remember having a conversation with a MedPAC official, and they asked, “Why is it that Congress ignores our recommendations on home health?’” Because they’ve been recommending payment rate cuts much greater than we’ve seen for many, many years.

I had a pretty simple explanation for them: that MedPAC does an unreliable job of assessing access to care and looking at margins on an average basis without considering the range and margins to exclude hospital-based providers of home health services that may be the sole providers in some geographic areas. And then to do, as Dr. Grabowski revealed, a very, I’d have to say, silly test on access. How many providers exist on paper in a ZIP code area?

One of our board members was in Montana. He lives in Montana. He operated in Montana at that time, and lived in a ZIP code that was 25,000 square miles. If you have two home health agencies or one in a 25,000-square-mile ZIP code, what does that mean for access? You could have it as well within metropolitan New York City. There are parts of New York that might have plenty of home health access and parts of New York City that do not have the same access.

There are absolutely issues out there in terms of access to services. I think it may move us towards better information coming out of MedPAC and others as a result, perhaps, of this hearing. That’ll make our job at NAHC harder because we won’t have all the flaws that MedPAC has in its current analysis. When you look at average margins, for example, in terms of defining access to care, we look at the range of margins. We run these reports that show that 20% plus of all providers today have margins below zero on traditional Medicare, let alone way below zero on an overall financial status.

We have providers who have margins in the 40-50% range. Why aren’t we dealing with that issue there? Why isn’t MedPAC centering on how it is that you could have a reimbursement model that distributes payments so poorly that some people could be underwater and other people could have a 40% plus margin? It’s only a few, but it tells you a tale, I think, about just the flaws within a reimbursement system that allows that as an outcome.

HHCN: Even if there were seven providers within a four-block radius if none of them could accept new patients due to financial constraints preventing them from hiring additional staff, resulting in patient rejections, the number of agencies becomes inconsequential.

Dombi: Exactly. You look at [Mary Lanning Healthcare’s home health division]. They went from a 60-mile radius to a 25-mile radius. They still exist as a provider of services, but they’ve cut the patient population that they serve by more than half. That doesn’t translate to access to me. That translates to an access problem.

We presented the data on conversion rates, where 55% of referrals are rejected by the home health agencies for a variety of reasons, staffing, availability included within that. This has been an obvious issue for years that the existence of the home health agency does not mean access. There are hundreds of home health agencies that submit no claims at all in a given year. They’re paper home health agencies rather than operational ones.

HHCN: The hearing went very well. You’re happy about that. October is coming up and that’s obviously when we’re expecting the final rule. What are you expecting right now of that final rule and what are you ultimately hoping comes to fruition between now and, let’s say, Halloween?

Dombi: Let me answer the second question first. Between now and Halloween, we expect a flurry of activity coming from members of Congress, in addition to our grassroots efforts and our internal actions. An army of people is coming together to push closer to the finish line with some positive results. Noise in Washington matters. The more noise we make, translated by way of emails from constituents to Congressional offices, letters to the editor, op-eds in newspapers, and wider media attention, will help us gain some traction.

What does that translate to, and what do we expect? Surprisingly, even to myself, I declared I was a professor of history at the hearing. However, history just 12 months ago indicated to us that this kind of noise has mitigating results. The administration last year took the proposed 2023 cut and split it in half, which is why we’re dealing with some of it now for 2024. CMS has the power to mitigate it or eliminate it completely for 2024. An expectation, actually (and I don’t think this is an irrational expectation because of that historical action and because of the inroads that we’ve made here), would be for CMS to back off the cut, hopefully entirely, but at least in some partial fashion.

You may recall that at the hearing, one of the things we raised was the forecasting error in the inflation update, over 5% between ’21 and ’22. Other health care sectors had the same kind of effect in their forecasting error on that inflation update. We think CMS fully understands that they came up way short in that forecast, and that has an impact today and going forward. While they may not want to address the forecasting error for home health, at least they could back off of the rate cuts.

HHCN: So, it sounds like things are looking up, at least much more than they may have been just a few months ago. Which is great news.

Dombi: No one will ever accuse me of being Pollyannaish. Whether they even accuse me of being an optimist, I don’t know. I’m not trying to put on a phony face of positivity here. I seriously believe there is a good expectation for the mitigation of the cuts. It’s pedal to the metal, though, from our end of it relative to pushing on the advocacy side to try to see that happen.

If that happens, if they back off a portion of the cut for 2024, there’s a lot of work to be done because it’s still hanging over our heads. We really need to get out from underneath this dark cloud of these cuts on a permanent basis.

HHCN: The clawbacks too, obviously. You don’t want that hanging over your head.

Dombi: No. Just envisioning the word “clawback” sounds pretty violent, doesn’t it?

The post Home Health Providers’ Medicare Advantage Problem Will Be A ‘Generational Battle’ appeared first on Home Health Care News.

There’s not a single home-based care provider that doesn’t have a staffing issue, whether that be in recruiting, retention or both.

In order to combat that reality, BrightStar Care and Chamberlain University are teaming up and launching a home health care didactic course under the latter’s Practice-Ready, Specialty-Focused model.

The Chicago-based BrightStar Care providers home-based care through more than 380 franchised and company-owned locations nationwide. Also based in Chicagoland, Chamberlain University is a private health care and nursing school with 24 campuses nationwide. It has 137,000 students and alumni.

As hospitals became the center of the U.S. health system, home-based care work became stigmatized. Despite the budding, integral setting of care it is, students haven’t always viewed the home as a desired place to start their careers.

BrightStar and Chamberlain are hoping to change that, and will do so through a program that exposes students to all the good and bad that comes with being a home-based care worker.

Doing so, they hope, will not only drive more workers to the home, but also weed out early the ones that likely won’t find a career there – which also will reduce turnover rates.

Home Health Care News sat down with BrightStar Care CEO Shelly Sun and Chamberlain University President Karen Cox to take readers behind the curtain. In the conversation, they discussed the details, challenges and opportunities that come with the program.

The transcript of that conversation is below.

HHCN: First, for the audience that may not be familiar with BrightStar Care or Chamberlain, I do want to get a background on both of you individually as well as your companies. Karen, can we start with you?

Karen Cox: Of course. Chamberlain University is the largest school of nursing in the country, and it’s part of the Adtalem Global Education Group (NYSE: ATGE). Our organization, Chamberlain, has all the nursing degrees.

We have a BSN program that is campus-based and a traditional program in 15 states and 23 campuses. Then, after that, we have 2/3 of our students that are post-licensure, so anything from RN to BSN, MSN, DNP – we have the largest family nurse practitioner program in the country. I’ve been president for five years. Prior to that, for 23 years, I was the CNO and then the COO at the Children’s Hospital here in Kansas City where I live.

HHCN: And Shelly?

Shelly Sun: Sure. I have the honor of serving as founder and CEO of BrightStar Care, an organization I founded about 21 years ago after looking for home care for my grandmother and not having the experience I believe all moms, dads, grandmas, and grandpas should be able to expect.

I started in the midwest with a few company-owned locations, grew and expanded through franchising to 39 states, 400 locations, and now are starting to grow our company-owned portfolio that was about 3 locations about 18 months ago and is over 30 now, as we recognize healthcare is changing rapidly and we need to put our money where our mouth is with new reimbursement mechanisms and Medicare Advantage, as well as important partnerships, such as the one we’re going to talk about today, to make sure that we’re helping our franchisees navigate the labor landscape and the changing payer and reimbursement landscape.

HHCN: You have a partnership that is directly trying to address the staffing problem in home-based care. Let’s first give an introduction of what the partnership may look like. Then, I want to get to how it came about, how you guys were introduced to each other in the first place. Karen, do you want to go ahead?

Cox: Of course. Thank you. You just heard that both organizations are very large and have a scale that is pretty impressive and across the country. We felt like that would be a great partnership, to work on home care together. The reason home care came to the forefront is nursing programs, in schools of nursing, you don’t get exposed to home care. We know that home care is going to be, if it not already is, one of the fastest-growing specialties.

But if you have these preconceived notions of what it is – and believe me, it’s so much more complex than many of our students know – we needed to find a partner who could help us demonstrate that to these students in an organized way, and so we really worked with BrightStar in developing the content.

HHCN: Shelly, why did you think Chamberlain was the right partner for this?

Sun: I think they’re the largest and most respected nursing program across the country. I think it’s great that it is both a campus-based and virtual-based, and able to meet students where they are at their stage of life and stage of journey.

We were looking for how we can help more home health nurses enter the home care workforce, but actually, for when they come, they want to stay. Because, much to Karen’s point, many don’t know what it is and whether they’ll like it or not. It costs a lot to onboard and train new nurses and to have them come for one, two, three months and realize they want to go back to a hospital.

I think what we saw in this partnership was an ability to expand the number of nurses that have an opportunity to come into home care, but as importantly, a lot of nurses leave the profession. That’s because usually where they start, if it’s not an ideal fit, if it doesn’t check the boxes for what they’re looking for – both in leveraging their license and their education but also the heart of the work that they want to do – the worst thing for the profession in general is that they leave. How do we make sure they have more exposure during their nursing program to all of the different places where they could accept a job?

I hope it’s home care. But if they don’t like home care, I hope it’s not. Having that exposure to it was something that allowed us to really get excited and really lean into the hundreds of hours, many months that our clinical team put into trying to bring a customized curriculum to meet the needs and expectations at a very high level, because they are known to be the best with Chamberlain, we needed to help bring the curriculum.

We know how to do home care, we know how to do home health nursing, but doing that in a way that an adult learner is going to learn and be engaged is different. It’s taking some content, but a whole lot of adaption to get it to something that we both could be proud of co-branding.

HHCN: Karen, you mentioned that a lot of these students don’t know what to expect in home-based care. I think for a long time, there’s been a stigma about home-based care. That you want to be in the acute facilities when you’re younger, then maybe later, you’ll go to home-based care. They don’t recognize that it’s the most exploding setting of care in health care in the U.S. right now. When did this first come on your radar, Karen, as a problem that you needed to address to get more workers ready for this type of care?

Cox: There’s a 30% turnover rate of first-year nurses – that’s a cost strain and a resource strain, and it’s not productive for anyone.

We believe that there are two reasons for that. One is the work environment, and education can’t fix that. But we can address helping them understand where would be a good place to go.

The choices in nursing are broad.

The person who would like to be an oncology nurse isn’t probably the person that wants to be a nurse in the emergency department. Home care, perioperative, they’re all very different. We’re trained as generalists. We can do all of it. We just can’t guarantee you’re going to like it and find joy in your work, which is we know is very important.

This is part of a grant that’s called Reimagining Nursing funded by the American Nurses Foundation, and we were 1 of 10 schools to receive this grant. We started with perioperative care and then moved to home care.

The reason for those first two specialties is, as I mentioned earlier, you don’t get experience in those areas, and if you do happen to, it’s usually bad experience because there weren’t enough patients in the hospital. You went with a home care nurse one day or you stood in the back of an OR one day and not a good way to get people excited. We’ve also felt like, to get career practice-ready nurses to healthcare organizations, we had to teach them about those programs.

This is not a program that’s required. You select, you choose to take the didactic course, which Shelly talked about, and which BrightStar was absolutely the practice expert in. They go through that. If they pass it, then they can choose to take their 96-hour class, clinical class, in the last part of their program, and spend 96 hours in 1 of those 2 specialties with our partners, like for home care with BrightStar.

They get to see what it’s like, what it’s not like, and make a really informed choice. One of the things that we did in nursing leadership, and I did the same thing, for many years, those two areas, we told people you have to have a year of general med-surg experience before you can come.

Well, now we know that every specialty is different, and it’s important if someone has an interest to get them in then, because they may never come back. We have a pretty robust research project around this that we’re measuring results on. Our hope is that we increase the number of people going into the specialty.

I can say with certainty that’s happening. And If you have 96 hours, that’s a lot of clinical hours and exposure to a subspecialty. That’s really where that came from, is really wanting to help our partners. And home care is going to grow. Perioperative has grown, and they have a deficit of nurses, but home care is going to continue to grow, and we just want to be part of that solution.

HHCN: There’s a lot of power in being a home-based care worker as well. In some of the other settings, you really can’t impact the patient’s life as much as you can as a home-based care. I think that’s also a way to get more workers involved.

Sun: I just think that the timing is interesting as well, coming out of the pandemic. I think that we are at a great period of time where legislative policy is changing, and fundamentals around hospitals have had to change because they didn’t have enough beds to take care of everyone when they were trying to deal with the pandemic. It meant that more acuity was being done in the home.

You think about the stereotype of younger nurses coming out of school wanting to go into the hospital because they wanted to have the thrill, and they wanted to see more.

Well, guess what? The home is as likely to have some of the higher acuity as the hospitals would have, and that hasn’t always been the case. With hospital-at-home programs – we’re participating with some of the large hospital-at-home programs and skilled nursing facility alternatives – and we’re seeing a lot more high-acuity nursing being needed and demanded in the home. This is no longer just infusions and wound care.

More consumers like the thought since they went through COVID, not having to go into a hospital if they could avoid it, being able to receive more and more care – even if it’s higher acuity – in the home.

We’re a member of Moving Health Home, and they did a study. The great majority of those members in that survey felt very comfortable having even higher-acuity types of services done in the home as an alternative to hospital. I think that’s where the industry is going, and we have to partner together and make sure we’ve got nurses that are prepared to participate in that.

Cox: I’d also just like to go back to social determinants of health aspect. The Robert Wood Johnson Foundation released a study two years ago now called The Future of Nursing 2020-2030. It was all about health equity and how there isn’t good health equity in our country, by a long shot. Their conclusion was that, unless nurses play a large role in addressing the social determinants of health, we will have a hard time really impacting health equity.

When you’re in someone’s home, you get to see who they are as a person, and when they’re in the hospital, it’s a transactional practice in some ways. But in the home, it’s about how they live, who they live with, and what’s important to them.

HHCN: Shelly, I want to get a better idea for the audience of just how big of an issue staffing is right now by the numbers.

Sun: Yes, I think that – to continue to grow at the pace that we’ve been growing – which has been double-digit every year since I’ve started the business, we’re going to need 2,000 to 5,000 additional incremental nurses than we have today over the next 3 to 7 years to meet just built-in demand.

That’s outside of the national account program that we support in terms of some of the hospital-at-home and infusion companies, clinical trials that we support as well.

We see this being mission-critical. We can only grow if we have the workforce that aligns with our core values, which means they understand what they’re getting into. They are excited about it. They know they can make a difference.

I agree home care probably more so than any other area, you’re able to see the difference that you’re making in someone’s life and the family’s life on a day in, day out basis, but it’s not for everyone. Having an opportunity to have more and more nurses exposed to see if this could be the right calling and can be the right fit will be critical for our ability to grow.

HHCN: In terms of the curriculum itself, how are you designing it, Karen? What are some of the nuts and bolts of the program?

Cox: The program was developed through a partnership with BrightStar. It goes through what you would do in an orientation as a new nurse, but at a little bit lower level. The idea is that they don’t just walk in, they still have orientation, but it won’t be as long. Everything from just how you assess a patient in the home, the safety in the home, how do you look at what their needs are from start to finish, how you case manage.

All of those things are incorporated. Again, so they don’t walk in and just start bombarding a preceptor, a nurse who’s very busy, with very basic questions. We think it makes a big difference. And even if they take the course and decide not to go with home care, it means that they appreciate what their colleagues in home care can do and are doing for the patients.

HHCN: Shelly, I thought it was really interesting the point you originally brought up, which is that you’re not necessarily trying to push people towards home-based care, because if you did that, it would actually be more detrimental because you’d have an even higher turnover rate. It’s not as if you’re going to be painting home-based care as completely seamless job that doesn’t sometimes get tough.

Sun: Absolutely. I think that was the benefit of this program and having an opportunity to have a hand in the practicums that the nurses would go through with the 96 hours that they would do alongside some of our offices across the country.

We’re also talking to other partners that might be home health agencies that we have a good relationship with and know we’ll do the right thing, and we can agree on what’s going to be done.

I think it behooves the entire home care continuum to be able to have more nurses seen and exposed to it. We are trying to make sure that we have eyes wide open so that we have those that come, stay. The statistic, the 30% that come into nursing and then burnout, and leave the profession, that’s what we have to avoid.

Every single area of health care is going to have a nursing shortage.

How do we make sure that we align the nurses with what they want, what their interests are, and where they’re going to thrive so they stay? Whether that’s in a hospital, that’s in a nursing home, that’s in a med-surg area, that’s in a step down, that’s in oncology, or it’s in the home? Any of those are great. What we need to do is reduce that 30% down to 5% to 10%. By having more exposure to more specialties during nursing school, hopefully in time we will do that. I think this is a great start.

Cox: What happens, too, is that organizations – and rightly so – throw money at it, and money’s important. Nurses want to make a good living.

But if you offer a big sign-on bonus to work in home care or perioperative care, people may do it for the bonus, but only do it for the bonus period of time a year, 18 months, and then you’re back to square one. Whereas if you do it in a reverse order, BrightStar can see who’s interested, who’s going to do a good job, who wants to work in home care, and then they can talk about potential jobs and what some of those benefits might be.

HHCN: Are there certain goals that the two of you have put forth that you really want to meet?

Cox: The first thing is that wherever there is a campus for Chamberlain and in the same vicinity, a BrightStar location, we want to ensure that we have an ongoing pipeline of students that take this course and then choose to spend time, that 96 hours, in home care.

That, to me, is really the basic goal, and then the other things follow it. Are those that come better prepared? Do they stay past the first year, and are they thriving? Are they enjoying what they’re doing?

I think that’s number one. Number two is to increase the number of nurses who are in home care, but more importantly, I think with the social determinants, with our move to value-based care, is that more nurses, in general, will understand what home care does and what home care can offer somebody that they’re working with.

HHCN: We do have a question in the chat. Do graduates get placement at a BrightStar location?

Cox: We work first with BrightStar, but we also have some other organizations that they work with, and, they do get placement. So far, we haven’t had a problem with that, but we’ve just started the home care part of this program. It was not a problem in the perioperative area. They get that placement and then it’s up to the organization whether they want to hire them or not.

HHCN: Then, Shelly, what are you hoping to get out of the program?

Sun: I think we got to crawl, walk, run. I think we’re trying to make sure that we have the curriculum that meets the expectations, and we establish ourselves as a great partner to Chamberlain as they get feedback in the classroom.

Then, as we think about those that are signing up to do their 96 hours, that we are able to match them with our BrightStar Care offices, with registered nurses, that they’re going to be able to spend time with them. And we’ve really thought through thoroughly, not just 96 hours, but 96 hours that are really giving them great exposure as a day in the life, so that they can go through supervisory visits, assessments, a care plan. How do we look for change in condition? What is the data capture that is critical to be able to get out ahead of and look for evidence-based care protocols based upon diagnoses that are going to improve care and make us a valuable member of the care continuum?

I think our short-term goal is making sure we’re a great partner, making sure that we’re able to offer meaningful, impactful practicums for those that are signing up for them and staying out ahead of that.

Then, if we’ve done that and done a great job, that we’re able to select and retain those that are exposed to our brand through both the co-branding in the classroom. That there’s an increase in this pool of nurses that we’re going to need over the next three to seven years to meet our growing demand.

HHCN: Another question from the audience, I think this is an interesting one. From a personal home care perspective especially, do either of you hope this will shift the perspective that home care is non-clinical care only?

Cox: Absolutely. There’s an opportunity for us to say, “Here’s what you would go through in that program. Here are some of the things that you’re going to see. Here are the opportunities that you’re going to have after you go through this course.”

The other thing that we’re starting to do more of is in our community health rotation, and it is to send students to home care agencies as part of that because then, that’s yet one other exposure. They may want to work in pediatrics, and that’s it, but they then know what it’s like in home care.

Sun: I think this is an opportunity to change that position of nursing students. I think there’s a broader context of those that still see home care as potentially non-clinical. I think for a large amount of the industry that is not Medicare Home Health, that still is true because they largely don’t have nurses day in, day out. I think it’s hard to look at home care as a one size fits all.

If you don’t have dedicated RN directors of nursing that are overseeing things from the start of admission, and identifying if there’s been a change of condition, to me, you are not really operating at the level where you are delivering high-quality clinical care.

Obviously, I’m in the franchisor space of non-medical and medical. I think a lot of the industry is still non-clinical because they might have an RN that they pay per diem to do an assessment, and that nurse is never part of the care oversight and care management.

It’s hard to say you’re offering a really high-quality ongoing clinical care model if there’s not a nurse part of the ongoing equation. Our model does and has always had a nurse as part of the entire care journey. That’s why we volunteer to be Joint Commission accredited, and I think ultimately why we had the honor to be selected by Chamberlain to be their partner.

HHCN: What are your thoughts on ultimately scaling this program?

Cox: Well, first of all, we’ve scaled it for perioperative. We’re scaling it for home care. The next thing that we will do is develop a toolkit for other schools of nursing. If this never goes to any other school of nursing, we’ve not been successful. We want others to engage in this, but we know that because of our scale, we can do that.

We don’t want them to look at what’s required to do this and say, “Well, I don’t have time to do that,” but really put together a toolkit and be a resource to them to say, “Here’s how you can do it.”

They may not have the volume. But there are about 1000 schools of nursing that grant the BSN degree in the country. If you even had 200 of those granting the BSN degree involved in this program, the impact would be amazing.

HHCN: I do want to ask another question from the audience. They’re curious, how many students have come to BrightStar to complete the 96 hours thus far?

Sun: It wouldn’t be applicable yet because they have to go through the coursework. They have to go and pass that, and then they have to raise their hand and say that they want to continue on to the 96-hour program, the practicum. Right now, we’re working in lockstep as the classroom experience is starting in I think seven different campuses. We are also building out what the 96 hours look like because we don’t want to just put it to a franchisee office, or a company-owned office across the BrightStar network and have different nurses get different experiences.

How many living room visits should they be in, how many different types of patient populations, pediatric, adult, geriatric, different types of complexity of the geriatric care, whether Medicare Advantage is involved or not, all the different types of assessments that need to be done.

Going through all of those in supervisory visits, wound care infusion, we really want it to touch on a lot of different things that they would be exposed to on a typical day in, day out basis. As soon as the program ends, then we will be ready for the 96 hours of practicum for the students that are electing to participate.

Cox: We start this every three months. We have eight-week sessions. One session, they’ll be doing the didactic, then they’ll do the clinical, but this is ongoing. As we’ve said, the first rotation of students is really going to be important because they’re going to go right back to their friends and colleagues in the program and say this was a great experience or it wasn’t. The other piece that we’re working on are the preceptors. In home care, because there haven’t been a lot of new graduates, they’re not used to what students are like. You work in home care because you like to be independent on one level, and you work with a team on another level, but you’re not used to having someone by your side all day long. Making sure that preceptors know this is how they’re going to get more colleagues and have more support just in general is important.

Sun: And to set their expectations, just like we’re trying to set appropriate expectations of those that we might want to enter the home care workforce. We’re not trying to get people to join just to leave six months later. Same thing. I think we’re trying to be very intentional about what are the skills, personality traits, and expectations of preceptors so that we get a good match between them and the students going through the practicum.

HHCN: Fantastic. We’re running up on time here, but Karen or Shelly, anything else to add, last thoughts on the program, or a call to action?

Cox: I’m just excited by the partnership and by improving both the image of home care and the pipeline of clinical nurses going into home care. I think in terms of a call to action, I think nursing programs, schools of nursing need to find a way. This is no longer just a fringe piece of care.

Sun: I will echo the partnership. I think many talk about the labor shortage and the impact it’s having. I think it takes special organizations like Adtalem, with Chamberlain nursing schools, to be able to say, “We’re going to do something about it. We’re going to go get a grant, we’re going to put in the work, we’re going to find a good partner.” It’s been an honor for BrightStar and our clinical team to be a part of something that hopefully has impacts for decades to come through Karen’s vision and leadership. I couldn’t be happier to see our brand co-branded with a very well-recognized and respected name like Chamberlain.

HHCN: Karen and Shelly, thank you so much.

The post How BrightStar Care, Chamberlain University Are Building The Next Generation Of Home-Based Care Workers appeared first on Home Health Care News.

In the broader at-home care space, Dr. Michael Le is considered an innovator.

As the co-founder and former chief medical officer of Landmark Health, he was integral in helping build a company that would eventually catch the eye of UnitedHealth Group’s (NYSE: UNH) Optum.

His impressive resume — which also includes time at Optum Home & Community Care and CareMore Health Plan — places him at the forefront of the movement bringing more care to the home and the community. It all started with, in Le’s words, the image of “the revered small-town doc with his black doctor’s bag doing house calls.”

Now, Le is on to his next chapter. Last month, he joined WelbeHealth as its chief medical officer.

WelbeHealth is a Program of All-Inclusive Care for the Elderly (PACE) operator that launched in 2015. The organization delivers services to its PACE members across California, including in the cities of Stockton, Modesto, Pasadena, Long Beach, Fresno and more.

Le is excited about the PACE model’s ability to improve health outcomes and lower costs through preventative care.

Home Health Care News recently caught up with Le for the latest episode of TALKS.

During the conversation, Le also touched on other care delivery models he finds interesting, and the importance of collaborations between PACE organizations and home-based care providers.

HHCN: I’m really excited that you could make it for TALKS because you’ve had such a distinguished career in health care, particularly around the home- and community-based setting. You were the CMO of Optum Home & Community Care, and before that, you helped build Landmark Health. Can you talk a little bit about these experiences?

Le: I’m very excited to share a bit of my experiences and also the WelbeHealth story. I was the co-founder and chief medical officer at Landmark, which we started about 10 years ago with the premise that the sickest and frailest population, they really struggled to get into the medical office, and they really needed around-the-clock care. Our solution at that time was to create a completely mobile physician-led interdisciplinary medical group that brought intensive house calls to patients 24/7, in the comfort of their homes.

Now, it’s very robust, and obviously, an expensive model with fully employed docs, nurse practitioners, psychiatrists, social workers, nurses, pharmacists, dieticians and navigators. We could only cover that cost through value-based contracting and taking total cost of care risk on the population, so that we could really staff and man the teams from day one to take care of the sickest patients. Fortunately, we had tremendous results and grew from just the four founders, and an idea, to being responsible for about 250,000 patients and about $2.5 billion in revenue across 20 states by 2021. By that time, we became the largest risk-bearing in-home medical care provider in the country.

Of course, that brings us up to the pandemic. Now, these very sick patients, they couldn’t even get into the offices. Our Landmark providers were able to go into the homes with full PPE to get them the care they needed, to help keep them out of ERs, which could potentially have been very deadly and catastrophic to them. That ability to care for patients in the homes at all times, and in all conditions, really got the attention of UnitedHealthcare and Optum, which then acquired Landmark in 2021 and used it as a platform for everything at home — naviHealth, Prospero, Optum at home, the institutional special needs, their in-home assessments program — all came under this platform. Happy to say it continued to grow to this year where now it’s about 16,000 employees covering almost a million patient lives across 39 states. I was the founding CMO for Optum, their home and community care. It’s great to see this growth and interest in bringing care to the home. I love the expansion nationally, but then I really felt much more at home in a smaller, nimble company where I could feel I could make even more difference.

I left Optum in March of this year for many different reasons, but especially the culture and the patient population we serve ended up here at WelbeHealth. Very happy to be here and just serving the most frail and complex patients and trying to give them the services that many times through their lives they probably have not received, but are in desperate need of.

You also led value-based care at CareMore Health Plan and Healthcare Partners, correct?

Le: Yes. I started my career at Healthcare Partners as a hospitalist, which was a capitated medical group here in Southern California. I worked in the ER and hospitals and witnessed the end result of this fragmentation and uncoordinated care that was failing our patients, and so it started to give me a picture of the gaps in the access to care and what needed to be done to help fill that.

I was there for 10 years and then was recruited to CareMore where I ran their high-risk programs, high-risk clinics, social SWAT team, case management, palliative care, hospice care, but also my pet program, the HouseCalls program, which was a bit of a model for the founding of Landmark. Both were premier organizations in the value-based care arena and really helped to mold a lot of my thinking on how to deliver innovative, high-quality, but really cost-effective care.

Thank you for walking us through your background a little bit there. We’ll get to WelbeHealth in just a second, but I am curious, did you always have this clear interest in home- and community-based care models, or did you gradually get into these areas?

Le: I actually have an interesting backstory to your question. I actually grew up in small town in Western Massachusetts and watched my dad, who is a primary care doc, do house calls when patients just couldn’t make it into his office. Really that vision of the revered small-town doc with his black doctor’s bag doing house calls was what attracted me to medicine in the first place. By the time I finished medical school and residency, I thought those Marcus Welby days of the house calls were long gone.

Again, I initially started work as a hospitalist, but as I kept seeing patients revolve back and forth in and out of the hospital, it just didn’t make sense. I thought, what the heck? Why don’t I just go see them in their homes? Obviously, it’s very eye-opening seeing patients in the home versus a 15-minute office appointment. You see the hoarding, the fall risk, the lack of social support, the empty fridges, and the true root causes of why they couldn’t stay out of the hospital. Then it makes sense you address those, and they become better.

Ever since then, it’s been my passion that instead of making a very sick and frail patient come to the system, let’s bring the system, the teams, the procedures to patients where they’re at in the comfort of their home and do it 24/7. Actually, just as a bit of a rewarding aside to me, Landmark ultimately expanded to Massachusetts, and we had three patients in that same small town that I grew up in. Very much coming back full circle for me to be able to provide that same care in the same communities I watched my dad serve just decades ago. That’s how I got into home and community care. That’s what keeps me here. That vision of bringing back that care from that golden era in some ways of medicine.

That has to be really cool getting to take it home. We’ve obviously seen home- and community-based care take on a bigger role in the broader health care continuum since 2020. What’s your take on that? I’m guessing that’s something you find exciting and long overdue.

Le: Absolutely, and so glad you asked about that. We’ve already seen a trend of so many services outside of health care being brought to the convenience of the home. The pandemic just accelerated that movement within health care. I think policymakers, the health care industries, cities, and communities across the country are realizing that we’re truly facing this rapidly growing elderly population — silver tsunami as they say. They don’t want to be treated in a nursing home. They want to reside in the comfort of their homes as independently as possible.

Remember, PACE has been around for a long time. It started in the 70s. I think there’s finally this appetite to invest in and dramatically scale community-based care at home for seniors. It’s certainly exciting to see, and I think it’s very much long overdue. I think we still have states without PACE programs, and that’s got to change. Thankfully, with robust support from the federal level and then drawing momentum of research and state and community commitments to PACE, we’re having this conversation at a really pivotal time.

I know that the vast majority of older adults want to age in place. Not only that, but we know that the care in the home is less costly than traditional nursing home care, and so the pandemic just accelerated all this. We’re happy to say that during the pandemic, the PACE programs and Welbe in particular had dramatic impacts in terms of saving lives, reducing mortality rates. We’re happy to be a leader and helping to drive some of those better outcomes for the sickest and frailest population.

Why WelbeHealth, and why did you want to work in the PACE space?

Le: In reality, I did have a lot of options and I wanted to be very selective in terms of what I wanted to do. As I mentioned before, I was searching for a smaller, more nimble growth organization that was really lined up with my passion for serving the most vulnerable and underserved populations.

I knew from my previous experiences just how crucially important culture and mission is to the success of organizations. I was aware of PACE long before, and quite frankly, I was a bit envious of all the additional services and resources that we just couldn’t provide through our traditional Medicare Advantage risk contracts like adult day services, dental, vision, meals, transportation, home health, physical therapy, all these things that I would’ve loved to provide for my patients previously, there are great resources in the PACE space.

Also, I knew some prior coworkers who had come to Welbe and talked to them and just became more intrigued the more that I learned. Really what sealed the deal was coming into these beautiful care centers and seeing such needing and deserving patients all being cared for by such passionate and mission-driven employees. The culture and the commitment was just so strong.

As I did more research, Welbe has shown some of the most impressive success during the pandemic in terms of their outcomes and really life-saving results for the PACE model. Welbe just had such a great reputation in the industry. Then, once I met the team and experienced the culture, it was not a difficult decision at all to bring my experiences here and join, and it just felt like home. It felt natural and comfortable.

You stepped into the CMO role in May. What are your short-term goals for WelbeHealth and what are some of your long-term goals for the organization?

Le: Let me start with the long-term vision first, and then I’ll get down to what I’m trying to look at in the short-term. Our ultimate long-term vision, it stretches even beyond PACE. It’s how do we redefine the health care service paradigm for seniors, just plain and simple. Right now, just nursing homes are serving a much larger percentage of the population than it actually needs to, and it’s not financially viable for many adults. As for nursing homes, the outcomes just are not as good in many instances.

PACE is rapidly growing right now, and long-term, we want Welbe to be leading that innovation and helping to drive PACE and deliver PACE to more and more patients in more and more communities. We’ve steadily grown over the past five years here in California, and we’re continuing that growth and looking to serve more cities and communities I think more broadly.

Now, in the short-term, I think I’m looking at the clinical model and really looking to see where we can optimize and standardize because I think there’s a lot of great things and great pockets that are going on, but how do we take all of the best practices at the different centers, drive towards that consistency of what we’ve established as those evidence-based best practices and really hold the programs accountable to the highest standards of clinical excellence and compliance and quality?

We’re really helping get all those sorts of tools to our providers so they can consistently provide the best-in-class care to our participants.

At the start of June, WelbeHealth announced that it was opening two new locations in Southern California. Talk a little bit about this, and does the company have further plans to expand its footprint?

Le: WelbeHealth already operates centers in Pasadena and Long Beach here in Southern California. We’re looking to open two new locations in Rosemead and North Hollywood in Los Angeles County. Both these locations are home to highly diverse populations, including thousands of seniors who would be eligible for PACE that currently don’t have a great wealth of provider options to choose from. We’re currently enrolling new members in Rosemead and North Hollywood and looking to start offering services come July 1st. I’m very involved in helping to launch those markets.

I also wanted to add that these new locations, as I walk in them, they’re so thoughtfully designed with contemporary spaces that really inspire an environment where our participants can just get mentally rejuvenated while receiving the highest quality medical care. They have featured outdoor social spaces, garden walls, hair salons, laundry rooms, really to get a bit of respite from some of the loneliness and the limited access to personal care that many lower-income individuals experience.

To really meet the needs of our participants, WelbeHealth has employed very multilingual staff across many, many positions and have culturally-appropriate meal menus, activities, and other services to really give the best service for our local communities. The reception’s just been tremendous. The communities have been so excited. I think it just really underscores just how underserved and how much pent-up demand there is for these PACE services.

While I think growth and expansion is exciting, clinical quality is really our first and foremost goal. There have been times in the past when WelbeHealth has intentionally held back on growth if we didn’t feel like all the components of the model were fully hired and trained, and to ensure that we’ve provided the best and highest quality care. Yes, absolutely excited to think about the potential growth, but quality and making sure that we deliver the best possible care is always the first cornerstone.

It’s not just WelbeHealth that’s expanding, the PACE concept is beginning to expand into more markets as well. What do you expect this space, this market to look like in five years, for example? Will there be PACE in every city, every state?

Le: There absolutely should be. PACE should be in every state. It’s a model that works. The data really supports this. We just need to invest in it, commit to it, and really embark on a very broad-based public educational campaign, so that more and more seniors and their caregivers know that this is an option for them. The program’s been around since the 70s and currently it serves about 60,000 people nationally today. The growth for many decades has been slow, but I really do sense that we’re at a bit of an inflection point. It’s starting to change in a major way, and there’s this exponential momentum to grow, and especially in states like California.

In California alone, the number of PACE centers has more than doubled in the past five years and enrollment has tripled. The pandemic, like I said, has certainly accelerated a lot of this growth, but we want to maintain it. We want to be able to nurture it and continue to build on it. WelbeHealth is certainly considering opportunities to serve more seniors in California and beyond because I think there’s so much need and the need out there is so immense. We remain very active in California, as does the National PACE Association, to try to continue to be leaders in advocating for the expansion of PACE.

I would hope that five years from now, PACE or PACE-like models would be almost considered the standard of care for a very sick and frail individuals with significant functional challenges, as the solution to help them remain as safe and as independent as possible in the comfort of their homes surrounded by their loved ones.

Speaking of keeping seniors safe, one of the things that put PACE on the map as a care model was its ability to keep seniors alive and safe during the height of the pandemic, especially compared to nursing homes. WelbeHealth was a big part of this conversation. The National PACE COVID-19 death rate was 3.8%, compared to 11.8% in nursing homes and WelbeHealth’s COVID-19 death rate was 2.4%. Can you talk about some of the care delivery advantages of the PACE model?

Le: Obviously those are results that we’re super proud of. First, I’d say that PACE improves health outcomes. There’s a 24% lower hospitalization rate amongst PACE members compared to dually eligible beneficiaries who receive their care in nursing homes. People receiving care through PACE programs are also less likely to be readmitted to the hospital or suffer emergency room visits. All of this significantly reduces the likelihood of being admitted to a nursing home and all the complications that arise from being in a health care setting unnecessarily.

Secondly, I think PACE participants receive better preventative care with the capitated model that PACE has, and it really aligns the incentives to provide very preventive care and to be as innovative and efficient as possible with patient care. With respect to hearing, vision, depression, and palliative screenings, we do all that and provide nutrition, flu shots, vaccinations — all these things to really catch things early and prevent all the downstream complications.

Also, because the model is so high-touch and there’s so many different team members seeing the participants, any one of them can identify, ‘Oh, something’s a little bit off,’ and then we can investigate and we can treat conditions early and prevent exacerbations and complications downstream. Also, I think that there’s a lot of caregiver satisfaction. It’s so hard being a caregiver for a loved one who has a lot of dependencies. We found that 96% of family members are satisfied with the support that they received through PACE and 97.5% of caregivers would recommend PACE to someone in a similar situation. We are this 24/7 lifeline for caregivers, and it significantly reduces that burden and burnout that they experience.

Another one is that PACE participants are less likely to suffer depression. Studies have shown that 27% of new PACE enrollees when screened scored as depressed on initial assessments before enrollment. Now, fast forward nine months and 80% of those individuals no longer report being depressed, likely because they’re receiving the care that they may have never had in the community before and we’ve reduced a lot of the stressors that they have.

I’d say lastly, the participant satisfaction is tremendous. Participants rated their satisfaction with PACE as 4.1 out of 5. We know that in health care the satisfaction can be very low. This is tremendous. The disenrollment rate for PACE is 5% less than the Medicare Advantage plans. This is even more impressive when you consider that our population, a large majority, is Medicaid eligible and there’s much more churn in the Medicaid population compared to the MA. I think being able to have that high retention and that very high-touch model and being especially there when you need it for them is so important.

My view is essentially what we’re providing for our patients, it’s concierge-level care, but not for those who can afford it, but it’s actually those patients who really have the least resources and actually really need this model the most.

You’re obviously the CMO and this is more of a business question, but what do the financials around PACE look like? How stable is the reimbursement environment, and are PACE operators struggling to stay afloat like nursing homes or home health agencies, or other senior care organizations?

Le: Happy to delve into a non-clinical question there. First, I’ll just say that PACE overall delivers exceptional outcomes at a lower cost to seniors, and that’s part of the reason it’s exciting to see the model scale. In addition to bringing these tremendous patient care outcomes, costs have been impressively lower. PACE saves around $10,000 per patient, per year, according to a 2022 study from the Bipartisan Policy Center. PACE organizations, overall, save the government and taxpayers an estimated hundred million dollars.

That said, the programs have been, in the past, limited in terms of their growth due to the capital necessary to build out these centers and deliver the comprehensive services. It costs millions and millions of dollars to open a PACE center. I think at WelbeHealth, we’re a bit unique, and I think we’ve been fortunate that as a public benefit company, we’re navigating this challenge with a business approach that ensures that we have the capital necessary to really deliver on the mission.

I’ll also say that having come from a lot of organizations that have been investor-backed, we’re fortunate to have investors that are very much mission-aligned to what we do and they’re playing a long game. They understand that it takes time to really change the trajectory and the cost of care, and it takes time to transform health care delivery in communities. They’re all in on very thoughtful investments in terms of the infrastructure, the teams, the technology to really scale the model and drive lasting long-term results many years down the road and not just what quarterly financials look like.

These investments I think have allowed us to be creative and really develop innovative systems, technologies, and processes that are dedicated and laser-focused on the PACE space and the PACE model, as opposed to if we were part of a bigger system where we’d have to compromise or where we might be just a bit smaller afterthought as part of a larger system, but we are able to make these investments in exactly to what we need in exactly what the PACE space needs.

In your view, how does the PACE model fit into the broader shift towards value-based care?

Le: I feel very strongly about this. The health care providers and organizations should be assessed based upon the quality of the care that they deliver and their health outcomes. The model of getting paid per nursing home bed that you fill, heads in beds, or the volume of services provided is a totally broken fee-for-service system. I think that most people are starting to recognize that. The industry is recognizing that, but change is always a bit slower than common sense and the recognition of it.

I think the pandemic really did shine that spotlight on the need for – and really the benefit of – at-home services for older adults. Also, more importantly, our population is growing older and there’s this growing recognition amongst the government industry leaders that we need to scale solutions that are targeted specifically for their needs. One size does not fit all, and we need to really curate models that are tailored to the specific needs and challenges of the older population.

Research has shown that PACE is one of the very highly effective solutions that we have at our disposal to meet the needs of the 77,000 aging baby boomers that we have in our country. Over the last several years, the Biden administration has taken steps to really pick up where the Obama administration left off, essentially, which is continuing to invest further into PACE. The home-based care models are more efficient and very cost-effective at keeping the elderly patients healthier and happier than institutional care settings. I think the value-based approach is exactly what PACE was built upon.

What are some of the main ways PACE providers should be collaborating with home-based care organizations to help keep seniors healthy? Are there natural collaborations for Medicare-certified home health agencies, or private pay home care providers? What’s your view on this?

Le: I’m excited to be a bit of a liaison between PACE and some of the home-based care experiences I’ve had in the past. PACE certainly does have some elements of home care, but we need to expand it more. Especially when I think about times when we’re launching new markets or when our membership is small in the early days of markets, you could actually burn out providers just with the call burning and things like that of having to be on call or do urgent visits and other things like that.

I see that there’s ways of collaborating with home health or care providers. Especially in that way of, can we partner so that maybe for after-hours, or maybe for weekend coverage, if we need someone seen and we need services delivered, we can partner with those entities to provide that around-the-clock care? Or, procedures that can really help to stabilize some of the patients in place so they don’t have to end up in urgent cares or ERs or hospitals?

When you first joined WelbeHealth, you said: “Revolutionizing how we care for the most vulnerable in our diverse communities is what inspires and motivates me.” What are some of the ways the company is working to innovate PACE care delivery models?

Le: WelbeHealth’s purpose and values really define us. That’s why last June, Welbe amended our certificate of formation and became the first, and the only, public benefits company in PACE, formalizing this commitment to weighing the interest of all stakeholders, including our providers, including participants, including employees alongside with our shareholders. Changing the company status really means holding ourselves to a higher standard of transparency and accountability. That really resonated with me. The health care system has given consumers too many reasons to distrust and be skeptical of it.

We really do believe that PACE programs should set this very high standard for clinical care and compliance excellence. We’ve been intentional about prioritizing both as we continue to expand and really consider some of the future opportunities. We’re very motivated in terms of being able to improve the care of the most vulnerable, really helping to create opportunities and jobs where team members who are passionate can find that outlet to be able to do their mission-driven work.

It’s about really being able to enrich and improve the health care delivery system in the communities that we’re touching, really to help our patients live longer with much higher quality of life and great satisfaction.

Again, looking at your background, you have such a great understanding of home- and community-based care trends. Apart from PACE, is there a care delivery model that you find fascinating, and why?

Le: Yes, as a former hospitalist, I’ll say that I’ve always closely followed hospital at home. I think it provides great services for the patients that actually qualify for the services and whom they touch. It too, similar to PACE, has had challenges in scaling and growing, but I do think that it’s starting to change and gaining momentum in terms of growing and expanding also.

From a problem-solving brain, there’s a lot of logistical and operational challenges and issues that I’m very intrigued by in terms of how you solve some of these challenges to get the care to patients. You can certainly see a lot of the similarities and parallels between hospital at home and PACE. I think we’ve definitely started on that upward trend of growth and momentum. Because I’m a big fan of the model, I’m hoping that hospital at home also has that inflection point.

I’ll also say that, just very excited to see home health becoming much more of a key vertical in integrated delivery systems. Optum had already purchased LHC while I was there and now the news of them making a bid for Amedisys, it just really shows just how much interest there is, and frankly, acknowledgment of the important role that home health is going to be playing in the value-based arena in the future. Certainly exciting for the home health industry, and I’ll be watching very eagerly to see how it all plays out.

Yes, that is certainly some big news, and HHCN will also be watching and covering, so look out for that coverage. Before we wrap up this episode of TALKS, I wanted to ask what else is important to bring up? What else do you want to say or talk about?

Le: We’ve covered so much, and I think in closing, I just want to underscore just how exciting this moment really is for those of us who are really invested in PACE and are in terms of reinventing the nursing home industry. PACE has unprecedented political and industry support right now like never before, and companies like WelbeHealth are charting a genuinely new and effective approach to very high-needs markets for delivering holistic care to seniors facing complex medical, social, behavioral challenges.

Looking ahead, I’m just very excited to see PACE grow nationally and for Welbe to continue to be a driving leader and advocate for that path forward.

The post WelbeHealth’s Michael Le On The Future Of Innovative At-Home Care Models appeared first on Home Health Care News.

In Kevin Porter’s view, home care was once the little kid on the basketball court hoping that his older brother and his friends would just throw the ball his way.

But now home care is all grown up. And it’s in a perfect position to play ball, to help health plan and health system partners care for patients with conditions such as COPD and CHF.

In fact, those are the patients that Porter considers perfect clients for Executive Home Care, where he serves as brand president.

“They’re still this active senior, who’s trying to be out in the community, trying to be active in their home, but just due to their diagnosis, they need a little help,” he told Home Health Care News during the latest episode of TALKS.

During the conversation, Porter also touched on the formation of Evive Brands – Executive Home Care’s parent company – the elasticity of the home care market, diversifying revenue streams and much more.

HHCN: Just for our audience, if they’re not familiar with you, Kevin, do you mind giving a quick background on yourself and an overview of your experiences?

Porter: I’ve been in the home care space since 2008 working for three major organizations at this point, supporting franchisees across the country. Started off in the field support role, then moved into a more strategic role supporting, again, home care operators across the country growing their businesses and providing care for seniors in their communities.

HHCN: You were named the brand president in February. Previously, you were the SVP of operations. What has that transition been like?

Porter: A very seamless transition, really smooth. Got the opportunity to come in and connect with the operators at Executive Home Care. We changed our name. We were Executive Care, prior to my joining the team, and the organization and the executives felt like, “Hey, we need to really embrace the home concept.” We changed our name.

Got the opportunity to meet the owners across the country and fantastic operators. When I got the opportunity to be promoted, I just kind of moved from the passenger seat over to the driver’s seat after getting gas at the rest stop. It was really seamless, but a great opportunity.

HHCN: Kevin, since February, what have been your top priorities?

Porter: Yes, top priority since February is really coming in and establishing a strong foundation for the network. There were some loopholes, there were some open gaps, there were some potholes. If you’re from the Midwest, you know what a pothole is. There were opportunities for us to partner with some really powerful players in the market.

We’ve been strengthening our partnerships to help our operators with their day-to-day operations. All of them have been tremendously beneficial for the network. We made an adjustment over to the WellSky ClearCare platform at the end of 2022, which was fantastic.

We also then made some adjustments to working with some local SEO organizations such as Choice Local, partnering with them. Those have been the top priorities, really to establish the operational elements. The next thing that we’re working on is protecting, providing services and resources for our operators to strengthen their retention rates across the country, and to continue recruiting more, and continuing to support their caregiver population. They’re essential workers, they’re vital to the success of our organization and this industry. Those have been some of our priorities to really strengthen our organization for growth, and prepare for our future growth.

HHCN: I assume when you’re choosing those partners, technology partner or otherwise, that can be a stressful process. I imagine it’s a relief to get some of that implementation in the rear view.

Porter: It’s one of those things where you don’t appreciate the journey until it’s complete. There was an adjustment phase for the network to switch over to a different platform. Once that adjustment and transition had been made, all of the operators were tremendously happy with the adjustment.

HHCN: Just before we go any further can you explain all the services you deliver, all the locations that you have, and what the footprint looks like?

Porter: We are a personal care, companion care organization. We are located in 12 states across the country right now. Our focus is growth. We have a tremendous growth opportunity. We provide care for about 1,500 clients across the country at this stage of our existence, and are looking to continue to grow.

We’re in the Northeast, we’re in the Southeast, and we’re actually in what I would call mid-Atlantic area, the Virginia area. But we’ve just expanded out into Colorado, and we’re excited about that opportunity as well.

HHCN: You mentioned that entrance into Colorado. Are there specific geographic areas that you really want to attack, in terms of growth over the next year?

Porter: We’re open to every option. As a franchise network, it’s always fantastic to have as many flags as you possibly can. We’re looking at the major markets and the mid-markets as well. Metropolitan USA is on our radar, as well as Suburbia America. Again, as we continue to strategize on where we’d love to be, we’d love to make our way from the East to the West, but the opportunities of growing within the Texas market are tremendous.

Wonderful state down there for home care opportunities, and the population can benefit from an additional home care provider in that area. Again, we’re open, but we do have a strategy to move from East to West so that we can continue to provide quality care for our clients across the country.

HHCN: Based on all the experience that you do have, what do you feel like are the two or three trends that are really shaping home care right now? Are those the same as they have been for a long time, or have they changed of late?

Porter: I think every executive in this home care space will talk about the infusion or engagement with technology in the home. That’s a no-brainer. It’s just finding the perfect opportunity to make it work. There’s some fantastic organizations out there that have tremendous technology.

I think every one of the executives across the country are looking at how to infuse more technology into their business. I think the other thing is just having solidified data. As you and I have talked about in the past, how does home care align with the major health care systems of America? In order to do that, those individuals want to see what we bring to the table. Data collection and data integrity is truly important.

Finally, from my perspective, we are really interested in making sure that we take care of our caregivers, those individuals that work for us on a daily basis. Investing into their education, working on establishing growth opportunities for them within our organization. Some individuals come into this, and they become a caregiver, and they want to go and be a registered nurse, and they want to go and practice at another level.

We are encouraging that, we’re excited about that, because we know that their foundation will come from our organization. We’ve partnered with CareAcademy, which has an opportunity to provide additional education towards your RN degree. We understand that this is an opportunity to support caregivers. Those essential workers, they want a career, and they have a career, and sometimes they want more, and so we want to be able to be there for them when that time comes.

HHCN: A couple follow ups on that. First of all, I wrote up a story yesterday on HCP’s recent data. The turnover rate has gone up again. It’s been a problem in home care for a while, but seems to be, again, becoming more of a problem. Two of the things that you mentioned, training and career opportunities, and that recognition, those seem to be the biggest things that keep caregivers with your organization.

That seems like something you’re focused on. I am curious: Have you seen turnover tick up again, or has that been better across the organization of late?

Porter: I could say, yes, I’ve seen some positive trends, and then next week I’ll tell you, we lost the game when it comes to recruiting. It’s probably just as volatile as the Dow Jones at this point in time. We are seeing a tremendous opportunity, at least, from my vantage point, on applications and interviews.

We got to at least get them into the office for an interview. If we can at least engage in an interview with them, we have a good opportunity to get them employed, get them scheduled and working in a client’s home. Hopefully, if they stay with us, 90 days to 120 days, we may have a lifetime caregiver.

Then, we see a couple of months in a row, where we’re just losing caregivers to other opportunities. Availability is always a struggle and a challenge. We have to work through that. You have to strategize on making sure that you meet the caregivers where they want to be met.

If you say, “Hey, I got 30 hours a week that I want to give to you,” and I only schedule you for 20, you’re looking for that other 10. Caregivers in this industry work from shift to shift. Let’s just be honest. If they don’t work, they don’t get paid. It’s our responsibility as executives, and owner-operators to ensure that they have hours that fit their availability. It’s a puzzle piece. It’s a Rubik’s cube that we’re trying to maneuver on a regular basis. The operators that take the initiative to learn their caregiver population, understand their availability, understand their constraints, their personal and professional situation, I think those individuals are the ones that have a really good hold on their retention, and have a positive impact on retention.

HHCN: You mentioned the application process. Have you noticed that speed is really paramount in today’s environment, where you need to make sure that you’re following up quickly?

Porter: If you don’t have Usain Bolt or Carl Lewis on your team, you are not going to win the race. This is a competitive industry for caregivers, but we can lose our caregivers to another industry. We can lose our caregivers to Amazon, Walmart or Target, because of the minimum wages and the opportunities that other industries offer. It is paramount that you are, hopefully, the first person to respond.

There are solutions out there, we partake in them just like some of the other agencies do. We’re answering our phones 24/7 when it comes to potential caregiver opportunities for employment. You have to be there. If you don’t answer within two minutes, you might lose them.

HHCN: Going back to another one of the trends that you mentioned, that data piece. I assume data tracking has become far more popular in home care since you’ve been around. Are there any key metrics you can share? Things that you’ve really noticed pay off when you’re tracking them?

Porter: Well, I think when I first started in 2008, I had a mentor always telling me, “Data’s going to be king, data’s going to be king.” Then you realize that the platform systems were not set up to track the data that you needed. You tried to elaborate, you tried to abbreviate, you tried to make up stuff, basically.

Length of stay was always one. From my perspective, my vantage point, I think we have to be more cognizant of the disease states that are not only beneficial to the home care space, but then the disease states that require a lot of hands-on attention from a caregiver – COPD, Alzheimer’s, congestive heart failure, those diagnoses are paramount.

They’re really the sweet spot, or a really great client to have, because there’s still this active senior, who’s trying to be out in the community, trying to be active in their home, but just due to their diagnosis, they need a little help. With medication, they can, not necessarily obviously cure congestive heart failure or COPD, but they can have an excellent quality of life with a caregiver by their side.

One of the things that we’re trying to do here at Executive Home Care is just making sure that we are approaching the medical community to let them know what we’re able to do from a COPD, CHF, Alzheimer’s perspective. I think that’s an industry standard. We have been on our WellSky platform for six months, so do we have tremendous information to share about a major impact? No, not at this time.

We are working towards that goal because I think the health care systems, the doctors at home, they want to know how can you support these clients. Because these are clients that will be in need of services for an extended period of time, and they want to have a dedicated organization to meet their needs.

HHCN: That last sentence is a great jumping-off point to another thing I’m super curious about, in terms of the brands in Executive Home Care. You have all these senior-focused organizations that you’re now able to work with underneath the same umbrella. I think that’s really interesting because, obviously, you’re trying to help the seniors with their life at large. It’s not just about specific care. Can you explain the thought process behind that, and how that’s helped so far, or how you think it’s going to help in the future?

Porter: You’re referencing Evive Brands. Evive Brands is now the umbrella organization that oversees Executive Home Care, Assisted Living Locators and Grasons. Each one of our organizations can impact the quality of life of a senior at a different stage. We’re providing personal care, companion care in the home. Assisted Living Locators is that organization that can support a client, patient, family member when they want to relocate to an assisted living facility.

Grasons is an estate sales organization. If the family relocates mom or grandma to an assisted living facility, and they want to work with an organization to help them sell off the trinkets, or the things that mom just no longer needs, or help close down the house before the home is sold, then they can work with our partner, Grasons. That’s the vision of Evive Brands — to do our best from an oversight perspective to help a client, and meet the client where they may be, and that will be the future for the next organization that we bring under the umbrella.

It’s a really good partnership, and all of our organizations work well together. We have synergistic opportunities in marketplaces, so it’s been a real good partnership across the board.

HHCN: Switching gears here a little bit, Kevin. Last time we spoke, we were talking a little bit about home care’s value, and how you present that to some health plans. What has that been like? I know home care is more recognized by the general public now. It’s more recognized by even the Biden administration. The whole industry has been elevated to a certain extent. Has that been recognizable in plan negotiations, or talking to health plans about the value you can provide to their members?

Porter: Yes. I went through the pandemic, and as an organization, where we saw opportunities just springing up left and right. Some of them were tremendous opportunities, where, because of the pandemic, the health care system automatically start saying, “Wait, we can’t handle all of these clients coming into the hospital. We need to have resources in the home.”

I’ve seen organizations partnering with other organizations and providing the care in the home, which is spectacular. It’s what should be done, and what needs to be done. Here at EHC, we’re working on opportunities like that. You have to be able to present a solid front across the board, you have to be able to meet the expectation of, not only the health care system, but the partnering organization that you’re working for.

When you tap into those opportunities, that’s when Medicare funds are being provided. It’s a more stringent approach, it’s a more stringent payer source, and they have expectations that the home care space has now been able to elevate themselves up to. Yes, I believe that’s going to be the trend. It’s going to be the new wave of opportunities for health care systems to partner with companies like Medically Home, where they provide the care right there.

They’re basically bringing the hospital environment to the home, and monitoring the client 24 hours from a triage center, and then you have the ancillary organizations such as DME and skilled home health or hospice coming in, supporting the patient and the client where they are. It’s definitely cost effective. It’s definitely a safer environment. A lot of people want to be in their home. Why should we not give them the opportunity to have that option?

You’re almost like the shortest kid on the court saying, “throw me the ball, throw me the ball,” with all your big brothers and your friends from the neighborhood. Some of the smaller players have the most impact in the game. Right now, I think home health is growing. The home care space is growing. They’re recognizing that there are tremendous caregivers across the country. There’s some fantastic organizations providing care.

You just have to be in the right place at the right time, and they also have to know what you bring to the table. That’s why I think data is so important. If you can show what you bring to the table, how you’ve impacted a particular grouping of people, and then that those individuals are the ones that the health care system is most concerned about, the frequent fliers, COPD, CHF, Alzheimer’s, you can show the data and the impact that you bring to the partnership.

HHCN: Is there a sense that you want to diversify revenue streams at all moving forward?

Porter: You always want to diversify revenue streams. You don’t want to be stuck in one bucket versus another. When you diversify a revenue stream, and you make that initiative to working with the health care system, there are some positives that can occur. Then, there’s also some, I won’t say negatives, but some additional constraints that you have to adhere to.

A health system may not pay you for 30 to 45 days. In the personal care space, you’re invoicing sometimes weekly or biweekly. You don’t want to, obviously, jump head-first into some relationships. You just want to let them grow organically.

HHCN: We’re almost halfway through the year. What’s the biggest thing you’re focusing on for the rest of 2023? Is it that growth aspect?

Porter: That’s in ‘23, ‘24, ‘25, ‘26 … and so on. That’s always going to be our initiative. If that’s selling more franchise locations, increasing our population of clients that we provide care for, yes, that’s always happening. For the next six to nine months, my team and I are just really focusing on solidifying the culture of each one of our locations to the best of our ability, partnering with organizations that bring resources to our caregivers to help, again, with their quality of life.

Financial education, continued education, opportunities for them to utilize resources outside of the workplace — those are the things that we’re working on.

HHCN: What’s one under-the-radar challenge that you feel is not being talked about enough?

Porter: I think the one that really continues to knock on my door at night when I’m sleeping is, how much can we charge? What is the elasticity of the market across the country?

In some areas, they’re charging $50 an hour for home care, and in some areas they’re charging $30. Down South it might be $27, $28. The question is, how much more can we increase the hourly rate to accommodate the minimum wages that are out there? Then, no one truly pays minimum wage. When it comes to caregivers, they’re probably $3 to $5 more than minimum wage from a payment perspective.

It’s not flying under the radar, because I think every brand president thinks about it, and questions it on a daily basis. As we continue to provide care for clients and service people in our country, I think every day we’re wondering, “Is an extra 50 cents too much, is a dollar too much, and what’s our competitor charging?” I wonder when the bubble’s going to burst, or when we’re just going to hit our ceiling.

The post Evive Brands’ Executive Home Care Striving To Become ‘Usain Bolt’ Of The Staffing Race, Valuable Health System Partner appeared first on Home Health Care News.

While they may seem like outliers from the perspective of most providers in the country, publicly traded home health companies are often a great indicator of where the industry is – and where it’s going.

Whether they’re investing in new service lines or diversifying their revenue streams, the big providers on the block continue to change the home health industry at large.

Scott Fidel, an analyst at the private investment banking company Stephens, is part of a team that analyzes and evaluates those moves. He covers the post-acute space, as well as the managed care space.

Fidel sat down with Home Health Care News on the latest edition of HHCN+ Talks to discuss Medicare Advantage trends, financial stability, home-based care M&A and a lot more.

The transcription of that conversation is below.

HHCN: Before we get going, Scott, I do want to get your background and a background on your company.

Scott Fidel: I’ve been a sell-side equity research analyst covering the health care services sector on Wall Street for the past 24 years or so. I focused on health care services for pretty much my entire career on Wall Street. The way that we break down our coverage is we look at three primary subsectors.

First, and very relevant for this conversation, is the post-acute care space — including all of the home-based care areas. We cover most of the publicly traded home health companies. Then we also cover managed care. That’s a sector I’ve covered very closely for the past quarter century. In areas like Medicare Advantage, for example, we’ve been covering that space for a long time.

I actually was a health care lobbyist for a while even before working on Wall Street where I had been involved with the whole Balanced Budget Act of ’97, and the transition of Medicare+Choice — ultimately leading to Medicare Advantage. Then we also covered the health care facilities, companies, acute care hospitals and behavioral health companies as well.

In terms of Stephens, the firm is one of the largest privately-held independent investment banks in the US. The firm has offices in the U.S. and Europe. The firm was founded in 1933 and provides a range of services to our clients, including equity research, investment banking, capital markets and capital management.

Given your scope of research and coverage, how are home-based care companies specifically faring right now compared to everyone else?

Let’s put that in context since the pandemic. It’s really been a tale of two different stories for this sector. The stocks actually started out the pandemic as real pandemic winners when we had the whole work-from-home-type analog trade in the market and with the expectation that the space would be a significant beneficiary of that.

Then, as the pandemic sustained itself, and a lot of the pressure started to build and when the broader investment climate deteriorated, the stocks faced more challenges. When we look at the overall aggregate period of the last three years, the post-acute home health sector has actually underperformed on the market. In managed care and health care facilities, that underperformance has been more weighted towards the last 18 months or so.

Within the sector, though, there’s been variation in generally what we see and companies focused more on personal care and home-based care outperform given how much better the reimbursement environment has been there. Whereas companies that are more levered to Medicare home health reimbursement, in particular, have been relative underperformers.

Then we’ve had all the consolidation dynamics, too, at play.

One of the things I love that Stephens puts out are the underlying drivers that dictate success in home health care. There are a few things that you’re measuring on a monthly or quarterly basis that generally are good indicators of the long-term and short-term success of these companies. Can you go into that a little bit? What are you tracking in order to see if these companies are on the right track?

For personal care, we focus on hours served and billable hours. On reimbursement for home health, we focus on their organic growth trends. It ultimately comes down to this home-based care tracker that we cover and it looks at a whole range of functions. It looks at home health admissions trends, reimbursement trends that we see in Medicare, Medicare Advantage trends and what we’re seeing in the episodic and non-episodic trends.

With personal care, we look at particularly billable hours and then the rate trends.

We also cover hospice in this as well. We’d look at a number of the variables that drive the hospice sector including things like hospice admissions, length of stay — which has been a big area of focus as well from the pandemic. Ultimately, what we’re trying to do with this product is determine inflection trends across these bottom-up metrics. And, while looking at the broader subset of all the drivers of the industry, trying to glean which companies are outperforming in particular areas.

What’s interesting is we do see a wide range of success factors across different companies in the sector. We put this out in our home-based care dashboard product where we look at all the KPIs. That’s just one of a lot of products that we publish.

A few examples. It’s interesting if we look at just home health to start with and look at same-store admissions trends. Going into the fourth quarter, we actually saw Humana — who had acquired the Kindred at Home asset and is now the largest home-health operator — actually show some of the strongest same-store admissions trends in the fourth quarter.

We thought that was interesting because Humana is now rolling out their value-based care program across the contracting structures for home health. They’re still relatively early into that phase, but that’s likely going to continue here into 2023 and into 2024.

When we look at some of the revenue generation statistics in terms of maximizing revenue opportunity — the Pennant Group — which is the spinout from Ensign, has actually shown quite strong performance when we look at things like revenue per admission and revenue per day on the hospice side. That company has actually been effective at realizing the revenue opportunities, particularly as we transitioned into the PDGM model and away from the former Prospective Payment System for home health.

Then if we look at the personal care, I would say that some of the themes have been consistent across operators. If we look at the rate trends, generally, they’ve been pretty robust across all the companies that disclose these metrics. We tend to look at Addus.

Modivcare, as well, has become a meaningful player in that market. Amedisys has traditionally disclosed some of these metrics but now they’re actually divesting that asset.

On the hours side, in terms of the volumes, what we’ve seen is that it’s been constrained because of the challenges in hiring caregivers, but it does feel like we are on the cusp now of starting to see those volumes start to inflect more positive for these companies starting in the fourth quarter. We think that will likely continue into the first quarter and then continue to improve in 2023.

Are you surprised at all by Humana’s effectiveness with CenterWell this early? Is that something that you thought may take a little bit longer to get going, or just because of how established Kindred was, how established Humana is as a company, is that something that’s not as surprising?

It’s not too surprising for us just because of how deliberate Humana really was around the process of ultimately acquiring Kindred at Home, which is now a centerpiece of the CenterWell brand and broader clinical platform that Humana continues to build. Remember that Humana had a long-term investment in the platform and they really spent a couple of years deliberating on whether they would be able to successfully create value by acquiring the asset and rolling out the value-based care platform.

Now, clearly, the backdrop has gotten that much more challenging since they acquired the asset with the pressures that we’re seeing with add-on expenses – on wages, on reimbursement and on volumes. With Humana, we are seeing them committed to that rollout. Also, they’re going to be taking on a larger piece of the spend as part of this. It actually helps them enhance the revenue picture, too, in terms of the partners that they’re working with.

We really think that tracking Humana in terms of how they’re performing on this rollout of the value-based care initiative in home health is going to be really insightful for the rest of the industry because, clearly, right behind them we have UnitedHealth and Optum. Now having acquired LHCG, we’re going to be very interested in whether Optum and United roll out a similar model for LHCG or take a bit of a different track.

That’s the conversation that we’re having about UnitedHealth and another company that we cover as well. Clearly, the focus on value-based contracting and on Medicare Advantage contracting is a huge area of focus right now and critical for home-based companies.

What will another rate cut mean for these companies given that it had made them underperform recently? It’s obviously something that’s baked into how people are viewing these companies right now, but at the same time, it’d be yet another cut. Obviously, that’s going to be a challenge for them. How do you feel about how that’s going to affect them, short and long-term?

It’s the biggest single overhang in the public investor community right now around the home health companies and it’s frustrating because CMS clearly utilizes a meaningful level of lag data in terms of how they conduct their analyses. The real-world inflation has clearly accelerated. We do understand that CMS, even more recently in some of the stakeholder interactions, hasn’t seemed to reflect that they are fully recognizing or sympathetic to the idea that this will be a major challenge and affect access to care.

We can see, in the volume trends that these companies report, that it is really constraining the ability to hire more skilled nurses. This is something with CMS that can often be a bit frustrating — and with payers in general — is where they’ll speak to certain policy objectives that are core to their view on advancing the health care system, and making for a more efficient and productive health care system. But then they do things with reimbursement that don’t seem to be aligned with that.

To boil it down: while there is a lot going on across all three of these subsectors, what CMS does with the 2024 home health rates is most likely going to be the single largest determinant of investor sentiment, and then also of investment in general. It’s important, putting aside just the publicly traded stocks, how things like the M&A environment will be dictated.

For example, just yesterday I spent the day hosting investor meetings with the Addus management team. They have been a successful, consistent operator. They operate in all three of these markets. Home health for them is relatively smaller. It’s only around 5% of their revenue. With that said, it is an area they wanted to deploy capital to grow that business through acquisitions, but clearly, they’re going to be very disciplined right now and prudent around engaging in deals focused on home health until we have that clarity on the reimbursement. And again, how that influences the valuation dynamics too where the publicly traded companies have been under the microscope for a while.

A lot of these stocks have been substantially pressured. The valuation multiples have come down quite meaningfully since their peaks during the earlier part of the pandemic, but on the sellers’ side, I think a lot of these sellers are still holding on to some of the memories of where deals were getting done and that’s creating friction in the market right now. That’s going to have to work itself out.

Hospice is another good example of that where we had a tremendously active deal environment for a number of years. Really, hospice was the tip of the spear in terms of M&A activity with strategics and with private equity, too. Valuation multiples have gotten very rich, but hospice fundamentals themselves have been more pressured over the last 12 to 18 months with a variety of headwinds from the pandemic.

That’s affecting margins, and that’s affecting EBITDA for these companies, and that’s another area where it feels like the pace of activity has frankly slowed quite significantly from where we were 12, 18, 24 months ago.

Because of those Medicare fee-for-service conditions, how important do you think it is for these companies to be successful in their negotiating with Medicare Advantage payers moving forward to offset some of those cuts to make sure that the financials are stable as they take on more beneficiaries in MA?

It’s central to the story and to the strategies. It’s absolutely critical. Separate from even if the Medicare fee-for-service reimbursement environment hadn’t suddenly gotten so stunted, the long-term structural trend in Medicare is still towards a significant long-term movement into Medicare Advantage. The numbers are simple right now, right? We’ve just pretty much eclipsed 50% or half of the overall Medicare market being in Medicare Advantage.

When I started covering the managed care stocks after the Balanced Budget Act of ’97, we had dipped into the low-teens percentage. I’ve watched this go from 12%, 15% to 50% in, let’s call it, a little bit over 20 years. And the Medicare Advantage space is still growing 7% to 9% annually, and Medicare fee-for-service is barely growing. Now, when you add on the variance and the margin profiles, the economics where you look at many of these Medicare home health companies, maybe they’re reporting 12%, 13%, 14% adjusted EBITDA margins.

Inside of that, you have Medicare fee-for-service business with margins substantially higher. MedPAC tries to argue that the margins are in the low 20s. I’m sure the industry would push back on that, but they’re clearly higher than the consolidated average. Medicare Advantage is barely profitable for a lot of these companies with single-digit margins to begin with. Ultimately, the economics need to balance out between Medicare fee-for-service and Medicare Advantage. It’s as simple as that.

I have these conversations on both sides of the negotiating table. I cover the home health companies and I cover all the managed care companies too. I do find it very interesting that the managed care companies across the board, when they talk about their key long-term mega themes in health care, obviously value-based care is an enormous one, but the shift to the home is a theme that all these companies emphasize over and over again in their investor presentations to investors and in their discussions with the market and with analysts. Yet we always hear from home health companies about how terrible the reimbursement is in home health.

I think, ultimately, there’s going to have to be some shaking out and some achievement of more of a balance here. It does feel to me right now like the economics are inordinately skewed toward MA, relative to home health in this particular area. Remember, the other challenge that we’re going to have to remember is out there. And that is that the Medicare Advantage companies themselves are going to be facing a tougher reimbursement climate.

In the last couple of years, CMS has given the MA companies unusually strong reimbursement updates and it’s still been really tough for home health companies to get proper reimbursement. Now the MA companies are looking at much tighter reimbursement, a new risk model that’s being implemented that is going to create a lot of complexity, and at the same time, the home health companies have to even negotiate more furiously for higher reimbursements. That’s a story we’re going to be tracking, but it’s uncertain exactly what the end result is going to be as we look out to 2024 and beyond.

It’s interesting to see, it could go two ways. Obviously, home health providers are hoping that those MA plans will react to that by saying, “Hey, let’s put more money and more focus on the home-based care side of things to control post-acute spend,” but they could also say, “Hey, we’re getting less. That means you’re getting less.” It’ll be interesting to see that dynamic play out.

Yes, absolutely. Ultimately, we need to remember that when you’re shifting a care consumption or utilization into the home, it drives substantial savings for Medicare Advantage plans, relative to being in a SNF or relative to being in an ERF or clearly, being in an acute care facility.

At some level, I do scratch my head sometimes around why MA plans are being so difficult on reimbursement to home health when in the overall scheme of things, that’s not a lot of money, relative to having patients end up staying in a facility.

This also comes down to how fragmented the home health industry is and the difficulties for a lot of home health agencies to really distinguish themselves with MA plans as not just being commoditized, right? Ultimately, value-based care is an area that could separate that dynamic. That is something that probably the more highly scaled companies are able to, on the home health side, participate in more because there is a significant investment in complexity, separate from the regulatory complexity that we’re dealing with that’s being pushed on the industry by CMS. That’s probably a theme that ultimately would drive more consolidation over time.

There’s a lot of debate right now, too, around how this consolidation will play out. Because we’ve got larger home health companies wanting to acquire smaller ones, but there’s this friction around multiples and around deal valuations right now. Then, obviously, you have the Medicare Advantage companies just taking out some of these largest players, too. Remember, they’ve got that leverage dynamic, too, with Medicare Advantage as well, whereas a Humana takes a Kindred as a subsidiary, and United takes on LHCG as a subsidiary — they’re going to want to ensure that the economic future for those subsidiaries is positive and emphasize that opportunity.

They have folks like us writing reports on them every quarter, evaluating them on that. It also raises the point of whether, at Humana or United, how much more interested are they going to be in raising reimbursements right now for these other operators out there when they need to focus on maximizing the value of these assets that they’ve recently acquired.

How was the event with Addus yesterday? Was there anything else that you gleaned from it that you maybe had not considered prior it?

I always enjoy catching up with the Addus management team. I think that they have a long track record of disciplined operation in the industry. They’ve been through the home-based markets in both easy and difficult times. They’re very prudent. Particularly, we see that with their balance sheet, for example, they’ve kept their debt leverage very low. That’s something that their stock has been rewarded for, relative to some of the other stocks with higher leverage, given the market’s focus on rising interest rates and liquidity, essentially.

With Addus, on the M&A side, I think they are eager and ready to do transactions. They’ve talked about wanting to focus a bit more on the personal care, which is their core market, and home health as compared to hospice, where Addus had been very active on the M&A front for a number of years in terms of building out that platform. They want to be very disciplined as well on the acquisition side. Separately, they do think that the reimbursement outlook will remain solid, actually looking at even 12 to 24 months for personal care because of the current positions of the state budgets, which have been favorable.

We’re going to be watching that area, frankly. Clearly, investors are going to be focused on whether or not the economy does flow. What that means for state budgets and what that means for reimbursements as well.

I do want to also mention redetermination. The return of that, which just kicked off four days ago, is a huge area of focus for investors, but it is less relevant — frankly — to personal care companies and to home-based companies in general because the clients and the patients that they serve tend to be polychronic dual-eligible-type patients who are just eligible for core Medicare or Medicaid services.

That doesn’t have to do with normal Medicaid eligibility based on income levels. We cover the managed Medicaid companies, for example, where this is a big area of focus but we’re not expecting that particular issue to be really much of a headwind at all for the personal care companies.

Do you think the home-based care companies on the public market reflect the rest of the industry?

I think that you already named a few of the attributes that are important, but it really sets the overall tone for thinking about both some of the investment considerations as it relates to things like sentiment and valuation, and then also how the market is thinking about evolution in the operating environment. Clearly, from the sentiment perspective, much of the market is going to be at least referencing what is happening with the stock prices and valuations of publicly traded companies.

It’s the most visible and constantly evolving valuation metric to reflect all the latest information in the market. When you think of investor sentiment, many of the large investors are talking to the publicly traded companies, and that’s dictating their overall sentiment in the industry. Then when we think about the operating environment. These companies do tend to have higher margins and more ability to generate free cash flow, which they can then use to invest to try to adapt to how the market is evolving. So whether it’s with Medicare Advantage, whether it’s with value-based care, investing in programs to do that.

I think a clear example of this would be Amedisys acquiring Contessa, which clearly has also had its challenges. I think Amedisys would be the first one to admit to that in terms of the ramp-up of that business. When you think about trying to create a new category within the space by moving more into those hospital- and SNF-at-home-type programs, you need a lot of capital to do that, though.

Frankly, Amedisys has spent a lot of capital, both on what they pay for it and the losses that they’ve invested in to build that business. A small company is not going to be able to do that, but ultimately if the market moves there and that becomes part of the core package of what these companies do, they’re going to have to adapt as well.

There were a lot of rumors about a few home-based care companies going public in 2020 and 2021. Since then, a lot of those rumors have subsided, probably because of those macroeconomic trends that are affecting the entire economy. Do you expect any more home-based care companies to be go public in the near-term future?

Good question. I think that in the near future, the market is still licking its wounds, frankly, from the IPO cycle of 2021. There were a lot of health care services businesses that hadn’t really proven profitability, and they have struggled mightily.

The main one that happened directly in this area was Aveanna, which has struggled, too, with some of these pressures — clearly with both their stock price and also with some of the changes in the fundamental environment. Clearly, the overall market environment is going to have to improve. Then, there’s the bottoms-up-type dynamics that we’ve just spent the last 35 minutes talking about.

If I had to assign a higher weight to a couple of those, I do think that on the home health side, clearly, the investor community getting more conviction on Medicare reimbursements, both for fee-for-service and for MA, is going to be key. Investors are going to want more clarity on that.

Personal care — frankly — that’s been an area where it’s been a bit more stable. More recently, obviously, there are areas to monitor in terms of potential headwinds if the economy slows, but there’s a little bit less controversy right now around the reimbursement dynamics. Again, that’s always the rearview mirror. One thing we’ve always seen is the pendulum swing back and forth around reimbursement, for sure with payers, and particularly with CMS.

CMS tends to overshoot on reimbursement cuts and then will come back and ultimately put corrective reimbursement in. That creates a positive reimbursement cycle. Then the market, both the industry and investors, think that’s going to be sustainable forever and maybe the sentiment gets overinflated. Then, CMS comes and pulls the rug out from underneath everybody and we wash and repeat.

Ultimately, we think that’s going to happen again, most likely. Clearly, if margins get pressured and that data on a lag basis starts to catch up to CMS, we will start to see better reimbursements and that could reopen that opportunity for more active public investing of some of the companies that are still private in terms of opportunities to go public.

I do want to ask you before we go, a prediction that you might have about the home-based care industry at large?

In terms of the under-the-radar screen, I don’t know about that because we try to keep everything above the radar screen as much as possible. I would say that as we just talked about, the centrality of the focus will be on these reimbursement trends. On some of the policy dynamics, there have been some proposals to really invest more in the home-based care area that Biden had proposed, for example, that ultimately didn’t come through.

I’m going to bring it back to something that’s not so spicy, but I think that ultimately, it does come down to having the actual frontline personnel to actually deliver these services. When you look at really the crux of everything, reimbursement has been key, but the other issue has just been around the labor dynamics and it’s been around whether it’s skilled or unskilled.

If I had a prediction to give you there, it does feel like the environment — from the hiring perspective — probably will get better more quickly in the unskilled area. That does tend to be more directly correlated with the overall economic cycle and with the labor market. I would be surprised if we don’t see personal care companies, for example, start to be able to improve their hiring right as the unemployment rate starts to rise.

I think there will also be some level of correlative benefit for skilled workers as well. When the economy gets tougher, nurses that have been sitting out for a while may come back into the workforce, but we still also have the long-term structural constraints that we have around nurse staffing and clinical staffing shortages. That’s going to be an issue for a long, long time to come.

It’s been something that we’ve been focusing on really the whole time I’ve covered the space. I think 10 years from now if we did the same type of talk, we’d still be talking about some of the structural challenges that we’re facing in staffing. Especially as we even have more seniors to care for in the future.

The post The Underlying Trends That Matter Most For The Home Health Industry In 2023 appeared first on Home Health Care News.

The Helper Bees (THB) is smack dab in the middle of home care providers and Medicare Advantage (MA) plans.

As its network of providers and plans grow, its gaining insight into what makes these relationships work, other than its own technology platform.

Andy Friedell – the founder and CEO of healthAlign, and now COO of The Helper Bees – believes that the next policy revolution in home-based care will be due to the supplemental benefit changes made by the Centers for Medicare & Medicaid Services (CMS) within the last five years.

The Austin, Texas-based THB works with payers and providers across the country to take the complexity out of care delivery.

Friedell sat down with Home Health Care News on the latest edition of HHCN+ Talks to discuss what he’s learned about MA-home care provider relationships, and how he thinks the landscape will evolve over time.

The transcription of that conversation is below.

HHCN: Andy, let’s start with a background on you for people who may not be familiar.

Andy Friedell: I’m Andy Friedell, the chief operating officer of The Helper Bees. I’ve got about 25 years in the health care space. I started off in the pharmacy benefit manager space many years ago, moved to home care a little over a decade ago and started a company called healthAlign that was really focused on helping plans better manage a pretty diverse range of services into the home.

It grew out of experience that myself and some of my teammates had around the challenges that plans have in this space — many times challenges that they don’t necessarily see out of the gate. There’s such an incredible administrative complexity of organizing services in the home, the data visibility when you’ve got lots of different providers that all use their own systems, and then really the challenge of fulfillment is probably one of the biggest ones that impacts members.

What we’ve done is we’ve built a large network of non-medical providers all over the country. We brought them together on a common tech platform, and that company I started, healthAlign, was acquired about two years ago by The Helper Bees. It’s just been a great combination for the two of us. I met Char Hu, the CEO of The Helper Bees, probably a little over two years ago now. We were just both surprised at how we were separately trying to solve some of the same challenges for large payers organizing services into the home but coming at it from different angles.

He had focused on the long-term care insurance space. Our team had focused on Medicare Advantage. His team had done an enormous, incredible job around member engagement, member satisfaction and care concierge programs. Whereas the healthAlign team had built this infrastructure to drive fulfillment, and so together, it’s been really a best-of-both-worlds combination where we’ve been able to bring really important tools for members and case managers to organize services.

Then you get the certainty and reliability of knowing that fulfillment is going to happen by this technology that watches fulfillment in the background and helps you close that gap. It’s been great and, for me, a lot of fun getting started in this space.

When you’re working with a non-medical home care provider, are they coming to you or are you going to them?

It’s a little bit of both, but it really grew out of plans. I used to work in a big home care organization and health plans would sort of come to us for their home community-based programs. I think part of their interest was there was a hope that you could maybe solve the fulfillment challenge with a single relationship.

You have one big nationwide partner and that solves it for you. That always sounded great, but in the back of our mind, we knew that was unrealistic. That was where the origins of our approach started. We said, “Give us your programs. Make us your single point of accountability. What we can’t fulfill, we’ll organize with our networks of providers.”

We knew that no home care company, no in-home service provider, is really well-positioned to fulfill all of the needs of a big health plan and so we knew that you have to have the power of many to make it work.

You were also solving some of those logistical challenges and technological challenges for those providers. When they wanted to get in with Medicare Advantage payers — which a lot of them aren’t engaged with — you were able to solve those final steps as opposed to them having to do an overhaul to their operations.

Yes, exactly. And it really fits on both sides.

For the provider, we make it easier, but certainly for the plan as well. I think everybody intuitively knows that services in the home are valuable and important. The problem is, a member doesn’t just need rides or just need meals or home care. They need all these services to interact with each other and that’s when it becomes exponentially complicated for a health plan to think about, “I need a ride vendor, I need multiple ride vendors, I need food, I need home care. I probably need multiple home care vendors.”

Then the thinking of credentialing them all and contracting them all, recruiting them all, watching fulfillment across them all, getting them all paid, getting documentation back from all their different systems in one language that you can make sense of. That’s what we’re trying to solve.

It is really on both sides. We’re trying to make that a central platform for the plan so you can centralize a lot of those elements.

Also for the provider — we’re trying to bring health plan business to providers that maybe either chose not to work with health plans or it never even occurred to them to work with health plans in the past. The only way you do that is to just make it simple. We have very simple mechanisms for credentialing, for onboarding, for documentation and then we’re paying providers every 14 days. So as long as they’re providing our services, documenting and following the rules of our agreement, then they’re getting paid every 14 days.

Billing rates are going up so much, especially with the private-pay clientele. There’s a smaller amount of people in the country that can afford that private-pay home care for all the hours that they need. I think this is something that providers almost have to look at.

I think so as well. It’s a great place, I think, for a provider to think about diversifying their business mix. You can still be a largely private-pay provider or focus on a certain segment of the market that you’ve had success in, but it’s probably a good idea to put some chips on this space because it’s growing very rapidly. That’s what we’re trying to do: make it easy for providers to make that decision.

On the Medicare Advantage side, there are threats to those payments. CMS is calling it a slight increase, but it depends on who you talk to. Then there are overpayment clawbacks.
Basically, there are worries from Medicare Advantage plans that they’re going to be paid less moving forward in the next couple of years. Because of that, how do you think that will affect home care benefits and these plans working with providers?

I think the impact on some of these new benefits is going to be relatively small, and that’s largely because members have become aware of them. They’ve learned to expect or really want these benefits, and so plans need to have that as part of their overall benefit profile. I think when you look at these rate changes, again, I’m not an expert in all the formulas and whatnot, but I think it depends on who and what markets you’re talking to from a plan standpoint. Because it’s a combination of a lot of factors that are driving this rate conversation.

There is the rate of increase in the amount CMS is paying, but then at the same time, there is this change they’re making to some of the risk scoring methodologies in the background.

Then there is the geography variability of rates. There are a lot of factors that plans are looking at, but I don’t think they’re likely to come at this by ratcheting back some of these benefits that are really popular and that have value to the plan. I think what’s more likely is that it sort of increases the need for the plan to become really efficient or in the way it approaches these benefits. Whereas in the past, it was sort of, “We just have to add these into the mix. We have to add rides. We have to add meals. We have to add home care.”

Now I think plans are thinking about, “Alright, how do we make this work well and efficiently so that we can keep and preserve these benefits and demonstrate the value that they bring, both from a financial standpoint, and to the member as well?”

These plans, even if they need to tighten their belts a little bit financially, their main thing is they want to keep on to these members If they’re losing members, it doesn’t matter where the rates are. That’s what they can’t have happen.

Yes, for sure. I think it’s a combination of retention and a mix of services. In addition to the attractiveness of these benefits that you mentioned from a retention standpoint, I think there is the underlying value of the benefits themselves.

When you think about the value of keeping somebody in home, the value of organizing errands to pick up somebody’s medicines, the value of getting somebody a ride to their doctor’s appointment, these are relatively low costs. Relatively, from a licensure standpoint, easy interventions to engage.

They have a huge impact when you can think about if somebody is or isn’t going to take their medicine or if they are or not going to make it to their doctor appointment. I think that’s what plans were seeing.

You’re right. From a retention standpoint, there’s significant popularity around them, but part of that is just the value as well that they provide, the underlying value of some of these services.

I want to take you back now to your early days at healthAlign. Obviously, you’re still dealing with this, but what was the problem when home care providers and health plans were trying to work together? What were the barriers? What was causing things to fall through?

It’s a great question, and there are probably different barriers on each side which I can speak to.

On the health plan side, there was this idea that out of the gate, you just need to find a provider and make a provider available. A single provider available in all your markets and then you can check the box and call it done.

The reality though is, particularly in the last several years, caregiver availability for many of these services is a very real factor. There’s this idea that if you build, they will come. It’s just not the reality in home care for many services.

The reality is that, what we saw, many health plans would initiate a benefit. They would find that single provider, make the list of providers available to their case managers, members would call in and want the service, a case manager makes a connection to the one provider and basically moves on and assumes that everything is going to flow nicely from there and then the job with that benefit is done.

The reality, though, was that caregivers weren’t coming to the home or there were staffing shortages or delays. The plan didn’t know about that until maybe a month later when the member called back really annoyed and said, “Hey, you told me I was getting home care a month ago, nobody’s called me.”

That was creating a huge amount of abrasion out of the gate with members and plans around these benefits. It just underscores the reliability, the importance of fulfillment reliability, when you’re going to offer these benefits. It’s almost worse to offer a benefit like this that you can’t have than just not offer it at all because you create an expectation. If you can’t deliver on it, it’s a huge hit to your relationship with the member.

That’s what we saw early on: that importance of that fulfillment reliability. We started recruiting multiple providers in every market. Then COVID came. We had to actually look at it almost week by week, and certainly market by market, to see how many providers we felt we needed at any given market at any given time. We would see that places like upstate New York, you would need several more home care agencies to manage your referral volume than maybe you needed in Central Florida. Northern Kentucky was similar.

You have these different markets where caregiver availability was a really huge issue and you needed to bring together that kind of “power of many.”

On the provider side, I think it was more about claims. Providers just didn’t want to submit claims, they didn’t want to deal with all that. We offloaded that responsibility from those providers and said, “Here, here’s a link. Here’s a simple page, upload your documents, your license, your insurance, your policies.”

Then we told them to manage through this agreement with us. We told them, “When we give you a referral, you reach out to the member in 48 hours or less. You start services in a certain number of days. As long as you do that, you’re going to get paid from us every 14 days.”

How has that evolved over time compared to what you were doing, let’s say three or four years ago, now that you’re with The Helper Bees? How have things evolved? What have you seen in terms of improvements? Are providers and the plans improving in terms of what they know about each other and how they’re working together?

Yes. One thing that I stumbled across in our data recently, which blew my mind, I’ll share it with you.

There’s been a change in the last few years in some of these benefits evolving from what I would call case manager-directed to more member-directed. Case manager-directed means a case manager would say, “I want to approve a member for 48 hours of home care or 60 hours of home care or a certain number of visits.”

That was what the member got. That was the benefit. Member-directed is, many times, the member is getting a wallet and they’re making decisions. “Do I want to spend this on home care rides, handyman meals, etc.?”

What we saw is really incredibly interesting. When you look at the same exact service, just look at home care, when it’s a member-directed versus a case manager-directed benefit, the fulfillment rate is completely different.

Case manager-directed home care benefits, we see fulfillment probably in the 45% range. Member-directed, 75% to 80% of those benefits are getting fulfilled to the member. It just really speaks to the member being more invested in the process. The member is saying, “I know I want this service, in this amount, at this time, and I’m going to order it now. I’m going to see that through to completion.” Versus a case manager just bestowing on you some number of hours that you may or may not feel you want.

That’s really interesting and I appreciate you sharing that data. The fulfillment with the case managers, can you explain further why there may not be a great fulfillment rate? Is it just because the members may not have prescribed it for themselves so they’re not necessarily engaged?

Yes. It’s a great question. Just to be clear — this is not at all in any way a knock on the case manager. This is just a byproduct of how we are allocating the services to the member. Some of these are the case manager playing a gatekeeper role and they’re saying, “OK, Andrew, you’re approved for 60 hours of home care.”

You might feel like that’s what you need or you might not. You may have just taken it in your conversation with a case manager, but you’re not terribly invested in it the same way you are if I say, “Andrew, here’s $300. Here’s a website, or here’s a care concierge number, you call and you make decisions on which of these services from this menu you want and when you want them.”

It’s that simple change of putting you in the driver’s seat. That has a huge impact and almost doubles the fulfillment rate of the services. A lot of times, the challenge of getting home care into the home is just making the connection between the agency and the member, securing the date and making it all scheduled to happen. When you’ve placed the order, you’re like, “I want it now.” That whole barrier is taken off the table and it’s just enabling a much simpler transition into getting services started.

Since you joined Helper Bees, is there anything that’s changed in terms of your processes, or is it the same but just embedded in a larger company?

Changes have definitely come about. There’s the combination of our products, but then there’s the combination of two teams that, when they work together, has been like one plus one equals three or four. Combining services, as I said earlier, Helper Bees had just done a really great job building out member experience, member engagement tools and care concierge benefits.

Right away, we were able to build that into one of our engagements with an MA plan. We turned that on at the start of 2022 and it had a huge impact on that plan, their population and our ability to engage the members. That honestly was a big factor in driving that fulfillment rate I talked about. Getting a team of people who get on the phone with a member, talk to them and really handhold these services to start made a huge difference. That’s been great.

I had a lot of respect for the investment in data analytics. It’s Char’s background, and he had invested a great deal there. That has allowed us more resources to be able to capture the information, make sense of and analyze the information that’s coming out of the home. That has been great.

Have you noticed that plans are more engaged in the idea of wanting to get home care for the members? That home care providers are more engaged in working with MA plans and members are more engaged in trying to get their own home care?

Yes, we see it at two different levels. There’s that publicly available information that’s out there. You see some of the reports. ATI Advisory does a great job. There are others that put out really great information on the progression of these benefits.

You look at in-home supports benefit. I think it started in 2019. It started with like 50 plans, then went to 200 plans, 400 plans, 700 plans, 1,000 plans. You see that growth in that publicly available information.

What we see behind the scenes is another level of growth that is, in addition to the plans that are adding the benefits, we’re seeing what we think of as an internal adoption rate of these benefits as well. I think, in some ways, it’s exceeding that ramp-up I just mentioned because what percent of the population are being referred into these programs? It was nominal out of the gate, then it was a half a percent, coming up to a percent.

It’s now several percentage points of members across the whole are getting these benefits. How much of the benefits are they using? Again, it’s ramping up. I think that’s being driven by internal adoption, which is due to case managers who are now familiar with these benefits. They know how to use them. They know how to bring them into the conversation with their members.

Members, I think, are starting to understand these benefits and appreciate the role that they play and really wanting to look for health plans that have good combinations of in-home support services.

I also assume that utilization begets utilization. The more this is delivered on, the more in-home care is happening, the more people want it and also the better at delivering it these providers and plans are.

That is for sure. We see that all the time. The members who are familiar with the benefit are the members who are going to now engage it more regularly.

A few years ago, you told me that as these Medicare Advantage regulatory changes were akin to when Medicaid began paying for home- and community-based services. Could you explain that further?

It’s a really interesting comparison. I think people should be paying more attention to it because it is the driver and why Medicare is looking at what it’s looking at now. Think about Medicaid. Medicaid, you go back to several decades back, early ’80s, the amount of spend that Medicaid was spending in the home was zero.

There were no dollars being spent on services in the home, but you had these seemingly small policy changes that took place in 1981, ’82, that allowed for the first states to introduce these waiver programs for home- and community-based services. Again, if you and I could go back to that point in time and have this conversation then around that, we’d probably be answering the same thing about, “Oh, is this really going to catch on? Are these really going to take root?”

Again, it was a seemingly small change. If you just looked at one waiver program in one state in one really small population dollar amount, you would not have seen this huge groundswell that follows that. In the several decades that have passed since then, what happened was the total share that Medicaid was spending on long-term care went from 0% to more than 50%. The institutional and home care spend just flipped. You just saw that ramp up.

The really, really, really interesting piece about it is — during that exact same period — the share of all Medicaid spend that it was spending on long-term care went from like half down to a third. That’s the really interesting outcome of all this. It means that, not only was it great for members getting services in the home, it was a great deal for the federal government and for the states. By making these policy changes, they effectively rearranged the program dollars and made room for the program to spend dollars elsewhere.

They got value out of that home- and community-based spend that I think people don’t look and see and understand how important that is. Fast forward today, these seemingly small policy changes are opening the door to some of these in-home support services in 2019. Then SSBCI in 2020 was allowed. You have the VBID models that were introduced and now expanded. You’ve got some of the changes like the GAO report came out recently looking at the importance of encounter documentation of these services into the home.

There are lot of things that are going on that, in my mind, are really the moving pieces coming together for Medicare. How do you carve these services into the revenue model so that they become a component of the member’s profile the same way it is with Medicaid? Medicaid looks at the member, and they value these services because they’re trying to care for the whole member. They recognize the social components as an important part of the member’s health.

They want us to understand that, invest in that, and better manage that, but then they also know there’s just value of care in the home. I think Medicare is starting to see that as well. But really, it’ll be important for the documentation to be correct and available and for CMS to be able to start to capture that information so they can demonstrate the value.

That’s where we’ll become the real catalyst on bringing these into the program once CMS has created the environment to measure the value of them. The changes you’re seeing right now are CMS setting the stage for being able to better measure the value of these investments.

The reason I ask this is because I think it’s so interesting and also important to keep that positive, long-term view because they’re still relatively new, these benefits. So obviously there’s going to be pain points, things are going to have to be worked through. I think if that is the case, providers will probably want to get involved now, if they aren’t already, then when this is more ubiquitous in two to three years.

Yes. I think it’s definitely where this is going. I think the VBID model is particularly interesting. Plans increasingly adopting it and CMS extending it out further are really indicators of that because it’s really giving plans the incentive not just to think about ways to introduce these services for certain populations, but also to require that they be tied to value.

That’s going to drive better encounter documentation. That’s going to drive better efficiency and organization of these benefits. Honestly, that’s where we see our opportunity at Helper Bees because that’s the solution we are trying to bring to this space. We’re all about helping plans. I think 2.0 of these services is all about efficiency and better documentation and more reliable fulfillment. That’s completely what our model’s geared towards.

You work with a lot of plans. What are the ones that you know are really easy to work with for both you and home care providers? What’s their approach? What’s their attitude like?

We just went live this year with a really large nationwide MA plan. Char and I, we would speculate on our side what caused them to pick a small company in Austin to do this rather than doing it themselves. What we heard from them was that they saw the challenges that some of their competitors were having in trying to organize several single endpoint solution providers, challenges from an administrative standpoint, challenges from data, challenges from fulfillment.

They saw that and they wanted to take a better approach and, at the same time, they saw and liked the value of our ability to aggregate information up across a lot of providers. Whether it’s a handyman working out of a truck, a pest control exterminator coming or a home care agency with their local branch, all of those need to bring documentation back to the plan in a way that can be aggregated together. That’s what we do.

I think our success with plans has been around plans that want or see this landscape evolving and recognize the value of a platform that brings multiple services together and allows aggregate documentation visibility across lots of different services.

On the other side, what are the providers doing now better than they may have before, or what are the best ones recognizing in terms of these relationships between plans and themselves?

That goes back to where you and I started. Whether or not you’re a provider, how do you want to play in this space? Year 2023 is not going to make or break this business, but it’s worth putting some chips on this space. What’s gone well are providers who maybe dedicated a few caregivers to these MA services because it can be a little bit different. It can be almost like an intermittent home care because the visit length is sometimes dictated by what the member wants at that time.

There can be different variability in that. We’ve had success where we have found care agencies that wanted to dedicate a couple of caregivers to this business specifically.

Interestingly, we found them because our platform scores providers. We rank providers based on how well they do in our environment, how much of what we assign do they accept, how quickly are they getting in the homes starting service. It reinforces future referrals to those that have done well in the past.

That’s actually how we found some of our best providers. The system found those for us. We found a local franchisee down in Southern California. We found a woman and her husband, who run a great agency franchisees in the Central Florida area, really just because our system was scoring and reinforcing. Then suddenly, you look in and you see that providers who have dedicated a small mix of their caregivers to us had a huge share of our volume.

We would scratch our heads and say, “We’ve got to look in and figure out why are these individual providers suddenly appearing in our system with so much share?” It was because they were approaching the business a little bit differently.

They were saying, “I want to invest in this space. I’m going to put a few caregivers on it.” They were putting one caregiver on it initially because our system was reinforcing it. Then they were putting two, three, four. Suddenly, they had a good share of their business coming through this relationship with us.

That’s a positive feedback loop. The more that you put into it, the more you’re going to get out of it down the line. I assume, too, that the technology that you’re working on at Helper Bees is also one of the biggest drivers of this.

Yes, for sure. You’ve got to make it as easy as possible for these two parties to work together in order to enable this to succeed. That is honestly what we’re trying to drive. You and I have had conversations in the past about conveners and I know there’s mixed views on that word. We look at our role entirely as enabling easier access to these services.

We don’t play a role in utilization compression. We are always trying to get the best deal, but our role is not predominantly rate compression. It is really about creating easier access points for plans and these social service providers to be able to work together.

What would keep this trend from continuing, if anything?

I talk to our team about that frequently and it’s hard to see what could keep it from continuing because you look at that Medicaid history, you look at the value of services in the home, value from the standpoint of what the member wants, what’s best from a health care standpoint and what’s best from a cost standpoint.

All signs point towards wanting to have better organization of more services into the home. It’s hard for me to see something that would turn this direction around. I think the key thing is it’s got to become better managed and better organized. I think the initial phase of these benefits being brought in by MA plans was a land grab. It was like, how simply and quickly can we turn on these new benefits to be offering something that’s attractive in the marketplace?

2.0 of that trend is us really now coming and helping plans rationalize these benefits in a better way. Make them easier, more organized, manage fulfillment better, make better connection points with more services through single channels. That’s where we see it. That I think has to happen. Big health plans are doing that now.

They are investing in technology that’s going to watch and redirect fulfillment across a large network of providers, and that’s going to standardize counter documentation from a diverse range of services as well. I think that’s the way to solve for that. That will then accelerate this trend I think further.

What’s one prediction that you have for the space?

I do think these signals you’re getting out of CMS right now, there’s speculation. Is it revisionist thinking on the supplemental benefits? I don’t read it that way. I look at it like CMS is bringing together the components that they’re going to want to see in order to tie value to these services, which is what they’ve done in the past and absolutely what they should be doing here as well.

When they’re looking at that GAO report on encounter documentation, that’s just an indication of recognition that this is really important. You can’t tie value to something if you don’t document it well. The fact that CMS wants to see better encounter documentation, I see as a good sign. I see it as they’re wanting to find the pathway for their ability to invest further in this space.

I think you’ll see change coming down the pike. I think you will see CMS moving in that direction, and it’ll bring Medicare to a spot where it’s looking at bringing that whole person set of factors into the calculation of member risk and member reimbursement and paying plans for, not just somebody who has a complex medical condition, but maybe helping recognize somebody who’s got a complex set of medical and social conditions that interplay with each other.

The post Why Certain Home Care Providers Are Seeing Success In Medicare Advantage appeared first on Home Health Care News.

Personal home care providers have long considered themselves the “eyes and ears of the home.” With that comes great responsibility, for certain.

It also comes with great opportunity – opportunity that agencies have not always taken advantage of.

One of the largest home care providers in the U.S. is trying to capitalize on that opportunity, and transform the delivery of personal care on the way.

In the latest episode of HHCN+TALKS, Julie McCarter, the care coordination president at the Chicago-based Help at Home, sat down with Home Health Care News to talk about her journey in personal care, how Help at Home is uniquely capable of implementing an ambitious care coordination program and what it means for the home care industry as a whole.

The recording and transcript of the conversation are below.

HHCN: Julie, before we get into the interview, let’s start with a quick introduction to who you are, what Help at Home does and your background with the company.

McCarter: I’m the president of care coordination, a business segment that we have created here at Help at Home. We are the largest personal care provider in the U.S. We have a 30-year history in the home care space with a focus on dual-eligible clients that we serve. We’re in 12 states and we serve 70,000 clients and employ 50,000 caregivers.

If those aren’t enough numbers, I’m always impressed with the fact that we just closed out 2022 serving 70 million hours in the homes of the clients that we serve. Yes, 70 million hours. We’re in people’s homes an average of 20 hours a week and our relationships with our clients are an average of four years in length.

We spend a ton of time with our clients and we have longitudinal duration relationships with our clients, which is really the foundation for building a care coordination business.

What drew you to the home care industry, and then more specifically, to Help at Home?

I have had what I’ll call an enduring health care career. I’ve been in health care for a number of decades and I really seek out opportunities to grow value and impact.

I’ve spent a number of those decades with health insurance companies on the payer side. When I thought about what my next set of opportunities could be, I specifically sought out things that got me closer to the patient, closer to the client.

I started to put those criteria together. When I thought about stepping into the home care space and serving dual-eligible seniors, the most vulnerable folks here in the nation, the opportunity at Help at Home called to me. Especially with the ability to create this care coordination program.

How did your new role as care coordination president come to be?

Care coordination has been in a pilot mode within Help at Home since 2021. This was a concept that was in a proof-of-concept stage before I joined the company in 2022. It’s really an opportunity to connect home care to the broader health care ecosystem.

The scale of Help at Home, the size that we are and the density that we represent in a number of states, puts us in this incredibly unique position to coordinate care and close gaps in care for the clients that we serve.

This also allows us to point out to important stakeholders, risk-bearing MCOs, managed care organizations, risk-bearing providers and create interesting value-based relationships to step into the care coordination space. That’s really the precursor and what got us into this.

Of course, there’s a business here to build, and to move from proof of concept to that building of the business in 2022.

What exactly is care coordination?

At Help at Home, we are the eyes and ears of what’s going on with our clients. We are the first observers of changes in their conditions. These are changes across physical issues, behavioral issues and environmental issues.

As we are observing those changes, we can collect that information through technology, analyze it, wrap it with more clinical assessments and interventions and then point it out to that broader health care ecosystem and make connections for our clients that they need.

We can activate primary care visits if that’s what’s needed. We can activate specialty care and activate more community resources if mental health is appearing to be a growing problem for the person.

This is one way for us to reach out to the communities around our clients in order to support them. Partners alongside us see value in that. We’re in their homes every day throughout a given week and there are managed Medicaid entities who are needing us to step in and help to close social determinants of health issues or dual plans that are looking for us to help close specific gaps in care.

What does the program look like now? Where is the care coordination program live and how large is it currently?

We are up and running in Illinois and Pennsylvania and looking to head into Indianapolis actually in the next 10 days. That will be our third market in which we will launch and then we’ll go beyond that as well.

We have 2,000 clients under program management in care coordination. We’re actively managing a population of clients in those markets alongside risk-bearing provider partnerships and managed Medicaid dual-plan partnerships.

What was the implementation of the pilot like, and what were some of the main lessons you learned throughout that process?

Our early focus was on implementation, growing, building and establishing the program. Those were the three key areas that have emerged as the most important areas of our focus.

Number one, of course, is building out the clinical team that supports our caregivers. Our clinical team is composed of nurses, RNs, LPNs, social workers and community health workers. As we step into markets, the creation and building of that team has been an area of focus.

Second is technology: data and analytics. I’ve described at a high level the fact that we’re really taking those hours in the home and translating them through a simple observation survey in the hands of our caregivers. This survey, which is on their phone, takes about three minutes to complete and they can do that for us on a weekly basis. We really grow a longitudinal data set about our clients.

We’re understanding when the client is really stable across those physical, behavioral, environmental issues — or when there are changes happening in the conditions of that client.

The third area is the partners: heading out into the marketplace, talking to really interesting partners about the value we can create and establishing those contracts, which have a value-based orientation to them. Those have been the early areas of focus as we’ve built the business.

As far as lessons go, the program construction is really built to serve the needs of this population, this dually-eligible population. We absolutely understood that the presence of community health workers on our care coordination team was critical.

80% of what most of us are dealing with in life, with regard to our health, actually has to do with the environment and our lifestyle choices. The community health worker is an incredibly impactful part of our team that heads into the home of our clients and can help them to stick to that diet change that they need to make for their heart conditions.

The importance of the community health worker to serve this population and be a part of our team has been a really important insight early on.

What is the value of having a care coordination program for personal care?

I love that question because I like to think about value through the lens of the two most important stakeholders in the mix here: the caregiver and the client.

The value that I wake up and think about every day and my team around me thinks about — and for sure the broader team at Help at Home thinks about — is whether we are creating value for our clients and our caregivers.

I’ll start with the client. Nine out of 10 of us want to remain in the home as long as we possibly can in our lives. You just start with that. We have the desire to be safe and independent and be in that less-costly setting versus an institution as we age. Care coordination can absolutely support and enable that desire of our clients.

We can keep them safe at home longer, we can help them transition to home if they are coming out of an institutional stay and we can help close gaps in care that they’re having while they’re in that home.

Value to the client is really first and foremost. Now I’ll pivot to the value of the caregiver.

Let’s face it, this is a tough job. It’s a lonely job. We need more caregivers than we have today and we’re only going to need more as we continue to age here in the U.S. What I really appreciate is that the culture at Help at Home is thinking about the importance of that caregiver role. The culture of caring for the caregiver comes through here. This is a role that we’ve got to treat with a ton of respect.

We actually have to empower these people to have the most impact they can possibly have and value their career choice. Care coordination elevates the value of their time in the home. That simple observation they can make can alert us to something as needed — nothing makes my day more than the feedback from a caregiver that they really do feel appreciated. It takes a village to care for their clients and we can activate that village for them.

What do you hope to achieve with the program in three to five years?

First of all, we’ll be in multiple markets at that point and serving a meaningful portion of the Help at Home population of clients. Growth matters. Growth is about the ability to impact more people.

We’re incredibly measured in our orientation, meaning this is a data-driven program and measuring our results is absolutely critical.

I’ll give some examples of spaces that absolutely will be measured over time and some early results that we’re seeing already, which are pretty exciting. We are measuring the satisfaction of our clients, of our caregivers and the tenure of both. Think about those two measures. If care coordination is fulfilling its promise of caring for people, helping them stay in the home longer and helping a caregiver feel surrounded by a supportive team, if all of those things are being accomplished, we will absolutely have higher satisfaction across our caregiver teams, our clients and longer tenure of both.

This just matters. We’re in a business where we employ net new caregivers every single month in this country and we want them to stay with us as long as possible. Satisfaction and tenure are important results.

The second set of results is obvious: let’s prevent avoidable events. The care coordination clinical interventions that we can create for our clients should absolutely reduce ER visits, inpatient stays, institutionalizations, all of these things. Those are really unfortunate events for clients. No one wants to do any three of those things and they’re costly. This can be measured not only through avoidance and decreases but through an overall decrease in cost to the population.

The final thing: you’ve heard me say the phrase “close gaps in care.” Gaps in care are very structured for us. Can we help to close blood pressure gaps in care for the partners that we are working with? The answer is yes. Early data is showing that we’re closing the blood pressure gap in care for a partner at a rate of 30%.

A second example is, can we help a partner close their annual wellness visit gap? The answer is yes.

These are hard-to-reach patients and hard-to-reach clients that we have trusting and long-standing relationships with that we can help to activate within the broader health care system. We’re closing that gap at a rate of 14% for a risk-bearing provider. Those are just examples of what matters to the partner that we’re working with.

What is the professional level of the community health worker in the program?

This is actually why it’s a really effective model. Caregivers need to operate at the top of their license. A caregiver is not necessarily a nurse, of course, and not necessarily a trained clinician.

Our community health workers have to answer survey questions like: Is there food in the refrigerator? Do the smoke detectors work? Has my client’s mood changed? Is my client breathing differently or having difficulty breathing?

These are very simple observations. We all make them every day. Community health workers, by training, are not necessarily nurses or social workers by licensure or certification. These are people who actually live in the community in which they serve. They oftentimes are affiliated with religious organizations or other community organizations and they’re absolutely committed to serving the community in which they live. That is the type of community health worker that we are employing.

What is Help at Home’s perspective on future capabilities of home care agencies in the home?

Health care wants to be in the home. Especially in a dual population, health care needs to be in the home. This is actually how we will reach and create an impact for these patients and clients.

Then you have to ask, “How does health care get into the home?”

There are a number of ways and point solutions that exist across our industry. We can bring emergency rooms in the home, skilled nursing facilities into the home, annual wellness visits into the home. I just think that for Help at Home and care coordination — and more entities should be doing this — there are a lot of patients who need us doing exactly this.

What’s the additional activation that we should create and enable through those precious home care hours that we are serving today? This gets back to the top-of-license conversation. We should expect a caregiver to activate some really important observations and insights for us and then support the needs that emerge from that.

I think that’s where I start. Health care wants to be in the home and home care is there, so it’s our responsibility to step up and make more of this model.

What are some challenges and opportunities you’re facing and are excited about in the near-term future?

When I think about challenges, in this space specifically, health care can be very fragmented. That’s absolutely magnified in the home care space. Home care is incredibly fragmented. That, to me, is a challenge. However, that can be pivoted to an opportunity when you start with a company like Help at Home.

Again, we’re the largest personal care provider in the U.S. We’re incredibly dense in the first markets in which I’m focused on. We’re able to step into a totally different opportunity against that fragmentation, and if you think about it, scale and density matter because we can turn to the stakeholders on the other side of us like risk-bearing providers, managed Medicaid plans, dual plans, and we’re sizeable enough and meaningful enough that there’s an impact we can create together.

We move from the challenge of fragmentation to realizing our size and scale, and now with a really interesting care coordination program, we can attract business partners who want to listen to us and want to work with us because we can make a difference to a meaningful portion of the population.

Those partners have been really interestingly open to innovating together and tying that capability and reward structure to creating positive outcomes for these clients.

In addition to care workers and community workers, what informal care team members tend to participate on the team?

Part of our technology build, as we step into a care coordination relationship with our client, is we build what we call a household record about that client. We start getting to know that client through the lens of who is that person’s caregiver or caregivers. Sometimes people have more than one. Who are the other people within that household? Who’s surrounding that person and possibly has a role in supporting that client? Who’s their primary care provider?

We actually think it’s incredibly important for us to become knowledgeable about who’s the quarterback of this person’s care because honestly, if the answer is, “don’t have one”, “don’t have a good one”, “haven’t seen one in a while”, that’s something that we step in there and facilitate as well.

Then of course we have our own team that wraps around that client. Whether that’s a nurse-aligned community health worker, I view all of that as what becomes the household record around that client.

That question is also related to the reality in our caregiver space. Sometimes caregivers are professional caregivers and this is their career choice. Sometimes caregivers are family members and that obviously varies across different states. We have both in our model so I’m actually really excited to continue to experience that nuance.

How does a professional caregiver feel supported by this program and how does that differ from a family caregiver? I expect there to be nuances, but in the end, both need to just feel like they’re wrapped around with a ton of support.

Now that the pilot’s off and running and you’re in multiple states, are there any opportunities that have come about that you didn’t initially foresee?

Something that I appreciated when I joined Help at Home in 2022 was this orientation of caring for the caregiver. That’s just a cultural orientation of our company. When you have that orientation, you focus a lot of time on matching a caregiver to a client for long-term relationships. That’s obviously a professional statement and doesn’t necessarily pertain to the family caregiver.

I think this program lends to the opportunity in retaining our caregivers for far longer than our competitors and then really turning to focus on upskilling career development for our caregivers.

I think half of our administrative roles that support our operations are people that are prior caregivers. Those are all things that are in the culture of Help at Home with regard to how we think about our caregivers.

Do you contract directly with health plans?

Yes.

Big picture, what do you think — if anything — will change in the personal home care space, and do you have any bold predictions for 2023?

I’ll put your question in the context of just what I get to do every day, so in a care coordination context for Help at Home. My bold prediction is we will absolutely grow and scale this business to create more impact for our clients.

I think our impact is limitless. I think that when we create incredibly positive outcomes for our clients and for our partners that we’re working with, those risk-bearing MCOs, risk-bearing providers, we become the provider of choice in the home care space.

That’s a fantastic outcome right there, as well as the outcome that we create for that caregiver elevation. I would hope that we are a lead voice in the industry of elevating the importance and the understanding of that caregiver role and really lifting up the respect for the role.

The post Behind The Development, Scaling Of Help at Home’s Care Coordination Program appeared first on Home Health Care News.

Years before he became a powerhouse attorney for the home-based care industry, Angelo Spinola was a caregiver.

Ultimately, it wasn’t his calling, but it gave him a taste of the industry that he advocates for today.

Part of that advocacy means educating providers on today’s regulatory landscape and helping them avoid being low-hanging fruit for what he refers to as “gotcha claims.”

It isn’t always easy, especially during a time when providers are facing increased government oversight, a challenging labor market, the localization of laws and more.

In this latest episode of HHCN+TALKS, Spinola — the home health, home care, and hospice chair at law firm Polsinelli — offered a wide-ranging overview of the key legal and regulatory issues that should be front of mind for providers working in the home-based care space.

The recording and transcript of the conversation are below.

Joyce Famakinwa: Today’s guest is Angelo Spinola. He’s the home health, home care and hospice chair at law firm Polsinelli. Angelo, tell us a little bit about your career thus far.

Angelo Spinola: I have been practicing law a little more than 22 years now. I guess it’s been 23 years. Before that, I actually was a caregiver, which is one of the reasons that I love the industry so much. I helped pay my way through college, undergrad, by being a live-in caregiver. In those days, I think I got paid $150 for the weekend, a flat rate, which we all know is not allowed in today’s world, but it was great. I think I quickly learned that it takes a special person with a lot of compassion to be a caregiver, of which I am not, and I will be better served supporting the industry in what I do now in the law than as an actual caregiver. I’ve got a real passion and love for the industry and really like the compliance aspects and helping wherever I can.

Famakinwa: Before we get into the thick of today’s conversation, can you start by painting a picture of the current home-based care regulatory landscape?

Spinola: I do think that the regulatory environment is changing somewhat where we have more health care regulation in general and home-based care regulation specifically. I think one of the reasons for that is there’s a real push, and there’s been a push for several years, to try to standardize the licensure process. We know that process is very state specific. Not all states require licensure. There are different elements of licensure by state, and that creates a lot of difficulty for the multi-state providers.

That’s one of the issues. Then I think what is happening is the providers themselves have been focused on effectively creating a bar to entry, making sure that there’s at least minimum standards that will apply to others, so that you don’t have the bottom feeders who are providing poor care and not doing things the right way, and creating some issues really for the industry as a whole. We’ve seen that, for example, with the new licensing laws for non-medical and skilled care in Ohio.

We’ve seen what’s going on in New York, where New York had that moratorium for a long time, and a really robust certificate-of-need process, making it very difficult for new providers to come into the state. What New York is trying to do is really consolidate licenses to make it easier to manage the providers and have larger providers rather than a bunch of smaller providers, so I think we’re going to continue to see that trend develop over the next few years.

Famakinwa: Are there any legislative updates that providers should be aware of in your view? We’ll likely get into this more in the latter part of our conversation today.

Spinola: There are several pending proposed laws that would impact this industry specifically, and everyone was waiting to see what the outcome of the midterm elections would be and how that would impact those proposals. An example would be the PRO Act. The PRO Act would really flip union organizing on its head. And the Domestic Worker Bill of Rights, there’s a federal version of that that is sitting in the House.

Effectively, what we’ve seen with the midterms is that we’re going to remain relatively status quo, which means that Congress isn’t going to get a whole lot done. Any time there’s a disagreement between the Democrats and Republicans, which I hear happens every once in a while, we’re going to be sitting in a gridlock. What that means, I think for the rest of the Biden administration, is that you’re going to see a lot of activity at the executive branch level, and we already have seen that, and I think that’s something that Biden has probably recognized early on, that to the extent he wants to achieve anything from his agenda, that’s going to have to be done directly by the federal agencies and the executive branch.

I think, big picture, that’s what we’re going to be looking at, that and a lot of additional state and city law action, where the states are not waiting for the federal government to dictate what the rules are going to be. The state governments are going to take matters into their own hands, and when you’re in a more liberal state, we’re going to see a lot of pro-employee, pro-union legislation.

Famakinwa: I wanted to ask you about something that you and I spoke about this summer for a Home Health Care News story, and we spoke about this issue of no-hire clauses that we’re seeing in home care a lot. Typically, providers are using no-hire clauses to hold onto staff in a very challenging labor environment. When we spoke, you pointed out that government authorities are cracking down on this. What has this looked like?

Spinola: It’s been very interesting and there has been a great deal of activity around this. Traditionally, when you think about restrictions on worker mobility, preventing an employee from working for a competitor or taking clients, taking other employees, that’s normally measured through restrictive covenants, and that’s a completely state-specific area of law. Every state has different restrictive covenant rules. We have seen the states really start to button down those rules and make it harder to restrict worker mobility.

Again, it follows that blue-red dichotomy, but you’ll see states like Connecticut, California, Illinois with very challenging laws that don’t allow providers to restrict their workers very much. That’s always been the case, but the limitations are getting more severe, where you can only use certain types of agreements with people who are exempt or make a certain level or serve in a certain role for the business. That has been the trend.

What’s new is now the government is getting much more involved in what really has traditionally been a state issue. The government is taking the approach of getting into worker mobility and a lot of other things, wage fixing, everything else. On the worker mobility front, the focus has been on what they refer to as no-poach agreement, making some type of an agreement, sometimes you’ll see it between businesses or a client and the agency, where there’ll be an agreement, “If you don’t hire my employees, I won’t hire your employees,” without the employee being a party to the agreement.

That’s what the no-poach part is, is that you’re agreeing not to poach my employees, but the employee is not even aware that that agreement exists, and that used to be a pretty common term in franchise agreements, where the franchisees would agree not to hire from each other, it was part of a franchise agreement. The FTC focused on that several years ago, most franchisors eliminated those provisions.

Now what the Department of Justice is looking at, the FTC, in some cases, the DOL in coordination with the FTC, they’re looking at client service agreements and direct hire provisions in client service agreements where the agency and the client are agreeing that if the client hires that caregiver away from the agency, there would be a fee or a penalty associated with that. We’ve seen places like Connecticut and California, and in some cases, like I mentioned, even the FTC, being focused on those provisions and arguing that those provisions are really just a wolf in sheep’s clothing, another way of getting to a restrictive covenant that is banned by the state.

That’s been really fascinating. We’re working on some matters with the California DOJ right now, and I think part of the issue is that the government doesn’t understand the industry, doesn’t understand how much of an investment is being made by the agency into the caregiver and vetting the caregiver and training the caregiver. To just allow a client to take that relationship away and cut the agency out shouldn’t be permitted. We’ve got some work to do, but there’s been a lot of activity on that front, which is unique. I hadn’t seen that happen in my career, but for the last year and a half or so.

Famakinwa: You touched on this a little bit, but in October, you also spoke to [HHCN] about the Department of Labor’s proposed rule. It was to have a major impact on the test used to decide if someone’s an independent contractor or an employee under the Fair Labor Standards Act. At the time you warned providers to watch this closely. Talk to us about why this should be top of mind for providers.

Spinola: No. 1, with the changes to the independent contractor rule that are being proposed. And it’s a fascinating history, because the test that applies for DOL purposes, for FLSA purposes, Fair Labor Standards Act, which is the law that governs the payment of overtime. And if somebody is a W-2 employer or a 1099 contractor, it’s called the Economic Realities Test, and that Economic Realities Test has been around for a while.

What has happened is as different administrations have come in, they’ve attempted to modify the Economic Realities Test by either strengthening it or softening it, depending on who you’re looking at. The Trump administration tried to really soften that test and make it easier to utilize independent contractors. The real focus there wasn’t on home care, it was on the gig economy generally. Then you have Biden come in and he tried to repeal the Trump rule, which a court ruled that he could not do. They couldn’t repeal that rule, it has been in effect until this new rule comes in that is going to make it more difficult to utilize independent contractors.

Why I mentioned that is it’s something that all of the industry should focus on. Some providers are saying, “Hey, this is great. From our perspective, this is going to make it harder for registries to compete against us and offer a lower labor price point because they won’t be able to treat these workers as independent contractors and they’ll have to pay overtime,” and so on, and so forth. That Economic Realities Test, the one that we’re talking about, that’s the same analysis that applies to joint employment, and joint employment is a major initiative of the Biden administration, just like it was with the Obama administration.

We’ve seen the National Labor Relations Board propose new joint employment rules that would apply for union organizing purposes that the industry has really rallied around and focused on and opposed, but that same thing hasn’t happened with the independent contractor rule because most of the industry views that as just an independent contractor rule. They don’t realize that’s also going to impact the joint employment standard, which will have a major impact if adopted.

These rules are examples of rules that don’t require congressional approval, which also subjects them to challenge to the extent they depart too much from the actual existing standard. The reason we’re not seeing so much opposition around independent contracting is there’s not a recognition that, “Oh, that’s going to impact joint employment as well and make it harder for franchise models, staffing agencies, personal liability for owner operators.” It has some widespread effects that I don’t think have fully been recognized just yet.

That’s one to really, really keep an eye on. Not to mention the virtual marketplaces and the registries and what those standards are doing is they’re effectively changing to an indirect control model, so that when you look at the NLRB test, you compare the NLRB test with the DOL proposed rule for independent contracting and what they’re saying is that if there’s reserved authority to control a worker, reserved authority to control workers of another statutory employer, that’s enough to establish that you may be an employer, even if you’re not exercising that control, and that has not been the historical test. That’s one of the major changes there.

Famakinwa: More broadly, are we seeing an increase in government watchdogs oversight of home-based care, and if so, how?

Spinola: We certainly are. To me, this was very foreseeable. I think Biden and his advisors recognized that many of the initiatives that he would like to achieve are only going to be achieved through his own appointees through the executive branch, so what we saw is as soon as he came into office, a real focus on building up those arms of the government. You look at, for example, the DOJ. The DOJ has added a ton of investigators. I think they were targeting 120 attorneys to be added to the DOJ. I don’t know where they are on that target. 900 FBI agents. We saw what the IRS did around IRS auditors increasing those numbers, extending statutes of limitations.

One of the, I think, issues that a lot of folks are dealing with is the employee retention credit, and that program, that statute of limitations was expanded from three to five years. The DOL identified it was either 100 or 150 investigators that they wanted to add to their ranks. They’re in the process of doing that. What you’re basically seeing is Biden is building his army, and that’s the army around enforcement. The DOL in past administrations has been more focused on providing guidance, giving us guidance, saying, “Hey, this is the way to do things, not to do things.” Now, they’re out conducting investigations.

They’re out conducting investigations, that’s what the IRS is doing, it’s what the DOJ is doing. We have seen that for sure. You look at the 2021 statistics on the number of False Claim Act investigations, it’s the second-highest that we’ve had since the year 2014. And in 2021, it was $5.6 billion that was collected in settlements that were reported by the DOJ, and $5 billion of the $5.6 billion was related to the health care industry. Not only is there an increased focus on government enforcement, but it’s government enforcement specifically around health care and home-based care in a lot of these areas.

Famakinwa: What would you say that providers should be doing to make sure they’re on the right side of things?

Spinola: It’s compliance, compliance, compliance. I think one of the challenges that we’ve had in the industry and one of my real focal points for our industry is around compliance. And we have had situations, I think, because it’s a fractured industry. There are so many smaller agencies. There’s so many regulatory components and requirements, very unique labor laws that apply, and it’s a challenging environment to be compliant in the sense that there’s normally different rates of pay at issue. There are these unique regulatory obligations.

You are trying to manage a remote workforce, they’re not under your nose, they’re not showing up in a hospital like nurses do where you can manage them and see what they’re doing. There’s just so much to it. You couple that with the numbers and how small folks are, and being a little, I hope I’m not offending anybody here, but not as technologically advanced as some other industries. I think we’re getting there. We’re starting to put some tools in place, but we haven’t traditionally had the most sophisticated tools.

It’s created a lot of compliance issues, and I think that’s one of the reasons there is so much of a focus on our industry, is that there is a belief within some arms of the government that home care doesn’t really want to get it right. That it doesn’t matter how much guidance they put out there. And when you look at the Department of Labor, when the Department of Labor changed the exemptions for live-in and companionship in 2015, they put out a ton of guidance, FAQs, webinars, they hosted meetings, white papers to explain what the rules are, how to do travel time, you name it, they’re putting out a lot of guidance.

I know from talking to some of the careerists there, that they feel that there are at least some providers that don’t care. That it’s not that they’re unaware, it’s that they’re unwilling. That was what I was talking about before when we were talking about the regulatory environment and providers actually saying, “Hey, when it comes to licensing, when it comes to minimum standards, we want that. We want there to be a cost for you to buy into our state and to have a license because we want to get rid of riff-raff that’s going to drag the industry down for everyone.”

We’ve seen so much focus on the industry. I think that we’re going to see that continue for at least the next several years until the government starts to feel that we’re paying attention and it’s more going to be of a, “Hey, we’re going to slap a hand, we’re going to put out a press release and tell all of your peers what we did to you and how much we recovered in civil money penalties,” and in some cases, with the DOJ, you see that they’re moving for criminal sanctions, they’re looking for jail tim, for wage fixing type things and antitrust issues, things like that. They’re trying to make an example out of some within the industry to see if that will have a bigger impact than the guidance that has been provided in prior years.

Famakinwa: The localization of laws when it comes to home-based providers, what they can and can’t do has been a pain point. Can you give an example of how this has become troublesome?

Spinola: Just to recap the localization of laws, what that means, is, again, because of the gridlock in Congress, we have seen states, and not only states, but cities and municipalities pass all their own laws. They’re passing their own laws, and in many cases, those laws are industry agnostic, a paid sick leave requirement that will apply to everyone. Those things get covered a little bit better in the press by attorneys, by legislators. You hear about that more.

If there was going to be a federal minimum wage increase, we would know, we’d hear about that. In addition, you have this industry focus where there are laws that are not only local, but narrow in the sense that they only apply to home care. An example of that, we talked about minimum wage generally. New York just increased the minimum wage by $3 only for home care, and you don’t hear a lot of coverage about that, which means that it doesn’t always filter down to the provider.

The provider ends up in a situation where something has changed, law has changed, the provider doesn’t know, and now you’ve got the plaintiff’s bar coming in, sometimes the government, but generally in those situations it’s lawyers that represent the caregivers, bringing suits saying, “Hey, you didn’t do this right,” and the provider is left flatfooted — didn’t even know that it happened. One of our initiatives is really to try to track the industry-specific stuff that is happening and make sure everyone is aware of it.

Otherwise, you end up in a situation with, I call them “gotcha claims,” where the provider gets hit on something that they didn’t even realize was going to be an issue. You asked for some specific examples. I mentioned the New York minimum wage applying to domestic workers only, and we’ve had a lot of providers thinking that that’s only for Medicaid providers and not private pay, which isn’t true. They’re confused about how that impacts things like spread of hours, and the fringe benefit payments that are required in New York leads to a lot of complication.

In addition to laws like that, you’ve got things like the Domestic Worker Bill of Rights that are being passed at a state and at city level. Seattle has got one. Philadelphia has got one. Chicago has got one, or Cook County. New Jersey has one that’s proposed. The Domestic Worker Bill of Rights, just like the federal one that’s stuck in Congress right now, that’s probably not going anywhere anytime soon, even though Kamala Harris is one of the sponsors of that. At a state level, at city level, these things are passing.

Again, providers, they’re not always aware of them, and some of the requirements are things like a day of rest or notice provisions for live-ins before you terminate their employment or employment agreements or paid sick time or meal and rest break requirements with penalties associated with them. Say a California provider, they’re used to that stuff, but somebody in New Jersey, or somebody in one of these other states that isn’t accustomed to needing to have an employment agreement with their workers, they might not do that.

Wage theft notices, these sort of things where you’re either doing them right or you’re not, what you’ve got on your pay stub, you’ve either got it right or you don’t, and it leads to what’s effectively strict liability situations where there’s a fine every time you fail to provide the agreement or the notice, or you’ve got a pay stub that’s issued with the wrong information on it, that’s a violation, there’s a fee that associates with it, and those fees multiply very quickly and add up to a whole lot of money and those providers get remarkably frustrated when they learn that, “You’re telling me, if I had just provided this form, or I had notified an employee of what the wage scale is of the job, what the range is of what they’d get paid, that I wouldn’t have $3 million in liability?”

It’s a challenging thing. And to get back to your prior question of what do you do, if you are being attacked on all sides, you’ve got the government over here and the plaintiff’s lawyer is over there, and the union is over here and they’re trying to make a lunch of you, what you’ve got to do is you’ve got to focus in on what steps you need to take to make sure that you don’t fall victim to these kind of issues. Let me make sure that I’m aware, I understand what the laws are in my state, in my city, at a federal level, that I’ve done everything I can to protect my organization. I’m not that low-hanging fruit that these folks will pick off, that’s going to be somebody else, maybe a competitor.

Famakinwa: I wanted to ask you, what are some other key legal issues that home-based care providers should be paying attention to, and why?

Spinola: Another one that we’ve seen an increased focus on is the referral relationships. I think that there’s a rise again of state law that is broader than federal law, so I think a lot of providers believe that as long their reimbursements are not funded by a government program, they don’t need to worry about how their referral relationships are set up, and that really isn’t true in several states.

Florida is a great example of that, where there are some really draconian penalties for certain types of referral relationships. I think that’s a focus, anything that is happening right now across other areas where we’ve seen the government involved. I briefly mentioned wage fixing. There were some providers in Maine that were prosecuted criminally when the Medicaid rates went up.

I think it was four businesses, they worked amongst themselves, allegedly, this was the claim, to maintain the same wage rate, and basically said, “Our margins aren’t high enough. If you agree not to pay your employees more, we’ll do the same thing,” and now you end up in a wage fixing dilemma. Those are the kind of things that the government is looking at. Worker mobility, wages, referrals, false claims, antitrust, those kinds of issues.

I want to mention the employee retention credit because that’s a very big thing in our industry. It’s the concept that you can get credit against the taxes that you’re paying to, or on behalf of employees payroll taxes to the extent you were subject to a government shutdown during COVID, or your revenues were reduced by a certain percentage.

The way most providers are qualifying for ERTC credits is through the government shutdown and you’ve got these vendors out there that are assisting the provider in applying for those credits and taking a contingency fee, or a pretty significant fee to provide those services. And the IRS has been pretty vocal about those vendors, about the plan to investigate several of those vendors, to make sure that what they’re doing is on the up and up, because they have a financial incentive to help a provider apply for those credits in some instances, at least from the IRS’ perspective, when they don’t actually qualify.

Then that’s where you saw the statute of limitations move from three to five years, that’s a really clear indication of what the IRS plans to do here. They’re going to be investigating. They’re going to investigate and determine who actually qualified for that credit and who didn’t, and if you didn’t qualify, there’s going to be penalties that apply. I think that we’re going to see an increase in those kinds of investigations.

In many cases, we have had a government shutdown that partially or fully affected the ability to provide care and run the business, but you want to make sure that you’ve got good guidance on that, good evidence to establish, “Here’s where the government shutdown occurred. This is how it affected my business. This is the time period that I’m applying for the credit when we were shut down,” and make sure that you can connect all the dots so that if the IRS does come back and investigate, that you’ve got the backing for the application and I would not solely rely on a vendor who’s applying for the credit to do that. I think that’s an area where you need attorney support, or, in some cases, accountants can do it.

Famakinwa: In your view, what are some of the more common and avoidable mistakes that you see home-based care providers make?

Spinola: Going back to those “gotcha claims,” those are the ones that frustrate me the most, and I think maybe talking for a second about how it is that these cases come about. I’ve got 10 different class actions in California, all about the same thing. It’s three or four law firms that are bringing those cases and they’re generally uninformed about the industry. They’re looking for meal and rest break penalties.

What happens is a plaintiff’s lawyer will pick up on a theory, a lot of times it’s a new area of law that not everybody is focused on, then they’ll apply that theory across everybody in the business. That’s actually how I got into this business at first, was in home health pay per visit claims. One firm got really heavy into pay per visit. Everybody was paying the same way on pay per visit and they’re mixing hourly and flat rates in some form or fashion. We would always talk about that being a compliance concern to our client base and they’d say, “That’s what everybody does. Everybody does it that way.”

Same thing with day rates for live-in, I think we’re getting better. I think we’ve probably at least got more than half the industry over to hourly pay, but for years and years, the argument was that’s how everybody does it. What that creates, when you have a plaintiff who comes up with an idea of a case, now they have a cottage industry. Oh, and that’s what happened with pay per visit, these really reputable attorneys out of D.C., came after Gentiva for it. Then after Gentiva, they went after Amedisys, and then after Amedisys, it was Maxim and LHC Group. Just about every home health provider has been through that drill.

Now, everybody’s on salary, plus we’re doing it in a compliant way, but that spread through the industry like a wildfire because the plaintiff’s lawyer doesn’t have to do anything. Once they’ve researched the issue and had some success on one case, figured out that they’ve got a pain point on one case, all they have to do now is change the names. We see that all the time with wage theft notices with background checks that we’re using the right consents and notices for background checks, the pay stub stuff.

Those are the ones that really frustrate me because they’re not difficult to resolve, you just have to know about them. On-call premiums and putting them in the regular rate for overtime purposes. Things like that. That’s a review of your pay codes and determining, “Hey, what pay codes do you exclude from overtime with non-exempt employees, and are they all excludable, or are some of them non-discretionary bonuses?” Generally, a lot of things can’t be excluded, so it’s just steps like that, really taking a proactive approach to analyzing your own business.

Do effectively what would be like due diligence in a transaction, do that now before somebody finds one of these things, which is there for everybody. Very, very rarely will I look at a business and not find some problems, and I just think that sometimes we have such a focus on our operation, which obviously are extremely important, that we miss some of what should be low-hanging fruit, something that can be resolved. One more pitch I will say on compliance that I always say to my business people that are listening in, because we’ve got, there’s always three kinds of people in an audience. One hears you and they go out and do it immediately.

They say, “Okay, I do not want to be one of those examples. I’m going to go, I want an internal audit. I want you guys to look at this. I want you to fix anything that’s broken, or at least identify it so we can come up with a schedule to fix it.” Then others that are on the fence, and then a third group, they’ll never do it, no matter what you say, no matter what you do, you can’t get them to focus on it. Their view is, “Look, if you’re going to get me, you’ll get me, I’m not doing it.”

What I always tell that group, because generally, those are the entrepreneurs, “You are going to have to look at this sooner or later. You can do it with me now, or whoever, or when you go to sell your business, we’re going to come in representing the buyer and we’re going to do the exact same thing, we’re going to run through, look at all these issues and say, ‘Okay, here’s a liability. Here’s a liability.’ We’re going to map it out and figure out what is the risk here, what’s the exposure, and that’s going to either change the enterprise value of the transaction, or there’s going to be an escrow that rolls off over time or some kind of indemnification, but these things that we’re talking about, you are going to have to deal with them at some point or another, and our hope and goal is that providers will look at these issues before the cloudy day, before the storm. What ordinarily happens is it comes at the end.

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