Home Health Care News, Home-Based Care Providers Are Learning When To Walk Away From Medicare Advantage Contracts
“You’ve got to know when to hold ’em, know when to fold ’em, know when to walk away.”
Yes, these are lyrics to the enduring Kenny Rogers hit song, but they are also reflective of an idea more and more home-based care providers are applying to their negotiations and relationships with Medicare Advantage (MA) plans.
Jet Health has first hand experience with walking away from a relationship with a big MA plan.
“As a regional provider of home health services, we had to look at those margins and how we best deploy our nurses and our therapists,” Jet Health CEO Stacie Bratcher said Monday during a panel discussion at the Home Care 100 conference in Orlando, Florida. “We were under water with one of our large providers. We had to decide, do we stay in-network with some really poor rates that were under what our per-visit rate was, or do we exit?”
The Fort Worth, Texas-based Jet Health is a home health, hospice and personal care provider that operates in Texas, New Mexico, Colorado and Idaho.
Jet Health leaders asked the MA plan for a rate increase multiple times and were denied multiple times. This prompted the company to exit the relationship, according to Bratcher.
“In that negotiation process, they did come back to us and say, ‘Well, we really value you as a provider, so we’ll give you …’ basically enough to keep us on the hook,” she said. “It was an extremely difficult decision for us because it was a market that we had been in for a very long time — referral sources that depended on us, patients that depended on us.”
It came down to becoming a smaller – but more profitable – business versus continuing to take on these patients on a large scale while losing money.
Now, for Jet Health, it’s been important to keep cost stability top of mind when forming payer relationships.
“Really looking at how comfortable we are with our cost stability — is that going to change in the future, because when you take on these risk contracts, you’re not going to see that upside for a year or more,” Bratcher said. “We don’t even recognize that revenue as revenue, and we defer that until a later point in time.”
Amedisys takes a stance with MA
In October, Amedisys (Nasdaq: AMED) was very public about its stance on not working with payers that fail to see the company’s value, and then-CEO Chris Gerard even urged MA plans to “take note” in reference to the company’s deal with CVS Health’s (NYSE: CVS) Aetna.
Earlier this month, returning CEO Paul Kusserow suggested that Amedisys’ deal with Aetna be used as a blueprint, while also taking aim at conveners.
“Let’s talk in case-rate deals like we did with Aetna, let’s go more at risk on things and get them to migrate further,” Kusserow said during the J.P. Morgan Healthcare Conference.
Andrew Galbierz — senior vice president of payer relations at Amedisys — further reiterated this sentiment.
“It’s really about knowing the assets that we have, which are our nurses and our people, and really being strategic about how we deploy those assets,” he said during the Home Care 100 panel discussion. “As it relates to Medicare Advantage, we’re going to deploy those assets based on the partners that are willing to work with us and that are willing to compensate us fairly for what we do.”
The Baton Rouge, Louisiana-based Amedisys’ service lines include home health, hospice, palliative and personal care. It also has home-based, high-acuity care capabilities through Contessa Health, which is a part of its network. That network includes 21,00 employees and 547 care centers throughout 36 states.
When negotiating contracts with MA plans, it’s important for providers to understand the impact that home health has on the total cost of care, according to Galbierz.
“As [we] start these value-based conversations, [we] think about it from the perspective of, we offer services to key patients in their home,” he said. “That, obviously, keeps them out of the facilities or higher-cost settings. From a strategic standpoint, it’s about working with the plans that understand that mindset and understand the value that we bring as a home health agency.”
It’s also important for providers to understand the payer, according to Katy Lanz, principal advisor at TopSight Partners, a Pittsburgh, Pennsylvania-based clinical design and innovation firm.
“They’re very different, and their needs are very different,” she said during the discussion. “Some have multiple vendors solving lots of issues, and some have a budget that they want to isolate just towards certain percentages of their Medicare Advantage population. You have to know who you’re talking to and understand what problems they’re facing, and then see if it fits within your capability stack.”
Ultimately, Galbierz believes providers should take on a “my network versus their network” mentality. In other words, what MA plan does the provider want in its portfolio?
“It’s very important to be able to recognize moving from that commodity into that scarce resource, and forming those partnerships that are going to bring the most value,” he said.
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