Fixing the ‘Toxic’ Home Health-Medicare Advantage Relationship

Home Health Care News | By Andrew Donlan

The home health industry’s battle with Medicare Advantage (MA) plans for fair rates has gone from a few stakeholders saying “the quiet part out loud” earlier this year to nearly every major provider in the country talking about the issue with regularity.

My colleagues and I have covered the topic extensively. But we’ve moved beyond the question of how providers feel about MA rates for home health and moved onto the next: How can the problem be solved?

Taking a step back, here are a few of the certainties we know:

  • All signs point to MA being the dominant insurer type among Medicare beneficiaries by the end of the decade.
  • MA pays far lower rates for home health services compared to fee for service (FFS). Encompass Health Corporation (NYSE: EHC) said this week that MA rates are at a 40% “discount” compared to FFS. Intrepid USA Healthcare Services confirmed that number was about in line with its experience – and even suggested the rates were sometimes lower than that.
  • Two companies with significant market share in MA – Humana Inc. (NYSE: HUM) and UnitedHealth Group (NYSE: UNH) – have already – or are in the process of – acquiring two of the largest home health providers in the country in Kindred at Home and LHC Group Inc. (Nasdaq: LHCG), respectively.
  • Some have described MA as the federal government’s “darling.” But the Office of Inspector General (OIG) recently published a report condemning MA organizations for limiting beneficiaries’ access to necessary care and denying payments to providers for services that are covered under Medicare and MA billing rules.

“It’s been a challenge because, not only is the rate lower, but the processing of the claims is 6 to 8 times harder for your back office revenue cycle,” Intrepid USA CEO John Kunysz told me. “They just put in so many hurdles.”

Based in Texas, Intrepid USA providers home health and hospice services, with over 60 locations spanning across 17 states.

In this week’s exclusive, members-only HHCN+ Update, I explore the tumultuous relationship between the home health industry and MA, and also try to highlight some potential solutions for the road ahead.