The following blog is a synopsis of our recently released white paper, "Winning Strategies for Home Health Agencies in Value Based Care". To request a copy of the full White Paper, contact email@example.com.
Value Based Care Is In Your Future
Any uncertainty about the future of value-based payments was recently laid to rest after HHS Secretary, Alex Azar, MD, spoke to the Federation of American Hospitals earlier this month. Azar stated unequivocally that "there would be no going back to a system that paid for procedures rather than value." in 2016, 57% of total US health care payments are tied to Alternative Payment Models (APMs) and pay-for-performance.
Is Your Agency Positioned to Thrive Under Value Based Payments?
In the evolving health care financing and delivery system, setting a course for long-term success is increasingly challenging. This is particularly true for Home Health Agencies (HHAs) following rebasing payment cuts and with looming value-based payments and the possibility of new Conditions of Participation (COPs).
Winning in this environment will require more than being a value leader in the traditional sense of the word. Value-based care will challenge HHAs to rethink their traditional role in the health care ecosystem, to play a larger role in coordinating care, and to build new systems and technology for data collection and sharing, analytics and financial modeling. It will challenge HHAs to work in partnership with payers and other providers. Business as usual is not an option.
Five Key Strategies for Success
There is no one size fits all magic formula to ensure sustainability. The same approach to value based payment will not ensure success for all agencies. Numerous market specific and agency specific factors will affect your agency's long term sustainability. It will be critical to understand trends in your specific market to focus and guide your strategy development and implementation. With this in mind, however, there are five key strategies that are important components of your value-based payment transformation plan.
1. Manage Your Value Quotient
Your value quotient is a combination of quantitative and qualitative factors. It requires a comprehensive assessment of your readiness for value-based payments. Readiness is defined as both an assessment of your competencies as well as an assessment of your market position including cost, quality, and overall financial health. This should lay the groundwork for a roadmap to sustainability.
2. Know Your Risk Threshold
How much risk can you bear and remain sustainable overtime? This is a serious question and not so easily answered. It will require understanding your financial stability and your positioning versus competitors as well as the key drivers of your position and how to affect them. In addition, you will need to understand the variety of APMs and how each might impact your bottom line.
3. Redefine Payer Relationships
Payers are looking for a number of things in their value based partnerships. While value is top of the list, there are a number of other considerations as well including at-risk payment models, network alignment, and collaboration to reduce the administrative burden of network management and reporting requirements.
4. Develop Provider Partnerships
HHAs have the opportunity to increase value through a number of potential partnership arrangement. Your agency should:
Think outside the box and disrupt the status quo by: employing new technology, implementing chronic conditions management programs, becoming a focal point for managing the PAC continuum, and providing support to payers in managing social determinants of health.
Circumference Consulting can help your agency traverse the path to sustainability. For more information or a free consultation, contact firstname.lastname@example.org.
Provisions in the February 1 Draft 2019 MA and Part D call letter could open the door for Medicare Advantage (MA) plans to begin covering services to support aging in place by expanding the definition of supplemental benefits.* Aging in place is defined as the ability to live in one's own home and community safely, independently, and comfortably, regardless of age, income, or ability level. Over 90% of individuals age 65 and over, estimated to be 71.5 million Americans by 2030, indicate that they want to age in place. However, aging in place presupposes the coordination of a number of factors, predominant among them are health care, personal care services and social determinants of health.
While today Medicare pays for a limited number of in-home skilled care visits, it does not currently pay for those personal care services to support activities of daily living or home improvement initiatives needed to make the home environment safe. When these services are covered, they are paid for by Medicaid under state waiver programs or state plan amendments and, as such, are restricted by income requirements and often limited to certain categories of Medicaid beneficiaries.
State studies have repeatedly shown both cost and quality of life benefits of in-home care support services for the covered population which is predominantly dual eligibles. An AARP report on 38 state studies of HCBS concludes that "the studies consistently provide evidence of cost containment and a slower rate of spending growth as states have expanded HCBS". ** Furthermore, the studies found much lower per individual average costs for HCBS compared to institutional care.
The Bipartisan Budget Act (BBA 2018) also moved in this direction by defining benefits to chronically ill members that "have a reasonable expectation of improving or maintaining the health or overall function of the chronically ill enrollee and may not be limited to being primarily health related benefits".
With these new CMS policies, MA plans have the opportunity to move beyond the rhetoric of social determinants of health and to take action with a supplemental custodial benefit that will enable seniors to remain in their home for as long as possible by providing supporting services to help with activities of daily living. The benefit would integrate with care coordination to reduce readmissions, improve quality and lower spend by supplementing home health services. Under the draft call letter, the benefit could be priced in the MLR calculation as a new benefit and would support member retention and growth. Today companies such as CareLinx, a nationwide firm with 250,000 caregivers, offer plans the necessary supportive data and technology to make personal care services an important part of a comprehensive care management strategy. As such, these services have the potential to reduce overall nursing home costs, avoid readmissions, increase member satisfaction, and improve outcomes.
For more information on the potential of a supplemental personal care benefit and potential design options, contact email@example.com.
* See Advance Notice of Methodological Changes for Calendar Year (CY) 2019 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies available at: https://www.cms.gov/Medicare/Health-plans/MedicareAdvtgSpecRateStats/Downloads/Advance2019Part2.pdf
** AARP Report, State Studies Find Home and Community Based Services to Be Cost-Effective, available at https://www.aarp.org/content/dam/aarp/research/public_policy_institute/ltc/2013/state-studies-find-hcbs-cost-effective-spotlight-AARP-ppi-ltc.pdf
Value Based Payments are Flourishing
Back in 2015, CMS set a goal to tie 30% of Medicare payments to alternative payment models by the end of 2016. The goal was met 11 months early. The 2016 Survey of America's Physicians: Practice Patterns and Perspectives found that 42% of physicians polled reported having their compensation tied to quality or value. The Health Care Transformation Task Force released similar results in 2016 with 41% of member providers and payers involved in value-based contracts. All of these statistics indicate that value based payments are becoming an accepted alternative to fee-for-service and will continue to grow both in the government and private sectors.
Home Health Care is a Value Enhancing Strategy
While value based payments proliferate, numerous studies have confirmed what many in the industry already knew. Home Health can play a significant role in a value improvement strategy. The latest report released by the Lewin Group analyzed home care providers participating in the CMS Bundled Payments for Care Improvement (BCPI) initiative and concluded that for congestive heart failure (CHF) patients, home health agencies (HHAs) achieved a $970 relative reduction in CHF payments for qualifying hospitalizations and the 90 days post discharge. A similar study by Dobson Davanzo and Associates examining CJR bundles concluded that when home care is the first setting after a hospitalization costs were reduced by $500.
The Implications of These Trends for HHAs
In combination, these two above trends mean changes for Home Health Agencies in the near future. While there will be significant opportunities to grow the business, there is also the potential for significant market consolidation and agency failures. As payers rely more on home care providers, there will be increasing oversight and pressure to accept some degree of risk and payments tied to performance. Agencies that can't demonstrate that they add value, will be passed over for those agencies that can as payers increasingly turn to narrow high performing networks.
The clock is ticking. It is imperative that agency's be prepared to meet the requirements of value based payments and to be a successful at-risk partner. Not only will agencies need the competencies to effectively manage patients in a cost-effective manner, have requisite management systems and technology, set sustainable rates and distribute savings, but they will also need to be able to prove they are a value added partner.
Becoming a Value Added Partner
Organizational readiness assessments are one component of successfully moving your organization to value based payments. These assessments will help you to identify strengths and gaps in current competencies and areas for improvement, but they are only one piece of the puzzle. In addition, a value added HHA must be able to clearly define its value. As high performing narrow networks become the norm, an HHA must be able to demonstrate that it is a better value partner than others in the marketplace. In short, it must have a compelling value-added story supported by data and the ability to continually improve performance. Thus, a second necessary component is a performance readiness assessment to evaluate the agency's cost and quality performance in comparison to other HHAs in the marketplace.
Every agency needs to know both its organizational readiness and its value added performance readiness in order to win in the value based payment health care market. It needs to be able to answer the following questions:
At Circumference Consulting LLC, we can help your agency answer these questions and be a winner in the value based payment marketplace. Our state of the art Organizational and Performance Readiness Assessment process can help your agency identify strengths and gaps and begin to define the parameters for value based pricing. In addition, we can help you to define your value based payment strategy and action plan, develop value based rates, develop value based partnerships, and institute an ongoing performance management process to ensure continued success. For more information contact us at: firstname.lastname@example.org
Social determinants of health (SDOH) are the new holy grail of population health management. Every health care conference agenda has sessions focusing on the topic. Why the new emphasis on social determinants and what can we do to ameliorate their impact on health care costs and outcomes?
What's Driving the Emphasis on Social Determinants
Value based care models are driving a focus on social risk factors that contribute to decreased revenues and higher costs for many value based care entities.
Today, home based care providers are serving a disproportionate share of Medicare beneficiaries at risk of experiencing the adverse effects of social determinants on overall health outcomes, but they are an underutilized resource to manage SDOH. Data on Medicare patients using home health services indicate that home health agencies serve a higher percentage of low income beneficiaries, dual eligibles, and individuals living alone than the overall Medicare population.
While home care providers routinely perform a number of services that support social determinants of health initiatives such as: assessments identifying some social determinants, patient education, patient and provider communication, coordination of community based services, much more could be done.
Enabling the Home Care Response
As the evolving health care model continues to shift more patients from facility based settings to the home, the intersection between home care and social determinants will become increasingly important in managing the impact of social determinants on at-risk populations and improving both costs and outcomes.
To effectuate the potential of home care to manage social determinants, however, will take the combined efforts of public policy, payers and new entrants.