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 firstname.lastname@example.org.
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 email@example.com.
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 firstname.lastname@example.org.
* 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