Amid scrutiny of a master’s degree, Humana remains focused on growing home health

After the Centers for Medicare and Medicaid Services (CMS) issued a final rule that poses a significant risk to its Medicare Advantage business, Humana Inc. (NYSE: HUM) insisted there was no need to panic.

“The rule does not provide the details needed to fully understand the potential impact of future reviews,” Humana CEO Bruce Broussard said Wednesday during the company’s fourth-quarter earnings report. “We are disappointed with the final CMS rule that did not include a fee-for-service assessor in the process, which we believe is necessary to determine the appropriate payment amounts to MAs. We are considering all of our options to review or challenge this recognition and gain clarity on our compliance obligations. In doing so, we strive to work productively with the CMS to ensure the integrity of the program.”

All the while, the company has continued to advertise its rise in home health.

CenterWell Home Health’s paid in-home hospitalizations increased 9.1% year-over-year and 6.3% year-over-year.

CenterWell Home Health, formerly Kindred at Home, has over 350 locations in 38 states.

“This is in line with our expectations for mid-digit growth,” Humana CFO Susan Diamond said by phone.

The company also announced new leaders. Most important is the hiring of Dr. Sanjay Shetty as President of CenterWell. Medicare President George Renaudin will also lead Humana’s Medicaid efforts.

As for Shetty, he is from Steward Health Care System, where he is currently President. He will begin his new duties on April 1.

In her current role, Shetty leads the day-to-day operations and strategy of Steward, which is a nationwide integrated healthcare system with 39 hospitals, a multidisciplinary medical team, and an accountable care organization.

“This newly created role comes as we continue to significantly expand our CenterWell capabilities by strengthening our payer agnostic platform and integrating the clinical experience for patients on the CenterWell platform,” said Broussard.

While service fees remain an important business for CenterWell, the company is starting to focus more on MA-based home health care. He is in a good position to do so.

“While we have strategies in place to continue to receive a share of Medicare’s fee-for-service, we recognize that this market is shrinking due to the growing penetration of Medicare Advantage,” Diamond said. “Accordingly, our projected increase in hospitalizations for 2023 reflects a slight decline in Medicare fee-for-service hospitalizations year-over-year, more than offset by strong growth in Medicare Advantage.”

Humana has consistently strived to have 40% of MA members committed to its value-based model by 2025.

By the end of 2023, the company says it will have one million more members under this model. This includes patients at home.

“In the home, we have continued to expand our value-driven model that coordinates care and optimizes costs for home care services, OMOs and infusion services,” Broussard said. “We currently support approximately 15% of our MA members with the model, expanding coverage to an additional 433,000 members during the fourth quarter. We remain on track to reach approximately 40% of our MA members with a value-based model by 2025.”

Last August, the company announced that it had officially completed the sale of its hospice and personal care business, Kindred at Home, to Clayton, Dubilier & Rice (CD&R). CD&R specifically purchased 60% of these assets.

Because of this, Diamond noted that home health care revenues will fall next year.

She also said the focus is on driving organic growth, especially in primary care and home health care, but has also left the door open for future M&A in those areas.

“We will continue to prioritize investments to drive organic growth,” Diamond said. “From an M&A perspective, we remain focused on expanding our CenterWell capabilities, with a focus on growing our core and home businesses.”

Overall, the company’s fourth-quarter revenue was $22.4 billion, nearly 7% more than last year. For the full year, the company earned $92.9 billion, up 12%.

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