Home Care Providers Closely Watching Medicare Benefits: NAHC President

Home health care providers should keep a close eye on the growth and popularity of Medicare Advantage managed care plans in 2023.

This was one of many messages from Bill Dombey, president of the National Association for Home Care and Hospice (NAHC), during Wednesday’s webinar with Netsmart.

“There is a strong commitment to privatize Medicare and offer it through managed care plans,” Dombey said. “Although the heyday may be a bit off, and some of the people who have long been supporters of Medicare Advantage plans are taking a closer look at how they work.”

Dombey cited a Medicare Payments Advisory Panel (MedPAC) presentation last week that showed that the cost of enrolling people in Medicare Advantage plans exceeds the likely cost of health care they would receive in a traditional Medicare program.

“106% of that cost in the cumulative sense,” Dombey said. “The future in the present moment is not a speeding train, but a full speed one.”

Many found it difficult to ignore the marketing of Medicare Advantage managed care plans, which undoubtedly gave way to the popularity of the MA.

“Apart from the workforce megatrend and all that comes with it, you have to recognize that managed care is on the rise,” Dombey said. “Joe Namath, Jimmy Walker and Bill Shatner have had some success getting people into a Medicare Advantage plan instead of traditional Medicare. We continue to see the proportion of traditional Medicare patients receiving home care declining as the number of Medicare Advantage enrollments grows.”

Fewer people enrolled in traditional Medicare today than in 2014, according to the NAHC. This trend is partly due to the sudden rise in Medicare Advantage.

“According to the latest data, we are knocking on the door to have 50% of Medicare members in the traditional program and 50% in the Medicare Advantage program,” Dombey said. “8.8 million additional Medicare members and 8.8 million additional Medicare Advantage members. You will need a completely different business model, at least for home healthcare.”

While the rise in Medicare Advantage will affect reimbursement plans, it will also create opportunities for home care agencies.

“The value of a managed care offering, in particular Medicare Advantage, ultimately drives action,” Dombey said. “We need to be there, preparing to deliver that value proposition.”

Case in point: In the early stages of the pandemic, it was managed care that came up with ways to reimburse home health care agencies for virtual visits, Dombey noted.

On the other hand, Dombey is more skeptical of Medicare Advantage as it relates to home care, he pointed out, based on some early returns.

“I still think we need to look very carefully at Medicare Advantage plans, at least as they involve home care services,” Dombey said. “We haven’t seen usage, overall management, and of course the pricing they offer to service providers not be financially sustainable.”

Now the pressure on Medicare Advantage is coming not just from television and traditional marketing, but from both sides of Congress. This is what providers should expect to continue.

“Politicians, members of Congress and regulators are also very active in promoting this, and it is independent of the party,” Dombey said.

Dombey also took the opportunity to criticize MedPAC, which recently voted to recommend that CMS cut Medicare’s base rate of payment for home health care by 7% in 2024.

“Our dear friends at MedPAC, or as some of us call the Medicare Payment Cut Commission, need to modernize their thinking,” Dombey said. “We need to look at the economic models that home health care facilities, hospices and other health care providers actually operate in. In the meantime, they continue to offer these pay rates. I think it has to do with a very fragmented mindset.”

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