By Stephen Tweed
One of the things you may want to consider in growing your home health agency is linking up with provider sponsored Medicare Advantage plans in your local marketplace. While most home health agencies much prefer traditional Medicare fee for service patients, there are times when it makes sense to develop strategic alliances with Medicare Advantage plans, also know as Medicare Part C.
Medicare Advantage started in 1997 as part of the Balanced Budget Act, and was known as Medicare+Choice. The name was changed to Medicare Advantage by the 2003 Medicare Prescription Drug, Improvement and Modernization Act. Here are some facts about MA plans:
- In 2012, Medicare Advantage plans covered 13.7 million enrollees, or 27% of all Medicare beneficiaries.
- Medicare Advantage plans account for 22% of Medicare Spending.
- MedPAC estimates that MA plans were paid 7 to 14% more that traditional fee for service.
- The Patient Protection and Affordable Care Act will cut $200 billion from MA plans between 2010 and 2020.
- The average MA enrollee paid $35 per month in 2012.
- 65% of MA plan beneficiaries are covered by the six largest insurers.
The Centers for Medicare and Medicaid services (CMS) rates Medicare Advantage plans on a 1 to 5 star ranking system (sort of like hotels). The top ranked plans receive bonuses based on quality. The top ranked plans were awarded $3.1 billion in 2012.
Five-star plans receive up to 5% of Medicare payments as bonuses and are permitted to recruit and enroll beneficiaries year round. Other plans have limited enrollment periods. CMS contacts beneficiaries enrolled in lower performing plans and encourages them to switch to four and five star plans.
The 2013 star ratings, released in October of 2012 based on 2011 data showed that 10 of the 11 five star rated plans were owned by hospitals, health systems, or physician groups.
sources: CMS, American Hospital Association
What does this mean for Home Health and Hospice?
If you are a provider based home health agency, and your health system has it’s own Medicare Advantage plan, you really want to get to know the leaders of the health plan and understand their issues and priorities. The more you understand their business, the more you can help them achieve their goals, and the more they will want you to care for their patients.
If you are a free standing agency, and your local health system has a provider owned MA plan, you will want to do some networking to get to know the leaders of the plan. If the local hospital based agencies are not doing a good job of connecting with the MA plan, there may be an opportunity to make inroads and generate some new patient admissions.
While many of these provider owned MA plans have not yet formed Accountable Care Organizations, there are some similarities. The more you understand how these plans are reimbursed by Medicare, and how they are rewarded for top performance, you more you can help them achieve there goals.
As one health system executive said, “one of the most vexing issues we face is medication reconciliation. When a senior with five or ten drugs is hospitalized, I guarantee those medications will change post-discharge.” If your home health nurse or case manager can help that patient adjust to the new combination of prescriptions and make sure they take their meds, the chances of an avoidable readmission go down.
A study in the February 2012 issue of the American Journal of Managed Care showed that between 2006 and 2008, 30-day hospital readmission rates for Part C plans were 22% lower than for traditional Medicare fee for service.
Take some time to get to know your local Medicare Advantage plans, and particularly the provider owned plans. Then use your networking connections to get to know the leaders, and develop strategic alliances to help them meet their goals.
As our dear friend and professional speaking colleague Zig Ziglar always said, “You can have everything you want in life, if you just help enough other people get what they want.”