An Inside Look at How to Overcome the Complex Relationship Between Medicare Advantage Plans and Home Care Providers

The relationship between home care providers and Medicare Advantage plans has been challenging, to say the least. As obstacles persist, it is essential for home care providers to establish meaningful relationships. We examine the current challenges, solutions to improve relationships, and the important role of home care in Medicare Advantage plans. Discover how to effectively bridge these gaps and advocate for better integration of home care in the Medicare Advantage plans. There are approximately 32.8 million people enrolled in Medicare Advantage plans, representing 54% of the 61.2 million Medicare beneficiaries eligible for both Parts A and B. This marks a significant increase in Medicare Advantage participation compared to previous years, with steady growth anticipated in 2025. How can home care providers resolve the challenges and build relationships? Identifying Home Care Challenges Home care providers encounter significant challenges when collaborating with Medicare Advantage plans. These plans frequently have different requirements, reimbursement rates, and coverage policies compared to traditional Medicare. Here are four key challenges: 1. Lower Reimbursement Rates: Medicare Advantage plans frequently negotiate reimbursement rates for home care services that are lower than those available under traditional Medicare. This trend poses a significant threat to the financial sustainability of home care agencies, particularly smaller providers. 2. Increased Administrative Burden: Medicare Advantage plans typically impose substantial administrative requirements, such as obtaining prior authorizations, providing detailed documentation, and submitting frequent updates to justify ongoing care. This administrative complexity diverts essential time and resources from patient care and may result in delays in the initiation of services. For example, on May 17, 2023, the U.S. Senate Permanent Subcommittee on Investigations initiated an inquiry into the three largest Medicare Advantage companies: UnitedHealthcare, Humana, and CVS Health. The purpose of the inquiry was to obtain information and data about how these companies decide to approve or deny prior authorization requests, as well as the technologies they employ in this process. The subcommittee specifically sought data regarding prior authorization requests and denials that occurred between 2019 and 2022. Highlights of the Investigation In 2022, Medicare Advantage insurers overall received more than 46 million prior authorization requests and either fully or partially denied about 7.4% of them. In 2022, less than 10% of denied requests were appealed. From 2019 and 2022, UnitedHealthcare, Humana, and CVS Health each denied prior authorization requests for post-acute care at far higher rates than they did for other types of care. In 2022, UnitedHealthcare and CVS denied prior authorization requests for post-acute care at rates about three times higher than their overall denial rates for prior authorization requests. Humana’s prior authorization denial rate for post-acute care was more than 16 times higher than its normal rate of denials. UnitedHealthcare’s prior authorization denial rate for post-acute care increased from 10.9% in 2020, to 16.3% in 2021, to 22.7% in 2022. According to the report, the company was implementing multiple initiatives to automate the process, including through a platform called naviHealth, which is owned by Optum. In 2024, the company rebranded naviHealth to Home & Community Care. CVS Health's prior authorization denial rate for post-acute care was stable from 2019 to 2022, but the number of post-acute care service requests that required prior authorization increased by 57.5%. Humana's denial rate for long-term acute care increased by 54% between 2020 and 2022. The Better Medicare Alliance, a pro-MA advocacy group, response: “Prior authorization works to ensure care is safe, evidence-based, and cost-effective for Medicare Advantage beneficiaries. This report paints a misleading picture of how the program operates. At the same time, we should always be working to ensure it is as responsive as possible to the needs of seniors. That is why we support ongoing efforts to improve prior authorization." 3. Delayed Payments Home care providers often face payment delays from MA plans due to lengthy approval processes, claim denials, or resubmission requirements. This can lead to cash flow challenges, particularly for smaller agencies. 4. Supplemental Benefits Disparities While some Medicare Advantage plans provide expanded benefits for home care services – such as non-skilled caregiving or home modifications – these benefits are often inconsistently available and frequently capped. This inconsistency can lead to confusion for both beneficiaries and providers. In 2025, a smaller number of Medicare Advantage plans will offer in-home support services, marking the lowest percentage since 2021, according to the Kaiser Family Foundation. Only 10% of plans will include this long-term services and supports benefit next year, down from 15% in 2024. Figure 1 compares supplemental benefits over the years. Identifying Key Partnership Improvements In recent years, we have thoroughly explored the challenges that exist between home care providers and Medicare Advantage plans. Key areas for improving these relationships include: Understanding the role of home care providers within a Medicare Advantage plan. Aligning your services with the goals of Medicare Advantage plans – such as cost containment, high-quality care, and improved patient satisfaction – you can build a successful and sustainable partnership. Strengthening the relationships between home care providers and physicians within a value-based payment model. Here are some examples from Medicare Advantage plans about the value of home care: 1. Successful partnerships are characterized by a thorough understanding of why home care organizations are a key linchpin within a Medicare Advantage plan and how these organizations are integrated into a seamless care model. In the recent Optum Overview Report, particularly in the section titled "Expanding Home Care," the following was stated: “Home care is a key element of our value-based care approach. It is essential to delivering more equitable and accessible care that effectively addresses a patient’s complex conditions, medication adherence, social needs and behavioral health challenges. This year we will make approximately 16 million home visits, helping to reduce hospital admissions and ensure more of our patients have access to a primary care physician.” “Our home care model provides integrated, comprehensive, risk-based care for patients that addresses each person’s medical, behavioral, social, and financial needs. Our home-based approach serves a growing number of Medicare special needs patients who are managing multiple conditions, lack access to transportation or live in rural areas, and are frequently dealing with mental health issues.” 2. Successful partnerships depend on understanding payment models, care delivery systems, and alignment of quality measures. In Humana’s Value-Based Care Report, Humana research determined that 20% of its Medicare Advantage expenditures can be addressed via home-care services, and an even higher percentage in some areas such as prevention, care coordination, care management and assessments. Also, Humana MA members who received home health from Kindred at Home saw 11% fewer readmissions than those supported by other home health providers. 3. Approximately 60% of all physicians in Medicare Advantage plans operate under value-based contracts. The fact that more than 60% of physicians are in value-based contracts is highly relevant to home care providers because value-based care models emphasize outcomes, efficiency, and cost-effectiveness – aligning naturally with the goals of home care. Here’s why that matters: Focus on patient outcomes Reducing the cost of care Coordinating care for patients with complex needs. Reducing hospital readmissions Value-based contracts in MA typically incentivize providers to improve patient outcomes, manage chronic diseases, and reduce costs through preventive care and efficient resource use. The value of home care is a critical partner. Defining that partnership has several opportunities. Conclusion The collaboration between home care providers and Medicare Advantage plans holds immense potential to reshape the healthcare ecosystem. While challenges such as reimbursement complexity and regulatory hurdles persist, the opportunities for growth, innovation, and improved patient care are equally compelling. By embracing strategic partnerships, leveraging technology, and focusing on value-based care, home care providers can not only thrive in this evolving landscape but also play a pivotal role in transforming healthcare delivery for an aging population. Additional Resources Refusal of Recovery: How Insurers Have Denied Patients Access to Post-Acute Care U.S. Senate Permanent Subcommittee on Investigations October 17, 2024 Download ArticleDownload the Entire Issue

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An Inside Look at How to Overcome the Complex Relationship Between Medicare Advantage Plans and Home Care Providers

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