4 key modifications Enhabit has made to Medicare Benefit and workforce methods

Leading the way in recruitment and Medicare Advantage (MA) strategy are two of the top priorities for Enhabit Inc. (NYSE: EHAB) over the next few years.

Despite a bumpy start in the public market earlier this year, Enhabit CEO Barb Jacobsmeyer said the company made significant changes to its benefits package for new and existing employees after receiving feedback on their needs.

In a speech Thursday at the Wells Fargo Healthcare Conference, Jacobsmeyer said Enhabit made three key changes to its approach to human resources.

The first was the appointment of a chief human resource officer to the leadership team. Jacobsmeyer said when she came to Dallas with Encompass Health Corporation (NYSE:EHC), she was surprised to find that the most senior position in human resources was a vice president.

“It was kind of surprising, knowing that we only care about our people,” she said. “[Tanya Marion] joined us in January and has over 25 years of healthcare experience. This has allowed us to really focus on being competitive not only from a talent acquisition standpoint, but also on employee retention, as well as connecting our leadership development and our overall people development.”

Enhabit also invested about $8.5 million in compensating mileage for its employees after gas prices skyrocketed this year.

“We received feedback from our talent acquisition team that we were not competitive when it came to reimbursement for mileage,” said Jacobsmeyer. “That’s a really important part of the benefit for these mobile workers.”

The third change Enhabit made was to improve the employee’s share of the premium cost of health care.

This summer, Enhabit completed its spin-off of Encompass Health. Even if external factors have not made the past few months easy, there is still a lot to celebrate, said Jacobsmeyer.

For example, out of the 34 states that Enhabit serves, there are 11 states where the company is either #1 or #2 in market share for home health care.

The quality score numbers are also strong, which is used as leverage when sitting at the table with the payers.

“If you look at our quality results, we’re about 200 basis points below the national average on readmissions, and that’s an important metric, especially when we’re talking to payers,” Jacobsmeyer said.

The home health care and hospice provider is also bullish on Medicare Advantage. Enhabit has traditionally focused primarily on traditional Medicare. However, after talking to their sales teams, Jacobsmeyer found that some referral sources exclude Enhabit because they know they only come for traditional Medicare patients.

“To be able to open those doors again, we needed to get more involved with Medicare Advantage,” Jacobsmeyer said. “If we look at the communities we serve today, from 2020 to 2021 we saw an 11% increase in the number of Medicare Advantage beneficiaries and a 4% decrease in traditional Medicare. So we have to sit at the same table with them.”

The Enhabit currency has several regional and local MA treaties and one larger, national treaty.

The discussions Enhabit has now had with these national payers revolve around being paid fairly and moving towards episodic or case rates, but Jacobsmeyer understands that there is give and take.

“We will commit to starting treatment in a timely manner, we will commit to enrolling more MA patients and help fill some of the gaps in care,” she said. “We already have really great and low readmission rates. We challenge them to look at their own data and [consider] what other providers do, because a resumption costs them money.”

Enhabit is fully committed to Medicare Advantage. Jacobsmeyer believes it’s a good time to be there.

“I think we have their ear because they have acknowledged that they have some issues with access for their members,” she said. “It’s a good time to sit at the table with them.”

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