Home health care providers should keep a close eye on the rise and popularity of managed care plans under Medicare Advantage in 2023.
That was one of the many messages from Bill Dombi, President of the National Association for Home Care & Hospice (NAHC), during Wednesday’s webinar with Netsmart.
“There is a strong sentiment to privatize the Medicare program and offer it through managed care plans,” Dombi said. “Although the bloom is a little different from the rose and some of the people who have been longtime supporters of Medicare Advantage plans are taking a closer look at how they work.”
Dombi cited a presentation by the Medicare Payment Advisory Commission (MedPAC) last week that showed the cost of enrolling people in Medicare Advantage plans exceeds the likely cost of the healthcare they would have received in a traditional Medicare program.
“106% of that total cost,” Dombi said. “The future is not a runaway train right now, it’s moving at full steam.”
For many, the marketing behind Managed Care Medicare Advantage plans has been almost hard to ignore, which has undoubtedly given way to MA’s popularity.
“Beyond the workforce megatrend and everything that goes with it, you have to recognize that managed care is growing,” said Dombi. “Joe Namath, Jimmy Walker and Bill Shatner have all had some success in recruiting people to join the Medicare Advantage plan over traditional Medicare. We continue to see the proportion of traditional Medicare patients in home care shrinking as the Medicare Advantage population grows.”
Fewer people have enrolled in traditional Medicare today than they did in 2014, according to NAHC. This trend is due in part to the sudden growth of Medicare Advantage.
“The latest numbers have us knocking on the door that 50% of Medicare enrollments will be in the traditional program and 50% will be in the Medicare Advantage program,” Dombi said. “8.8 million additional Medicare beneficiaries and 8.8 million additional Medicare Advantage beneficiaries. They’re going to need a very different business model, at least for home health services.”
Although the growth of Medicare Advantage will impact reimbursement plans, it also creates opportunities for homecare facilities.
“The value proposition with managed care, particularly with Medicare Advantage, that ultimately drives action,” Dombi said. “We need to be there and prepare to present that value proposition.”
Case in point: In the early stages of the pandemic, it was managed care that found ways to provide home health officials with virtual visits, Dombi noted.
On the other hand, Dombi is more skeptical about Medicare Advantage as it relates to home care, he indicated based on some early feedback.
“I still think we need to be very cautious about considering Medicare Advantage plans, at least as far as home care services are concerned,” Dombi said. “We have not seen that the nature of the usage, the overall management and certainly their pricing that they are offering to the providers of the services are not financially viable.”
Now the pressure is on for Medicare Advantage, not just from television and traditional marketing, but from both sides of Congress. This is something vendors should expect to continue.
“Politicians, members of Congress and regulators are also very supportive of it, and it’s not partisan,” Dombi said.
Dombi also didn’t miss an opportunity to criticize MedPAC, which recently voted to recommend CMS to reduce Medicare’s home health policy by 7% for fiscal year 2024.
“Our dear friends at MedPAC, or as some of us have renamed the Medicare Payment Reduction Commission, need to modernize their thinking,” Dombi said. “There is a need to look at the economic models in which home health care, hospices and other healthcare providers actually operate. In the meantime, they keep proposing these pay rates. I think it’s because of a very isolated mindset.”
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