Depending on the size and stability of your agency, pursing preparations and beginning to form relationships with Medicare Advantage plan providers could impact your agency’s future.
Medicare Advantage plans have been a hot topic for the better part of the last two years. However, 2020 could be the year that private duty home care begins to feel a real impact.
In 2018, CMS (Center for Medicare & Medicaid Services) announced a benefit expansion by adding non-skilled in-home care as a Medicare Advantage benefit.
In 2019, CMS alluded to continuing trials and the expansion of Medicare Advantage plans with the hopes of reducing care costs and providing seniors more options for care. Non-medical home care agency owners have the opportunity to prepare for and capitalize on changes coming down the Medicare Advantage pipeline this year.
Looking ahead to 2020, CMS will continue to increase opportunities for more non-medical private duty providers to receive MA contract opportunities. 2020 looks to open the door for non-medical service providers that prioritize social determinants of health and/or environmental factors that affect people’s overall well-being.
Depending on the size and stability of your agency, pursing preparations and beginning to form relationships with Medicare Advantage plan providers could impact your agency’s future. Here is a simple breakdown of how this newer payer source and large opportunity could impact your agency this year.
2 Ways to Begin Preparing for Medicare Advantage Contracts
Evaluate Your Payer Source Pillars – While choosing the right payer sources depends on the needs and circumstances of your agency, many experts agree that it’s beneficial to build your business across multiple pillars, or a small handful of diversified payer sources. These pillar sources will naturally act as the foundation for your agency’s revenue.
With Medicare Advantage plans opening up new opportunities, these contracts could potentially become one of your leading payer sources. Depending on your current payer sources, MA contracts could even become one of your pillar sources.
Establishing and obtaining Medicare Advantage contracts can give your agency an additional stream of revenue. Recently CMS made a 2020 Rate Announcement and the expected average revenue will increase by about 2.5% over last year.
From the CMS Media Relations, “Medicare Advantage remains a popular choice among beneficiaries and has high satisfaction ratings. Average Medicare Advantage premiums are at their lowest in six years, Part D premiums are at their lowest in three years, and plan choices have increased. Today’s announcement builds in additional flexibilities that will continue to increase choice and competition among Medicare health plans.”
Industry experts have predicted that MA opportunities will really begin to ramp up this year and next – so now would be a good opportunity to evaluate your payer sources and see if MA contracts could be a good fit for your agency.
Open Up Communication with MA Plan Providers – As a home care provider, it would be a good idea to begin opening up communication with MA plan providers. Find ways that you can take advantage of the benefits ramping up in your market. MA providers can become a resource to learn what opportunities there are in your market.
Discussions with MA providers also act as a great way to begin educating yourself and your agency on what will be expected of you as you take on MA contracts. The services an MA organization chooses to cover are flexible, so as an agency owner, you’ll need to familiarize yourself with their regulations, requirements and specific plans.
As with all payer sources, MA contracts should be approached with caution. When CMS refers to ‘supplemental benefits’, there’s only a small portion of funds to be spread across a wide array of benefits – not just home care.
2 Key Factors to Keep in Mind Before Pursuing MA Contracts
Staffing Turnover & Dependability – It’s highly likely that your agency is currently struggling with overcoming caregiver turnover. Nationwide agencies are digging for any and all tactics they can to overcome the caregiver shortage and retain high-quality caregivers.
Before your agency can position itself and accept MA plan cases and contracts, it’s important that your staffing is steady and reliable for these instances. Most agencies have their caregivers on hourly minimums and promote consistent schedules. Some MA cases may be low hour and/or slightly irregular resulting in potentially unprofitable or impractical for your agency.
In a recent webinar, our CEO, Erik Madsen discussed the importance of balancing low-hour clients with caregivers that are looking for longer and more consistent scheduling. Taking on MA contracts will typically result in lower-hour clients, which often exacerbates existing problems with caregiver turnover.
Taking on MA contracts is completely situational to the stage and circumstances of your agency. Don’t jeopardize the needs of your employees for short-term client gains. Most often, it won’t end well in the long-term.
The potential turnover issues that could arise from shorter shifts should be factored into your decision-making; however, they haven’t stopped some agencies from pursuing Medicare Advantage clients as a viable source of growth. If you decide to pursue Medicare Advantage as a payer source, ensure that you’re a competitive overall employer to balance out the shorter shifts.
How to Recruit and Retain Caregivers When You’ve Already Tried Everything
Associated Rates & Costs – Most often MA plans will offer home care agencies reimbursement rates lower than most standard or market averages. Generally, the higher volume of care can offset the lower margin, but an overall financial analysis of MA cases and rates should be taken into consideration for your specific agency.
As mentioned above, it would be wise to review rates and costs of specific plan from multiple MA providers to find options that could best suite your agency. There isn’t a one-size-fits all MA plan for each individual, nor will that be the case with MA contracts for your agency.
Be mindful of how out-of-pocket costs play into these supplemental benefits. The funds are not unlimited but portioned to fit the needs of masses of people. Do your homework before going into meet with these MA providers. Questions like out-of-pocket costs, growth rates and plan coverage are just a few of the topics you’ll want to make sure you understand.
Don’t Fall Stagnant in a Pivotal Year for Home Care
The agencies that remain stagnant this year will most likely find themselves on the wrong side of the home care divide. New opportunities as potentially impactful as MA contracts won’t be chances your agency wants to miss out on.
Stagnation, however, could quickly result in failure more than ever this year because competition is raging around you. Your other local agency owners are on their toes and those ready to run after these types of opportunities could quickly put you behind.
Make it a priority in the coming weeks and months to evaluate your payer sources and begin opening up communication with MA plan providers. These preparations and evaluations will add value to your agency regardless of whether or not you proceed with these MA opportunities. The knowledge you gain and the relationships you form will turn into opportunities for your agency.
We’ll be sure to see more discussion around MA home care opportunities expanding this year, so keep it on your radar. As an agency owner, lead out in discussions outlining next steps your agency should be tackling today to capitalize on these types of opportunities tomorrow.
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