the promise of homecare

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The Promise of Homecare:The Shift to Value-Based Care

Chapter One

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T H E PRO M I S E O F H O M EC A R E :

C H A P T E R O N E | T H E S H I F T TO VA LU E- BA S E D C A R E

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2021 2022 2023

1 IbisWorld, “Home Care Providers in the U.S.,” July 2019.

Healthcare is undergoing significant transformation. Value-based care is

driving major change in the industry, healthcare reimbursement models

are in a state of flux, and regulatory pressures and penalties are putting a

strain on revenues.

Recognizing they cannot address these issues alone, healthcare providers and payers are collaborating

and consolidating to create a system that provides sustainable quality care. Many payers are exploring

alternative payment models that reward value over volume and that promote clinical integration

to improve outcomes. At the same time, payers and providers alike are acknowledging the value in

improving patient engagement to deliver a truly patient-centered care experience that aligns shared

goals and incentives.

Managed care organizations (MCOs) are no exception. As MCOs transition to value-based care, many

are recognizing the value of homecare in driving quality care and reducing costs. With the nation’s

prevalence of chronic conditions and an aging population, homecare is seeing growing acceptance

among physicians and MCOs who seek more cost-efficient treatment options. Recent homecare

industry growth trends reflect this shift. Industry revenue is forecast to grow at an annualized rate of

5.7% over the next four years, reaching $131 billion in 2024.1 2024

$131

BIL

LIO

N

Introduction


3

Keys to Success in the Shift to Value-Based Care

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While healthcare as a whole is experiencing this transformation, the

homecare industry is uniquely positioned to deliver some of the greatest

rewards of value-based care in the post-acute space. Homecare plays an

important role in allowing MCOs to ease the transition to value-based care

with these best practices:

ESTABLISH A DISCIPLINED, STRUCTURED APPROACH TO

HOMECARE DATA GATHERING

MAXIMIZE HOMECARE TECHNOLOGY & TOOLS

MONITOR CHRONIC CONDITIONS & HIGH-

ACUITY MEMBERS

EVALUATE SOCIAL DETERMINANTS

OF HEALTH

INCREASE MEMBER ENGAGEMENT &

SATISFACTION




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The Role of Homecare in Value-Based Care

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Over the years, homecare has continued to gain prominence as an important

and respected part of the continuum of care as more members of society are

choosing to age in place. Now, with the shift to value-based care, homecare

offers one of the biggest opportunities to directly influence outcomes at the

point of care as homecare aides act as the eyes and ears into patients’ homes.

However, while homecare holds great potential to improve patient outcomes, the difficulty lies in

creating a systematic, repeatable approach that allows caregivers to collect data on physical and

mental health, social determinants of health, adherence to care plans, and more. This data can

help improve care while allowing for preventative measures that reduce potentially avoidable

hospitalizations, readmissions, unnecessary emergency department use, and other costly care.

Ultimately, caregivers hold the potential to transform the delivery of long-term care and chronic

care management—while being poised to help the healthcare ecosystem deliver quality care at a

lower cost.




5

Value-Based Care in the New Healthcare Economy

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Beginning as early as 2008, the Centers for Medicare & Medicaid Services

(CMS) has emphasized quality of care over quantity of services, requiring

a shift in the way healthcare is delivered and reimbursed. In response to

unsustainable healthcare spending and an aging demographic, reimbursement

dollars are being restructured to give greater weight to value over volume.

The Affordable Care Act (ACA) and the Medicare Access and CHIP Reauthorization Act of 2015

(MACRA) have irrevocably shifted the fee-for-service paradigm and changed the way Medicare

rewards clinicians. The objective was to create a new reimbursement system that drives clinical

practice improvement and patient outcomes. With involvement from some of the largest healthcare

purchasers (e.g., Medicare, Medicaid, and employers), value-based care addresses public pressure

for coordinated care, healthier communities, improved primary care, and technology and tools that

make quality care more affordable.

Value-based care addresses

public pressure for coordinated

care, healthier communities,

improved primary care, and

technology and tools that make

quality care more affordable.




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Rising Healthcare Costs

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2 National Health Expenditure Accounts, CMS.gov, December 17, 2019.

Among the factors that have led to value-based care, perhaps the most

significant is the rise in healthcare spending in the U.S. According to CMS,

healthcare spending grew 4.6% in 2018, reaching $3.6 trillion or $11,172

per person. As a share of the nation’s gross domestic product, healthcare

spending accounted for 17.7%.2

While value-based care is effectively targeting the high cost of healthcare, the homecare industry

is also improving this trend. With regularly scheduled visits in the home, homecare aides can help to

drive cost-effective treatment options, encourage preventative care, and avoid costly interventions.

Data that can be collected by homecare aides can help MCOs ensure members receive the care

they need while reducing the potential for high-cost care.

2018 HEALTHCARE SPENDING PER PERSON

IN THE U.S.

$11,172

T H E I M P E T U S O F VA LU E- BA S E D C A R E




https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical

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An Aging Nation

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3 United States Census Bureau, “2020 Census Will Help Policymakers Prepare for the Incoming Wave of Aging Boomers,” December 10, 2019.4 United States Census Bureau, “The U.S. Joins Other Large Countries with Large Aging Populations,” October 8, 2019.

The shift to value-based care is also driven largely by the nation’s aging

population, who often come with chronic conditions needing long-term care.

Baby boomers have changed the face of the U.S. population for decades and continue to do so.

According to the U.S. Census Bureau, 10,000 Americans will turn 65 every day, and all 73 million

baby boomers will be at least 65 by 2030.3

The U.S. Census Bureau projects that older adults will edge out children in population size by 2034.

People age 65 and over are expected to number 77 million while children under age 18 will number

76.5 million. This will mark the first time in U.S. history when older adults will outnumber children.4

10,000 AMERICANS TURN 65 EVERY DAY.





https://www.census.gov/library/stories/2019/12/by-2030-all-baby-boomers-will-be-age-65-or-older.html

https://www.census.gov/library/stories/2018/03/graying-america.html

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Vulnerable Populations

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5 HealthPayer Intelligence, “CMS to Test New Models for Medicare, Medicaid Dual Eligibles.”6 IbisWorld, “Home Care Providers in the U.S.,” July 2019.

In addition to the growing number of people over 65, dual-eligible beneficiaries

(those individuals eligible for both Medicare and Medicaid) account for a

disproportionate and growing percentage of total healthcare costs.

According to CMS, there are 12 million dual-eligible beneficiaries today. Many have complex medical

issues including multiple chronic conditions. This vulnerable population also has socioeconomic risk

factors that can lead to outcomes that are less than optimal. Between Medicare and Medicaid, the cost

of care for these individuals amounts to $300 billion per year.5

Homecare providers are in a prime position to serve these high-risk populations. In fact, the care

required for aging and vulnerable populations has led to rapid homecare provider growth. The total

number of homecare providers is increasing 5.2% annually over the four years to 2024, reaching

536,388 enterprises as new companies are lured by the industry’s growth.6 For dual-eligible

individuals, the developmentally disabled, and others with complex healthcare needs, homecare

agencies can use technology and data collection tools to help improve preventive care and reduce

the need for costly care.

NUMBER OF DUAL-ELIGIBLE BENEFICIARIES IN 2019.

12 Million





https://healthpayerintelligence.com/news/cms-to-test-new-models-for-medicare-medicaid-dual-eligibles

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The Implications of Value-Based Care to MCOs

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Operating under state and federal mandates, MCOs are taking many

approaches to the shift to value-based care. As the cost of healthcare

continues to rise, particularly among aging populations, MCOs are

developing value-based care strategies to alleviate the many cost

pressures that put a strain on the healthcare system.

Strategies include improving chronic disease management, monitoring members at risk, and

increasing member engagement and satisfaction. With a focus on customized care management,

many MCOs are implementing care coordination models that involve conducting an initial care

assessment, developing a plan of care with an interdisciplinary team, and monitoring and reporting

on outcomes. In this way, MCOs are developing evidence-based, integrated clinical care models

tailored to effectively manage members’ total healthcare needs.




10

Alternative Payment Models

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7 Open Minds, “The VBR Mandate – Medicaid Requirements on the Increase,” August 26, 2019.

Fundamentally, the shift to value-based care requires a change in payment

models. Medicaid, Medicare, and commercial health plans are all actively

participating in alternative payment models that seek to link reimbursement

to patient outcomes. In fact, a survey conducted by healthcare research

firm Open Minds found that a staggering 93% of health plans are operating

under pay-for-performance payment models.7

At the federal level, CMS has led an attempt to tie reimbursement to patient outcomes and the total

cost of care, showing flexibility with payers and health systems to develop alternative payment models.

Payment reform includes bundled payments, shared savings, capitation, and other new payment

models. Also under Medicare is a growing number of accountable care organizations (ACOs), which

hold providers jointly accountable for the health of their patients. Included in this approach are

financial incentives to cooperate and financial savings that stem from the avoidance of unnecessary

tests and procedures.

93%

OF HEALTH PLANSOPERATE UNDER

PAY-FOR-PERFORMANCE PAYMENT MODELS.




https://www.openminds.com/market-intelligence/executive-briefings/the-vbr-mandate-medicaid-requirements-on-the-increase/

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Alternative Payment Models: A Case Study

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8 RevCycle Intelligence, “More States Require Value-Based Reimbursement in Medicaid,” October 23, 2019.

Individual state Medicaid programs are taking similar approaches. New York state, for example,

implemented the Delivery System Reform Incentive Payment program (DSRIP) to fundamentally

restructure the healthcare delivery system by reinvesting in Medicaid and implementing the use

of value-based payments. The program works to align payer and provider incentives, focusing on

holistic care that addresses prevention, primary care, and overall health and wellness. A handful of

states have sought to accelerate the use of alternative payment models by setting targets for MCOs

to contract with network providers using value-based care arrangements.

“When New York State redesigned its Medicaid program in 2011, the governor charted a path

forward to reduce total Medicaid spend, improve outcomes, and increase value,” said Andrew Segal,

former director of the Division of Long Term Care for the New York State Department of Health.

“The program establishes a direct link between provider performance and payment for care delivery.”

As of early 2019, 48 states had implemented value-based reimbursement or care programs, a

seven-fold increase from five years ago. Many states are pushing forward at a rapid pace. New York

expects to have 80-90% of payments in Level 1 value-based reimbursement arrangements by the

end of 2020, while Washington plans to have 75% of payments tied to value by the end of this year

and 90% in 2021.8

“ When New York State rede-

signed its Medicaid program

in 2011, the governor charted

a path forward to reduce total

Medicaid spend, improve out-

comes, and increase value.”

– Andrew Segal, former director New York State Dept. of Health




https://revcycleintelligence.com/news/more-states-require-value-based-reimbursement-in-medicaid

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Advancements in Medicare and Medicaid Integration

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9 Center for Health Care Strategies, “State Efforts to Integrate Care for Dually Eligible Beneficiaries: 2020 Update,” February 2020.

In addition to the increases in value-based payment programs, the industry

has made advancements in Medicare-Medicaid integrated care models

for dual-eligible beneficiaries. As of January 2020, more than one-third

of states operate integrated care models, and enrollment has increased

nearly five-fold in the past decade.9

This is particularly important in long-term care. While Medicare covers up to 100 days in a skilled

nursing facility for each benefit period, all states have a Medicaid program for individuals who need

long-term care. Similarly, since 2018, Medicare Advantage plans are offering long-term care benefits

to pay for custodial benefits like meal delivery, light housekeeping, and in-home assistance.

OF STATES OPERATE INTEGRATED CARE

MODELS.

Over 1/3




https://www.chcs.org/resource/state-efforts-to-integrate-care-for-dually-eligible-beneficiaries-2020-update/

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With cost and quality outcomes at the core of value-based care, the entire

healthcare ecosystem is working to make healthcare more affordable and

more effective for the patients it serves. At the same time, all corners

of the world are becoming increasingly data driven. The convergence of

these trends paves the way for homecare data. By gathering and sharing

data, homecare aides play a pivotal role in the industry’s work toward

quality outcomes at a reduced cost.

Maximizing Homecare Data for the New Healthcare Economy

hhaexchange.com

COST

VALUE-BASED CARE

QUALITY




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FOR ACTIONABLE TIPS ON HOW HOMECARE DATA CAN IMPROVE YOUR EFFORTS IN VALUE-BASED CARE, READ:

Chapter Two | Five Steps to Leveraging the Power of Homecare Data in Value-Based Care

At HHAeXchange, we believe that ensuring optimal compliance and minimizing risk begin with actively managing the entire homecare ecosystem. As the premiere homecare management solution for the Medicaid LTSS population, HHAeXchange acts as the single source of truth in connecting payers, providers, and patients through a secure and intuitive web-based platform. Since 2008, HHAeXchange has helped numerous states and MCOs manage billions of dollars in Medicaid claims while achieving a new level of oversight, transparency, and control that hasn’t previously existed in the marketplace.

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