Home Care agencies Strategize ‌Amid Medicare Advantage Challenges

Updated June 09, 2025
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Faced with rising⁤ demand and payment pressures, home ⁤care leaders are exploring​ strategies to‍ boost efficiency, expand access,⁤ and improve patient outcomes. These approaches range from renegotiating Medicare advantage rates to expanding service lines and demonstrating value to payers.

For home care agencies, navigating the complexities of Medicare Advantage (MA) plans​ is a critical‌ challenge. With MA enrollment reaching 54% of eligible Medicare beneficiaries in 2024, providers are increasingly reliant on these plans‌ for revenue. However, many find that MA reimbursement rates fail to cover even the direct cost per‍ visit, let alone corporate overhead.

David Lester, CEO of ProHealth Home Health & Hospice, ⁤said his company is actively negotiating with Medicare Advantage plans to maximize patient acceptance. “A lot of the MA plans…don’t pay rates that even cover our direct cost per visit, much less the corporate ⁢overhead,” Lester said. He ​added that ProHealth has had to withdraw‌ from⁢ certain plans due to a lack of national ​leverage.

ProHealth, based in Birmingham, Ala.,serves around 1,200 patients monthly across home health,hospice,and skilled nursing facilities. The company’s ​experience reflects a broader trend‍ in which providers⁢ are forced to either⁣ innovate with new payment models or walk away from unfavorable MA contracts.

“We are just trying to negotiate with the Medicare Advantage plan so that we can accept as many patients as possible… Exploring diffrent‍ new payment models with those MA plans is how we’re ⁤trying to expand access.”

– David Lester, CEO,⁢ ProHealth Home Health & Hospice

Jennifer Webster, CEO of DispatchHealth, emphasizes the importance of demonstrating value through data and evidence. This‌ includes showcasing how home-based care reduces emergency room visits,shortens ⁢hospital stays,and prevents readmissions.

DispatchHealth, headquartered in Denver, Colo., provides in-home medical care for individuals with‌ serious health issues, having⁤ treated over 1.2 million patients across more than 20 states. The company’s average patient is 74 years old with multiple comorbidities, highlighting the potential​ for home-based care to improve outcomes and⁣ reduce costs for high-risk populations.

“You have to be able to demonstrate that to ⁢the folks that are paying for that care every day… through the data⁣ and through the evidence that says,⁢ ‘Look, this patient’s‌ first inclination is to⁢ go to the emergency room, and⁢ we kept them out of the emergency room,’ or ‘We shortened their hospitals stay.’”

– Jennifer Webster,CEO,DispatchHealth

Ralph Laughton,CEO of Heart,Body & Mind Home Care,highlights the strategic importance of specializing in specific conditions to differentiate a business⁤ and attract clients. ‌His company focuses on Alzheimer’s, dementia, and Parkinson’s care, citing the stability and long-term care needs of patients with these conditions.

Heart, Body & Mind Home Care, based in Fort ⁤Myers, Fla., offers personal care, companion care, and​ hospital discharge​ services throughout the state. By focusing on conditions with ‍longer care⁢ durations, the⁢ company aims to build a stable patient census and maximize long-term revenue.

“We⁢ decided that ⁢we need to have some meaningful ‌differentiation in the agency in order to grow and scale, and for that reason, we ‍chose Alzheimer’s, dementia, Parkinson’s care… What we were looking for there is stability in our patient, our client, census and building long hours over time.”

– Ralph Laughton,‍ CEO, Heart, Body & Mind Home Care

Jason Growe, CEO of livewell Partners,‌ emphasizes the importance of building strong referral relationships with health systems. He suggests that being a reliable “second choice” provider can unlock doors over time, especially as patient⁤ demand outpaces the capacity of hospital-owned home health programs.

LiveWell Partners operates in multiple states,‍ including Missouri, Kansas, and michigan. The company’s strategy involves⁣ delivering consistent⁤ quality care, being responsive ⁣to referrals, and remaining payer-flexible to build trust‍ and secure long-term partnerships.

“For a long time, we‌ have said that we want to be your​ first second choice…If we’re able to deliver the quality care… it’s going to unlock doors over time.”

– Jason growe, CEO,‌ LiveWell Partners

What’s next

As the home⁤ care industry continues to evolve, providers will need to adapt to changing payment models, demonstrate their value proposition, and build strong relationships⁤ with payers and referral sources to thrive in a⁣ competitive market.