Nonprofit Home Health & Medicare Advantage: Survival Strategies
Nonprofit home health agencies face a crisis: unsustainable reimbursement rates from Medicare Advantage plans threaten their operations, forcing some to cut services. This challenging landscape demands immediate action,as revealed in a new report. Discover how low Medicare Advantage reimbursement is squeezing providers, notably smaller organizations struggling to negotiate with powerful health plans. Experts like Holly Chaffee and Dorothy Davis share insights into the financial pressures and provider closures stemming from this trend. This article explores survival strategies, including innovative payment systems and community engagement, vital for long-term sustainability.Find out the crucial need for federal intervention and what role AI and streamlined processes will play. Keep up to date with the latest trends in healthcare, from reimbursement models to government assistance, by reading our complete coverage at News Directory 3––where we will guide you on the most imperative stories. Discover what’s next for home health agencies.
Medicare Advantage Plans Squeeze Nonprofit Home Health Care Providers
Nonprofit home health care agencies are facing increasing financial pressures due to unsustainable reimbursement rates from Medicare Advantage (MA) plans. This trend is forcing some providers to discontinue services under specific MA plans, threatening their ability to serve vulnerable populations.
Holly Chaffee, CEO of Care Central VNA & Hospice in Gardner, Massachusetts, said that while some payers reimburse at Medicare fee-for-service rates, others do not cover costs. Care Central offers services including skilled nursing and rehabilitation therapy.
According to KFF data, 54% of eligible Medicare beneficiaries, or 32.8 million people, were enrolled in a MA plan as of 2024.Care Central’s patient base is 57% MA and 43% Medicare.
Dorothy Davis,CEO of Visiting Nurse Health System in Atlanta,which serves over 15,000 patients annually across 57 counties,noted the difficulty smaller providers face negotiating with larger health plans. ”Publicly traded businesses have competencies and teams dedicated to negotiating with payers,” Davis said.
Chaffee said her institution has terminated care for patients under certain plans because payers are not reimbursing appropriately. Similarly, new Day Healthcare, a for-profit agency with locations in multiple states, has also withdrawn from agreements with some payers due to unfavorable rates and pre-authorization terms, according to CEO G. Scott Herman.
Davis noted that lower payer reimbursement rates are contributing to closures in the home health sector.”We’ve seen more and more nonprofits going out of business or selling,” she said.
Chaffee called for federal assistance to support nonprofit providers. “The federal government needs to step in with thes insurance companies…and tell them to cover our costs,” Chaffee said. “They need to pay at least what Medicare is paying.”
Chaffee added that providers who only accept Medicare may face sustainability issues as Medicare advantage penetration increases. She said that her organization is developing innovative payment systems and collaborating with accountable care organizations to ensure sustainability.
Davis said community engagement is also crucial. She actively seeks input from donors and investors to understand community needs and align strategies accordingly.
What’s next
Home health agencies are exploring strategies such as using AI for documentation and streamlining processes to improve efficiency and navigate financial challenges posed by Medicare Advantage plans.