Home health care had a mere 3% share of the $3.6 trillion U.S. health care market in 2018. Medicare and Medicaid together made up 75% of home health spending in 2018 (see National Health Expenditures 2018 Highlights). Home-based health care today largely comprises face-to-face care covered by Medicare, long-term services and supports funded through Medicaid home and community-based waivers, and wraparound services.
The pandemic has changed this equation. All health care (or most of it) has been home-based— though largely through telehealth. The question for executive teams developing their recovery strategies is how much of that care will remain virtual—and for face-to-face services, what proportion will move to home-based as opposed to returning to traditional office-based services. I got some interesting perspectives on this issue of service location in the “next normal” from Kevin Scalia, Executive Vice President, Corporate Development, Netsmart, during our session Home-Based Services—Opportunities In The Post-Pandemic Health & Human Service System at the recent 2020 OPEN MINDS Management Best Practices Institute.
Netsmart home care customers saw a big decrease in home-based face-to-face services at start of the pandemic, but those service levels have now rebounded. And there has been an increase over this pandemic period in home-based services for consumers needing applied behavioral analysis for children with intellectual and developmental disabilities (I/DD), and for children in the child welfare system. But as he looks ahead, Mr. Scalia sees the reimbursement model adopted for Medicare home care services making its way to behavioral health and other health-related services across all payers. The model, referred to as the Patient Driven Groupings Model (PDGM) is episodic payment for home care, based on diagnosis and incentives driven by outcomes (see Prepare For Impact: The New CMS Home Health Payment Model and New Medicare Payment Model For Home Health Agencies). “I believe this is coming to behavioral health,” Mr. Scalia said.
There are a few reasons why episodic payments are likely to become more common. First, the possibility of “overbilling” for telehealth services is a fundamental payer concern about continuing the liberalized use of virtual care, and episodic payments would partially address that issue. And, episodic payment models can allow payers to pay for “hybrid” service models—combining virtual care, face-to-face in-home services, and face-to-face clinic-based services in a single payment mechanism.
So what are the opportunities to deliver home-based services for provider organizations that are considering adding that service delivery model? Mr. Scalia had a number of interesting ideas. First, partnerships with existing provider organizations. He said there are twelve clinical groups in PDGM—one of them being behavioral health. PDGM base rates are adjusted for comorbidities, risk, and resource needs, with outcomes closely monitored (skilled nursing facilities have also shifted to a similar model, the Patient Driven Payment Model or PDPM). Mr. Scalia observed that most home care provider organizations don’t have the clinical resources to provide behavioral health services and would be open to partnerships. A second opportunity is for provider organizations to build their own home-based service delivery programs—specializing in particular consumer conditions and needs. Either option would prepare an organization to deliver home-based care and also to manage episodic payment arrangements with incentives based on consumer experience and outcomes.
Mr. Scalia also highlighted the opportunity for provider organizations to expand into virtual and home-based primary care. He pointed to a recent survey that found that consumers want to connect with “their own” physician rather than a “random physician”—the model of many new telehealth services. This is a big opportunity for specialty provider organizations that have relationships with consumers, and can protect and extend those relationships by providing primary care services. And I was surprised to learn that this is already happening to a degree I hadn’t anticipated. Netsmart’s use of their primary care module by behavioral health organizations has climbed 77% over the pandemic period.
Another option is in hybrid specialty services for children and young adults. Mr. Scalia cited the recent study by the Centers For Disease Control showing rising rates of anxiety, depression, and suicidal ideation among young adults (see Nearly 41% Of Americans Experiencing Mental Health Symptoms During The COVID-19 Pandemic). He said, “This is an area where health plans are looking for partnerships—and the problem will last long after the pandemic is over.”
So how to prepare for a future of hybrid services? First there is expansion of the technology platform. Episodic payments require new billing systems. Electronic visit verification, workforce management, route optimization, telehealth, and mobile solutions with enhanced security were other technologies that Mr. Scalia discussed as part of the enhanced functionality needed for adding home-based service delivery to a hybrid service model (see What You Should Be Thinking About Now).
Another surprising piece of our discussion of preparing for this shift to hybrid is the need for provider organizations to “go retail” with marketing. “Provider organizations need to build a brand for Medicare,” Mr. Scalia noted. The consumers must want to come to you. And as health plans change their network model—with a single provider network for all payers—the provider organizations with the best “consumer perception” are going to be the ones selected by payers.
What do the many opportunities in this move to hybrid models—virtual, at home, and in clinic— share? Mr. Scalia closed the session with this thought—the focus of any new provider organization service development should be on health plan partnerships. “Health plans are going to go around the hospitals directly to community-based provider organizations—behavioral health, home care, senior living, and more. They want partnerships with them to coordinate care and keep people out of the hospital.”
For more on home-based service delivery, as well as the technologies required to support evolving service models, check out these resources in The OPEN MINDS Circle Library
- More Virtual, Fewer Offices, More Home-Based Care?
- Homebound: The Future Of Managed Long-Term Services & Supports?
- Where’s That Remote?
- Using Remote Patient Monitoring: Improving Outcomes For Consumers With I/DD
- What You Should Be Thinking About Now
- New Medicare Payment Model For Home Health Agencies
- The Pandemic Provides A New Urgency For The Integrated Care Issue
- Aetna Medicaid Launches New Approach To Integrated Care Supporting Children & Families
- Tech Budgeting For Integrated Care & Value-Based Reimbursement
- Using Data To Reduce Costs & Improve Care – Integrated Care Done Right
And for even more, join us on September 17 for the Executive Web Forum, Understanding What You Do Well – & Building New Revenue Streams Through Repurposing Current Capabilities by OPEN MINDS Vice President Richard Louis, III.