Amedisys doesn’t care about the new payment rate for Medicare Advantage
Amedisys will soon be in a league of its own, at least to some extent.
Undoubtedly, there are many independent, home-based companies still on the market that are listed on the stock exchange. But the Baton Rouge, Louisiana-based supplier has seen its direct partners go one way or another over the years, especially lately.
Humana acquired all Kindred at Home. Encompass Health is currently in the process of separating its home health and hospice segment into its own entity, Enhabit Home Health & Hospice. UnitedHealth Group has agreed to buy LHC Group Inc.
“ The UnitedHealth Group-LHC Group deal didn’t surprise any of us, ”Amedisys CEO Chris Gerard said in the company’s first-quarter earnings call on Thursday.“ We saw what Humana did with Kindred, and other plans were very clear about wanting really get into the home provider space. When you take a step back and look at it, it makes sense to have that ability. ”
Gerard recently took over control of Amedisys president and former CEO Paul Kusserow. He has entered the new position in a company with a new place in the home health market, which is changing its place in the general health system.
Amedisys provides home health, hospice and personal care services through its 21,000 employees in 38 states and the District of Columbia. In total, it has 548 care centers and treats 445,000 patients annually. In addition, it provides inpatient home care through Contessa, which it acquired for $ 250 million last year.
Continuing with his comments on the LHC Group deal, Gerard remarked that home health acquisitions seemed to be one of the last “levers” that plans can pull, so to speak.
At the same time, Medicare Advantage (MA) plans to reach a higher proportion of beneficiaries and play a larger role in home care is one of the inevitable ones that companies like Amedisys have to contend with.
“We know what Medicare Advantage penetration is for seniors, and that’s accelerating,” Gerard said. “We’ve also said many times that we need to be able to change the relationship between providers and Medicare Advantage to really get the best value out of the care we get and get paid just for it.”
MA plans and home health care providers have a tenuous relationship. Unless, of course, one has bought the other. Right now, home health companies are paying attention to MA plans with a “significant” discount, according to Gerard.
Recognizing this, Amedisys is talking about its problems with these current relationships and trying to make new ones.
Achieving a balance in relationships that satisfy both parties is what the company is trying to do. It is not an easy feat, no doubt, but it is being fought and tried to be done in the very near future.
“Plans want more access to home care and there is still no fair payment for it, so we are looking for models,” Gerard said. “And hopefully something will be announced, hopefully soon, about a new kind of model that will push us further into Medicare Advantage. [one] this will allow us to expand our margins in this business and also free up capacity with our existing clinical staff. We are very close. ”
Global revenue was about $ 545 million during the Amidisys quarter, up 1.5% year-on-year. Home health care revenue was $ 335 million, up 2% year-on-year.
Meanwhile, Hospice revenue rose marginally from $ 191 million in the first quarter of last year to $ 193 million this year. Personal care decreased by $ 3 million the previous year, from $ 17 million to $ 14 million.
Payment rate expectations
Wage inflation, the omicron variant, and contract labor were the main tailwinds for home health care providers in the later half of the fourth quarter and the first quarter of this year.
Suppliers had high quarantine rates and relied on contract labor, a significant expense, to handle cases.
Amedisys expects better – and less – agreements with staffing agencies for the rest of the year. And it has improved in terms of retention, according to Gerard.
“2022 has started very well,” he said.
That said, Medicare and Medicaid Service Center (CMS) payment rate proposals for other settings have worried some home health care providers about what awaits them.
Rates have not been adjusted for inflation. And, in general, what happens in the space of specialized nursing facilities (SNF) is a good indicator of what will come in the proposed rule for home health.
“The bottom line is that we don’t know what’s going to happen,” said David Kemmerly
The head of legal and government affairs at Amedisys also told the call. “The SNF rule is interesting to read, in terms of seeing what it may or may not mean to us, but we don’t know.”
However, Amedisys is not concerned about any warning signs that may exist in the proposed rules of other environments.
“We feel there are many reasons why we can manage and deal with any proposed behavioral cuts,” Kemmerly said. “And historically, between the proposal and the final rule, things change. And so we are comfortable with the data and we are comfortable with our position to avoid these cuts if they are proposed. ”