If your health plan is considering offering home care as a supplemental benefit to Medicare Advantage (MA) beneficiaries, there are a few important things to know about how to succeed in the home care market. The following Q&A article can get you started in understanding the home care landscape and its many health and financial advantages for Medicare Advantage plans.

What is home care? How can it help MA plans?

Home care is care provided in the home by caregivers who assist seniors with activities of daily living (ADLs), instrumental activities of daily living (IADLs), and key social determinants of health (SDoH).  Most home care is long-term care to help people live independently and safely at home, versus other facilities, for as long as possible. Home care is sometimes also referred to as attendant care, companion care, custodial care, personal care, homemaker services, non-clinical care, non-medical care, personal care, and unskilled care. Some of the services typically performed by a home care aide in a senior’s home include:

  • Transportation and errands
  • House cleaning services
  • Medication reminders
  • Shopping and meal preparation services
  • Companionship to reduce social isolation and improve mental health
  • Assistance with walking and light exercise
  • Help with personal services including dressing, bathing, toileting or grooming
  • Respite care for family caregivers

Home care offers MA plans many advantages.

  • It keeps seniors safe and independent, which prevents or postpones costly institutionalization.
  • It’s effective: personal, one-to-one care provided in a reassuring environment by caring individuals has positive health outcomes. Out-of-home facility care can be stressful to seniors, include complications, and have higher costs.
  • It’s efficient: no room and board expenses, no food expenses.
  • Is the preferred and most satisfying form of care for seniors, which promotes high customer satisfaction.

What's the difference between home care and home health care?

While home caregivers and home health caregivers both serve seniors in the senior’s home, the tasks they perform and the qualifications they have are different.  With home health care, the caregivers are licensed health professionals like nurses and physical therapists, and the patients they serve are being treated for an illness or injury. The goal of the treatment is for seniors to recover from illnesses or injuries and regain independence. Some of the services home health care workers provide include:

  • Medical assessments
  • Wound care
  • Monitoring serious illness and unstable health status
  • Pain management
  • Disease and medication management
  • Medical social services
  • Intravenous or nutrition therapy
  • Injections

Why offer home care to Medicare Advantage beneficiaries?

As individuals age, physical and mental health can deteriorate and medical conditions can multiply, leading to multiple, expensive hospital and skilled-living-facility stays.

With home care assistance, senior health can be monitored and stabilized in a low-cost environment (the home) and health plans can pay fewer expensive hospital and other bills.  Additionally, offering home care to qualified seniors can help health plans preserve the health and quality of life of seniors, reduce hospital readmissions, isolate vulnerable seniors from sick hospital patients, improve health outcomes, and lower total cost of care.  

Preserve health, improve quality of life.  

Getting older can bring major life changes that impact senior health and quality of life. Compounding or escalating health problems, medication side effects, retirement, losing a spouse, losing friends, children moving away, losing the ability to drive, becoming increasingly isolated – these are everyday challenges for seniors. Which is why home care is so important.

Having someone come into the home to help with ADLs such as transportation, housekeeping, shopping for food, meal prep, medication reminders, companionship, mobility, bathing, exercise and more – can improve senior physical and mental health and lower healthcare costs. Someone to watch over me – a good song with a great home-care message.  

Avoid hospital and skilled facility costs.  

According to LongTermCare.gov, someone turning age 65 today has almost a 70% chance of needing some type of long-term care, and 20% of people will need care for longer than five years.

Given those statistics, it’s important for health plans to decide where that care will take place as that decision has remarkable financial implications.  

According to Genworth, the 2018 national median monthly costs for different types of care include:

  • Adult day care: $1,560.
  • Assisted living care: $4,000
  • Homemaker services (home care): $4,004
  • Home health care: $4,195
  • Nursing home semi-private room: $7,441
  • Nursing home private room: $8,365

Reduce hospital readmissions.  According to Managed Healthcare Executive, there are nine ways health plans can reduce hospital readmissions, and home care has a role to play in all of them.

  1. Post-discharge doctor visits. Encouraging seniors to follow up with their primary care doctors within one week of discharge works if seniors can drive or have other modes of transportation – and some can’t and don’t. Engaging qualified seniors with a home caregiver can help ensure that important post-discharge milestones are met: doctor visits, medication pickups, etc.
  2. Health literacy. Home caregivers can listen to discharge instructions with seniors, drive them home, and help them implement discharge instructions in-home.
  3. Readmission prediction tools. Prediction tools look at clinical and administrative data to predict which patients score high for hospital readmissions. Seniors with high readmission scores can be paired with in-home caregivers to take them home and address their needs.
  4. Extend your reach into the home. Health isn’t just what happens at the doctor’s office, the pharmacy, or the hospital. Health happens at home. Creating systems and processes that include home care as part of the care continuum can help health plans improve senior health and reduce readmissions.
  5. Use outside sources. Real-time health data from inside the home provides unprecedented early intervention opportunities for health plans. Some home care providers have proprietary technology that uploads and syncs in-home data to population / care-management dashboards. Daily dashboard updates and alerts can help plans catch potential problems before they escalate, intervene, prevent unnecessary utilization, and seamlessly coordinate care with care-team stakeholders and providers.
  6. Get pharmacists to help. Pharmacists can assess the complex medication regimens of patients following hospitalizations, and caregivers can provide medication pickups and reminders in the home.
  7. Make it personal. Not all patients love technology, but they do like friends. In-home caregivers meet patients where they are, build trust, and help seniors accomplish their health goals.
  8. Consider all the patient’s needs. Care coordination and communication between home caregivers and health plans can keep a readmission prevention plan running successfully and as designed.
  9. Consider the history. High-risk patients that are unengaged with their health often have other unmet ADL, IADL or SDoH needs at home. Home caregivers can help identify these needs and work in partnership with health plan care-management teams to improve patient engagement and health.

Improve health, lower costs.  CMS has recognized the value of home care and in the past two years has reinterpreted standards, expanded definitions, created new categories, and provided new freedoms to MA plans to include home care programs in their supplemental benefits.

  • In 2019, CMS reinterpreted the standards for health-related supplemental benefits in MA “to include additional services that increase health and improve quality of life, including coverage of non-skilled, in-home supports.”
  • CMS also expanded the definition of “primarily health related” to allow supplemental benefits that “compensate for physical impairments, diminish the impact of injuries or health conditions, and/or reduce available emergency room utilization.”
  • For 2020, CMS created a new category of supplemental benefits for the chronically ill, allowing MA plans to consider social determinants of health as a factor for benefits eligibility.
  • CMS has now given insurance carriers license to provide a range of non- medical, in-home benefits, such as personal care services, telehealth, transportation and nutrition support.

Payers who have already adopted some form of a home care program include UnitedHealthcare, Humana, Anthem, Aetna, SCAN Health Plan, CareMore, HealthFirst, People’s Health, and likely more. The twin goals of these programs are to improve health outcomes and lower total healthcare costs.  Per the Milliman report commissioned by Better Medicare Alliance, in 2019, MA plans expanded their benefits in the following ways and concentrations:

  1. In-home support services: 51 plans offered this benefit.
  2. Home-based palliative care: 29 plans offered this benefit.
  3. Medically approved non-opioid pan management: 22 plans offered this benefit.
  4. Adult day care services: 0 plans offered this benefit.
  5. Standalone memory fitness benefit: 0 plans offered this benefit.

In-home support services topped the list, with many payers eager to start the process of extending care in home, establish benchmarks, and leverage these programs to improve health and lower costs.  The payer perhaps most known for its leadership in leveraging home care to drive down costs is Humana.

In 2015, it launched a “Bold Goal” population health strategy to improve population health outcomes for its MA members in seven communities in five elements of care: primary care, home health, pharmacy, behavioral health and social determinants of health.  

The health improvements and cost savings for Humana have been commendable. From 2015 to 2018, its MA members in Bold Goal communities reduced their number of Unhealthy Days (their metric) by 2.7%, while fee-for-service members saw their Unhealthy Days increase.

Its members in value-based care settings are 7% less likely to end up in the emergency room and 5% less likely to be readmitted to the hospital.

Additional impacts: they’re experiencing 44% fewer hospitalizations, and with average hospitalization stays costing over $10,000, paying a caregiver $20 or so per visit to reduce hospitalizations or prevent readmissions can result in real bargains.

Who is a good fit for home care services?

Not all Medicare Advantage beneficiaries need or want home care, so it’s important to define eligibility. One such tool for determining eligibility is the following Caregiver Relief Supplemental Benefit Eligibility Screening Tool. It consists of five questions.

  1. Is the member chronically ill / disabled / frail and does he / she require assistance with two or more of these needs: bathing, toileting, hygiene, dressing, eating, meal prep, personal care cleanup, laundry, and / or cannot be left alone for four or more hours?
  2. Does the member have an unpaid caregiver in home providing two or more of the services listed above? (Demonstrates need.)
  3. Is the member not receiving in-home medical nursing services or other government programs that pay for personal care or homemaking services?
  4. Does the member need long-term care?
  5. Is the member recently discharged from a hospital and at risk for readmission?

Health conditions can also help establish who is a match for home care.

The following list is not comprehensive, but these health conditions can serve as a place to start in evaluating home care eligibility:

dementia, Alzheimer’s, Parkinson’s disease, multiple sclerosis, COPD, cystic fibrosis, scleroderma, congestive heart failure, muscular dystrophy, rheumatoid arthritis, diabetes, stroke / cerebrovascular accident, hemiplegia and hemiparesis following cerebral infarction, skilled RN services related to home health / hospice setting, physician management of patient home care, hospice, pressure ulcer, muscle wasting and atrophy, difficulties in walking, age-related physical debility, at least two or more hospitalizations or four or more ED visits in last rolling 12 months, history of two falls in last rolling 12 months, fall, adult failure to thrive, abnormal weight loss, underweight, cachexia, enrolled in any high-risk / complex / transitional care management program over past rolling 12 months and has ADLS support, mobility / transportation needs, nutritional needs, medication adherence support needs, identified Part C or D HEDIS / Stars gaps in medication adherence measures, assistance scheduling a diagnostic test and assistance with transportation (A1C testing, mammography, colonoscopy), and frailty indicators / limitation of activities due to disability.

How much will home care cost?

How much home care will cost is something of a trick question. If used as a supplemental benefit for eligible seniors, home care can save health plans money and become a source of revenue. The more appropriate question may be how much Medicare Advantage plans are losing today because they’re not implementing home care.

Preventive care lowers total cost of care.  To calculate home care return on investment, health plans can start with what in-home care costs per hour – a typical home-care aide makes between $15 to $25 per hour – and determine how many hours they’d like to offer eligible beneficiaries per month or quarter.

The more hours offered, the richer the benefit. Calculate, and then compare those costs to actual medical costs.  The majority of patients diagnosed with heart failure, for example, will be hospitalized at least once, and more than half will be hospitalized three or more times within 4–5 years of diagnosis.

These hospitalizations are resource-intensive with inpatient care costing an estimated $83,980 over the lifetime of each patient.

Almost 25% of these patients are readmitted within 30 days. How much will your health plan save if you reduce or avoid hospitalizations and readmissions in this segment of your population by 20 percent or more? Do the math, you’ll see how home care can save your health plan money while preserving the health and quality of life of seniors. In this scenario, everyone wins.

Is home care easy to implement?

The home care provider industry is fragmented and local. Most home care aide providers operate in one to several regions, serving select cities or states only.

There are few national home care agencies or home care networks like CareLinx who serve the needs of health insurance companies who want to offer home care benefits to eligible beneficiaries nationwide. Given the short supply of national home care providers who can operate under one contract, MA plan contracting may need to be cobbled together using several local aide providers.  

In addition to evaluating network coverage (national vs local), payers will also want to review home-care providers’ day-to-day operations for fit as well as technology capabilities.

Some home care providers have technology solutions that capture real-time data in the home that payers can turn into actionable changes in care, with supporting metrics that prove the quantifiable value of each program, and some providers don’t.  However plans choose to implement home care, improving health with end-to-end solutions may forever be part of the health care continuum.

Health plans can get a head start by embracing home care. Offering home care as a value-added benefit or service (VAIS) will help you quickly gather the data you need to quantify ROI without making a substantial investment.

Carving out populations that are high-risk or chronically ill is a good choice as is using home care in transition programs.  

Whatever you decide to do, start now. Home care is the future of healthcare for Medicare Advantage plans and their beneficiaries.

August 30, 2019
Health Plans

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