Medicare Advantage Plans get a Rate Increase

Stephen Tweed | April 10, 2019 | News and Views, Research & Trends
By Stephen Tweed  Medicare Advantage Plans will receive a 2.53% increase in the amount they are reimbursed in 2020, according a new letter from CMS.  They may use that to add In-Home Support Service as a supplemental benefit. One of the hottest trends in private pay home care that we are watching is the new…

By Stephen Tweed 

Medicare Advantage Plans will receive a 2.53% increase in the amount they are reimbursed in 2020, according a new letter from CMS.  They may use that to add In-Home Support Service as a supplemental benefit.

One of the hottest trends in private pay home care that we are watching is the new opportunities under Medicare Advantage.  If you have been following our articles, you know that in April 2018 CMS issued a letter permitting Medicare Advantage plans to offer nine new Supplemental Benefits. In-Home Support Service is one of those added benefits.

In 2019, 3.4% of the 3,700 MA Plans indicated they would offer In-Home Support Service as one of their benefits.

On April 1, 2019, CMS issued a “2020 Medicare Advantage and Part D Rate Announcement and Final Call Letter” that includes final policy and payment updates to Medicare Advantage (MA) Plans for 2020. This letter announced the 2.53% rate increase, which is less than the 3.4% rate increase for 2019. MA Plans will be able to use this additional revenue to fund the supplemental benefits they will offer.

The final rule also gives Advantage Plans more flexibility to offer supplemental benefits to patients with chronic conditions.  “With this new flexibility, coverage will be determined by what a person needs, not just what’s on a list of allowable services,” said Seema Verma, Administrator for the Center for Medicare and Medicaid Services.

What Industry Leaders are Saying

As you know, we have been watching this trend closely, and having conversations with industry leaders about the short term and long term potential for this opportunity.

Our friend and colleague, Elizabeth Hogue, a home care attorney, has this to say, …

“This expansion gives home care providers of all types the opportunity to partner with MA Plans in the care of chronically ill patients.  Home care providers will make great partners for MA Plans as they offer supplemental benefits to chronically ill enrollees because if any group of providers understands so-called social determinants of health, it is certainly home care providers!

Collaborating with MA Plans may, however, be rocky for home care providers at first.  It looks like private duty agencies, for example, are especially well-positioned for such partnerships.  Anecdotally, however, some MA Plans have apparently told private duty agencies that they will partner only with home health agencies that are Medicare certified.  MA Plans don’t quite know how to work with home care providers yet, but, with help, they can learn for the benefit of patients.”

In a conversation with a top executive at one of the country’s leading Medicare Advantage plans, this person made the following comment …

“The Trade Press has spun this story into more than it really is.  We will all be dipping our toe into the pool very carefully.”  

He went on to tell me … “Local MA Plans will decide to add these supplemental benefits based on their ability to attract more enrollees into their plan.  The question is, ‘Does a beneficiary in a local market want this service? Will they join an MA Plan to get it?'”

CareLinx, a digital home care company, has taken a lead in the home care industry in pursuing Medicare Advantage positioning. Sherwin Sheik, the CEO of CareLinx, sees this as a big opportunity.

Right At Home, the Omaha NE based home care franchise company has taken the initiative to reach out to explore this opportunity. The company announced back in August of 2018 that they had entered into a “Preferred Partnership Agreement” with Humana, the second largest Medicare Advantage insurer.

So Far, No Revenue

While this trend has been a hot topic for discussion in the industry, we don’t know of any home care companies who have yet collected revenue from a Medicare Advantage Plan.  In the Home Care CEO Forum, we have four CEO Mastermind Groups with 40 companies participating. These companies are in the top tier of home care, with most generating revenue above the 90th percentile.  None of these companies have reported to us that they have any relationships or have generated any revenue from Medicare Advantage Plans.

The Four Big Questions we are asking are:

  1. Will MA Plans offer these supplemental benefits?
  2. If so, will they require that in-home care be provided by a Medicare Certified Home Health Agency with whom they already have contracts?
  3. If they don’t require Medicare Certification, how will they select the non-medical home care companies to work with?
  4. If plans do offer In-Home Support Service through an independent or franchise home care company, how with they authorize care, how many hours will they authorize, and what hourly rate will then pay?
Learn More About Home Care Industry Trends

One of the best ways to stay on top of trends in the home care industry is through regular conversations with other leaders in the industry. You can do that by being a member of a Home Care CEO Mastermind Group sponsored by the Home Care CEO Forum.  If you are an independent agency that generates between $1.5 million and $6 million in private pay or Medicaid Waiver revenue, and you would like to be part of a peer study group, visit the Home Care CEO Forum, and click on Mastermind Groups.



Stephen Tweed
Stephen Tweed, CSP, began his journey as a business strategist in home health care in 1982. Today, Stephen is among the top thought leaders in Home Care strategy and management. He has worked with top 5% companies from across the US. He is a sought after speaker at from national and state association events.

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