Hospices, MA Plan Leverage Data to Align Contract Incentives

As more hospices engage with Medicare Advantage (MA) plans, they may be able to learn from the experiences of some home health providers.

Historically, MA has not covered hospice. Now, many operators are contracting with managed care plans for other service lines, such as palliative care, or they may be participating in the hospice component of the value-based insurance design model.

The value of care in the home is one area in which payers and providers can align their incentives, Scott Powers, CEO of Elara Caring, explained at the Home Care Innovation + Investment Conference in Chicago.


“Everyone needs access to the home and what it provides. It’s a very sticky consumer experience with a lot of engagement and an untapped set of value that’s sitting there in the home,” Powers said. “The payers look at that and ask how they can get closer to the consumer or retailer.”

But providers will have to take care to ensure that contracts are structured to be mutually beneficial.

One of the challenges that Enhabit Inc. (NYSE: EHAB) encountered in 2022 was an overall increase in the Medicare Advantage beneficiaries its home health program serves, executives have indicated in quarterly earnings calls. This meant lower reimbursement, as MA plans often negotiate for payments that are lower than those in traditional Medicare.


To secure more beneficially structured contracts, and expand its MA business, the home health and hospice provider formed a payer innovation team focused on strengthening Enhabit’s value proposition to health plans.

“We established our payer innovation team a little over a year ago, and we’ve been very open and going in and saying, ‘I’m willing to take risk,’” Enhabit CEO Barbara Jacobsmeyer said at the conference. “We’re very proud of our quality outcomes, particularly the things that would drive a payer, like readmission and hospitalization rates. And I’m prepared to actually get into a lot of risk-bearing agreements.”

Quality outcomes are often crucial to establishing payer contracts with MA plans. CMS requires plans to ensure they are working with providers of high-quality care. This means they will be looking closely at providers’ quality data.

The nitty gritty details of data tracking and management matter when it comes to ensuring both a healthy bottom line and quality patient care.

For hospices, this includes performance on quality measures required by the U.S. Centers for Medicare & Medicaid Services (CMS), including the Hospice Care Index (HCI), the Hospice Item Set and Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys.

But the list doesn’t end there, providers will have to demonstrate a solid track record on reducing readmissions, hospitalizations and emergency department visits, and a range of other metrics.

“As we get more diverse and think about all the data we collect, we analyze how much data is sitting out there — whether it’s social determinants data or data that can help drive the care,” Jacobsmeyer said. “I think all of that is going to converge as this industry gets more sophisticated and scaled. That’s going to become valuable.”

Despite those lower rates, relationships with Medicare Advantage plans will grow increasingly crucial in the long term, according to Powers.

“Where the value is going to be more and more is going to be MA,” Powers said at the conference. “It’s important for organizations to try to figure out how they can start to unlock and participate in that value so that it’s not always about just chasing a declining revenue stream.”

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