As Contessa Health pioneers a growing value-based palliative care-at-home program, they’ve encountered some learning curves when it comes to operating within a new payment system.
Contessa is a subsidiary of Amedisys (NASDAQ: AMED), which the home health and hospice provider acquired in 2021 for $250 million. Contessa’s specialty is high-acuity care in the home, including hospital-at-home and skilled nursing facility-at-home programs.
In June, Optum Health, a subsidiary of UnitedHealth Group (NYSE: UNH), agreed to acquire Amedisys for $3.3 billion.
Nevertheless, the company has been making substantial investments in building out its palliative care services. Since at least 2022, Contessa has been pursuing palliative care reimbursement through Medicare Advantage.
Earlier this year, the Amedisys subsidiary entered into its first full-risk Medicare Advantage contract to include palliative care with Blue Cross Blue Shield of Tennessee. Contessa is currently in talks with a number of other Medicare Advantage organizations to pursue similar, but not identical, contracts, Dr. Gavin Baumgardner, vice president and national medical director of Palliative Care at Home at Contessa, said at the National Hospice and Palliative Care Organization (NHPCO) Annual Leadership Conference.
“We’re in talks with a couple of other payers and also joint venture partners about expanding our value-base; we’re really focusing on that right now. That model is a mix of in-person and virtual visits, nurse practitioners, RNs, social workers and community health workers,” Baumgardner said. “I can tell you that the next contract we enter, and the next program we start up in the value-base is gonna look different than this one, because we’ve had a lot of lessons learned thus far.”
Though some of the company’s palliative programs still rely on fee-for-service reimbursement or joint ventures, Contessa’s model within Medicare Advantage is oriented around full upside/downside risk with shared savings programs and incentives based on quality metrics.
Medicare Advantage plans have the option to cover palliative care as a supplemental benefit, as well as through palliative care components of the value-based insurance design (VBID) model demonstration.
In 2022, 147 plans offered home-based palliative care across 17 states, a 7% increase in the number of plans compared to the prior year. That growth has continued into 2023, with at least 157 plans offering home-based palliative care, according to data from Washington, D.C.-based research and consulting firm ATI Advisory.
“I really firmly believe that VBID over time will help bring palliative to the forefront,” Baumgardner said. “Palliative care has always kind of sat in the shadows of hospice. You’ve had these fee-for-service models out there that have been very, very effective. But I don’t think we fully leveraged their capabilities in helping take care of patients over an extended period of time. There’s been a really slow uptick in home based palliative care.”
Among Contessa’s lessons-learned nine months into their first value-based palliative contract is a need to focus on staff training — even for those who previously worked in hospice.
Value-based palliative care models often build in unique elements related to disease management, goals-of-care conversations, chronic disease management and multi-specialty coordination of care, according to Baumgardner.
“Another skill set is understanding the revenue model and the services needed to support that model,” he said. “What we mean by that is how you set up a value-based contract is going to then inform the team that can be assembled and put together [what] is going to then inform the metrics of success and how you go about doing that.”
Amedisys has positioned Contessa as an engine for innovation and growth with its suite of high-acuity home care services, its blooming palliative care business and legions of joint ventures.
The subsidiary is also a big driver of revenue growth for Amedisys. The segment’s net service revenue rose to $4.4 million, compared with $3.5 million in Q3 2022.
Amedisys executives have continuously expressed optimism about Contessa’s growth potential as it expands its hospital-at-home and community-based palliative care programs.
“We have a tremendous opportunity for growth [with Contessa], and maybe all of that is underpinned by just an inherently fragmented market growing behind us, the tailwind of the aging population,” Amedisys CEO Richard Ashworth said in March.
