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Amedisys (NASDAQ: AMED) is pushing forward on palliative care growth in 2024 through its innovation arm, Contessa.
The company acquired Contessa in 2021 for $250 million. Contessa’s specialties are high-acuity care in the home, including hospital-at-home and skilled nursing facility-at-home programs. Nevertheless, the company has been making substantial investments in building out its palliative care services, particularly through risk-based contracts.
For now, Amedisys shows no signs of slowing down on palliative care. Expanding palliative care relationships and joint venture partnerships is a priority for 2024, the Louisiana-based home health and hospice provider indicated in a filing with the U.S. Securities and Exchange Commission (SEC).)
“Our expertise and capabilities in these areas deliver value to both the health system and the health insurance payer and give us the opportunity for future expansion within the health care continuum for chronically ill patients, including palliative care services, especially as the U.S. population ages and consumer preferences continue to shift to home-based care,” the company noted in the filing. “Our joint venture partnership model with leading health care systems and our relationships with health plan insurers facilitate our ability to take and manage additional risk for this patient population in value-based arrangements.”
As of Dec. 31, 2023, Contessa was a stakeholder in at least 10 joint ventures that were actively admitting patients, according to the SEC filing. Among them are JVs with Mount Sinai Health System, Baylor Scott & White Health, Memorial Hermann Health System, and Henry Ford Health System, each of which offers palliative care in addition to other services.
Around this time last year, the company also began contracting directly with Medicare Advantage payers, beginning with Blue Cross Blue Shield of Tennessee. Through the agreement, Amedisys will make palliative care available to eligible members among the nonprofit health plan’s 3.3 million beneficiaries.
Contracts like these will become crucial to its palliative care business going forward.
“The key with palliative care is the managed care plans. Medicare Advantage plans recognize the value of palliative care, of paying for palliative care, and [they] understand that it leads to hospice, which leads to a better experience,” Amedisys Chairman Paul Kusserow previously told Hospice News. “It also allows them to offload what’s an extraordinarily expensive time from their cost perspective. But ultimately, the satisfaction from their members and their members’ families is much higher than if their members went without hospice.”
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) 2023 Annual Leadership Conference.
The wild card, however, is Optum. The UnitedHealth Group (NYSE: UNH) subsidiary in June 2023 agreed to acquire Amedisys for $3.3 billion. While Optum has given no indication that it would dial back palliative care, transactions like these come with inherent uncertainties. However unlikely, priorities could change.
Though Contessa has been growing significantly, the subsidiary is still operating at a loss as it continues to lay the foundations for future expansion. Contessa saw an operating loss of $5.9 million in Q4 2023, an improvement from $6.6 million in 2022.
For now however, the company remains full-speed ahead on palliative care.
“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 at the NHPCO conference. “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.”
