Demand for home care services remains steady, but there is little else in the industry. With rapidly advancing technology, immediate threats such as proposed home health fee reductions, and regulatory changes such as the companion exemption, healthcare providers are navigating an unprecedented combination of challenges and opportunities today.
Amid significant disruption, health care providers are looking for ways to take advantage of new opportunities while pleading for clear sailing, according to experts at Home Healthcare News' FUTURE conference. By adopting risk-based reimbursement models, implementing AI-powered technologies, and improving efficiency, healthcare providers can work towards a future where healthcare is centered in the home.
These opportunities come amid a number of challenges, including significant reimbursement pressures on home health care providers.
For example, as Medicare Advantage becomes more widespread, providers will need to think differently.
“We have data showing that Medicare Advantage is now the primary payer, accounting for over 50% of claims data across all payment types,” Luke Rutledge, president of HomeCare Homebase, told FUTURE. “That's going to be the future of home care. So we have to really get used to it.”
Dallas-based Homecare Homebase is one of the largest technology and management services companies serving home care providers.
The growing share of Medicare Advantage enrollees is putting home health care providers in a “very tough situation,” said Bud Langham, an advisor and former executive vice president of home health and hospice at Enahavit (NYSE: EHAB).
“We've been very public about this, but you have to be willing to say no and walk away, and that's incredibly difficult,” Langham said. “We're all striving for growth. But at the end of the day, it comes down to how do you negotiate contracts that allow you to care for people in a way that delivers good outcomes and a great experience? That means you're running up against payers who have to say no.”
Enhave, based in Dallas, Texas, provides home health and hospice services in 34 states, with 249 home health locations and 114 hospice locations. The company has publicly withdrawn from some Medicare Advantage payers, specifically UnitedHealth Group's (NYSE:UNH) UnitedHealthcare.
Wrangham and Rutledge said the biggest concern for home health care providers is the proposed reduction in home health Medicare rates, which would amount to a 9% reduction. Rutledge said the proposed cuts would significantly reduce provider revenue and ultimately have a negative impact on access.
Dan Deak, founder and CEO of Home Halo Franchising, said the companion exemption proposal is the biggest disruptor for home care providers.
“The one that could potentially have the biggest impact is the caregiver exemption provision,” Deak said. “There are so many more people in need of care now than when this rule was phased out previously. We are already facing a shortage of care workers. Will this make the problem even worse? I'm interested to see what conditions the market endures and adjust accordingly.”
The companion exemption provision has sparked controversy in the industry. While some stakeholders are calling the U.S. Department of Labor's (DOL) proposal a “victory,” others warn it will further worsen the industry's staffing problems.
Home Halo, based in Greenwood Village, Colorado, is a non-medical home care franchise with operations in eight states. This provider provides assistance with activities of daily living (ADL), home management assistance, respite care, and specialized dementia services.
Industry tailwinds
The proposed rate cut is EnHavit's biggest challenge, but it is not without signs of hope. The company's chief financial officer recently said that if CMS's proposed rules pass as proposed, the resulting disruption will create more growth opportunities than the company expects in 2025.
There are other reasons why providers welcome recent changes at the federal level.
“If you look at what the government is doing right now around health technology, opening the door to innovation, supporting innovation and patient-facing applications, building interoperable networks, there are some really great opportunities for early adopters to get on board and change the way healthcare is done through initiatives like turning off the clipboard,” Wrangham said. “There are some good things, but these are definitely the threatening issues that we have to address first.”
Beyond regulation, opportunities for providers primarily come in technology-enabled packages, often equipped with AI-powered tools.
Rutledge said providers are primarily interested in scribing and ambient listening, tools designed to reduce documentation and burden. The desire for these tools comes down to the need to automate data entry, he said, which Rutledge called “the wave of the future.”
According to Deak, scheduling automation is a top priority for home care companies to improve efficiency.
“For us, one of the biggest bottlenecks in this large enterprise, and I think all home care agencies are dealing with this as well, is that scheduling element,” he said. “AI will have a big impact on that. If we can retain more caregivers through more efficient scheduling, we'll retain more customers and our business will continue to grow.”
Improving your scheduling process also has the important benefit of improving retention rates.
“Caregivers are not going to leave you for an extra 50 cents an hour,” Deak said. “The reason they leave you is because you're not giving them the number of hours they need and the duration they need. And that's why there's so much caregiver turnover. If we can focus on better scheduling, and use the tools that will mature now and in the near future, we can retain more caregivers and retain more clients in the process.”
Similarly, home health care providers can't “work their way out” of industry-wide staffing challenges, Wrangham said. Instead, Enhave advisors recommended that healthcare providers focus on providing a great experience for clinicians. Wrangham said technology is one of the keys to creating a positive work environment for home health care providers to support clinicians even when they are in the field.
The future of home care
While the industry faces changing challenges and new opportunities, one thing remains the same: “Our population is aging,” Dieck said.
“There will be more people taking care of it,” he said. “I think it's going to take a holistic approach to provide care for all of these people.”
Despite the forces of change at work, Wrangham predicts that the industry may not evolve significantly over the next decade as health systems focus on filling beds in growing hospital systems, but there is potential for “fundamental change.”
“The optimistic side of me thinks this should fundamentally change, and that (all health care providers) should be caring for twice as many patients as they are today, because the people who need care are out there,” Langham said. “We're going to do this on a risk-based contract, and our physical office is going to be very lean. … Our outcomes are going to be better and our total cost of care is going to be better because the system recognizes all of us in that room and leans in and says, 'Let's do it that way.'”
