Medicare Advantage Change Could Lead To Payments Opportunities

One of the latest changes to federal rules regarding non-medical home care services could provide more business opportunity to firms that serve that market and handle such backend tasks as billing and payroll.

In April, the U.S. Centers for Medicare and Medicaid Services (CMS) said that Medicare Advantage would, for the first time, cover those services, through which caregivers help senior citizens in their homes. The decision allows that care to be treated as a supplemental benefit under Medicare Advantage programs.

“CMS is expanding the definition of ‘primarily health related’,” the federal agency said. “Under the new definition, the agency will allow supplemental benefits if they compensate for physical impairments, diminish the impact of injuries or health conditions and/or reduce avoidable emergency room utilization.”

According to the CMS, 35 percent of Medicare beneficiaries take part in Medicare Advantage, with experts predicting significant increases in the years to come.

“Insurers and payors have been positioning themselves to better align with post-acute care services for years. As the focus also shifts toward the high-cost, high-needs, dual-eligible patient populations of people who qualify for both Medicare and Medicaid, that has provided additional incentive to cover personal care services as well,” reported Home Health Care News.

This is a significant deal for seniors, because they usually pay out of pocket for non-medical home care services, according to experts. And it could turn into a lucrative opportunity for companies active in this market, too.

One such company, called Honor, partners with local home care agencies and other providers to manage such tasks as caregiver payroll, recruiting, scheduling, insurance and legal issues. In May, the company accounted a $50 million Series C funding round led by Naspers Ventures, with existing investors Thrive Capital and Andreessen Horowitz also taking part. That round brought the company’s total funding to $115 million.

The company will use that fresh capital in large part to fund expansion of its caregiver network. For now, Honor operates in San Francisco, Los Angeles, Albuquerque and Dallas.

“There’s over 21,000 small providers doing” these services today, Honor President Nita Sommers told MobiHealthNews. “Very typically, it is a small mom-and-pop agency that’s servicing, like, 30 clients with 50 caregivers. It’s a very fragmented industry. That fragmentation has not been ideal for a lot of reasons: It’s hard for consumers to navigate, (and) it’s hard for those caregivers who work in this field to get a lot of infrastructure and support.”

In a way, the move to provide the payment and other backend support from home health services newly covered under Medicare Advantage is roughly similar to the move by some other companies to serve the developing infrastructure needs of the gig and freelance economy, which continues to grow and gain importance. Recently, Karen Webster and PEX CEO Toffer Grant had a discussion about providing state-of-the-state spend management services to companies that rely on gig and freelance workers.

Meanwhile, the use of technology to improve healthcare payments is gaining increasing focus, even beyond the recent change regarding Medicare Advantage. For instance, the Electronic Healthcare Network Accreditation Commission, or EHNAC, recently launched its Trusted Exchange Accreditation Program to “leverage existing industry-wide identity verification, authentication and privacy/security frameworks and best practices in use across the ecosystem,” according to a press release. The program could eventually lead to a better payments regimen for healthcare providers.