Use of Preferred Provider Agreements
By Elizabeth E. Hogue, Esq.
a highly competitive marketplace, home care providers of all types, including home health agencies, hospices, private duty/home care companies and home medical equipment (HME) suppliers are looking for a “leg up,” especially for patients with certain types of payors. Providers may be able to cement important referral sources using Preferred Provider Agreements. For example, a provider may wish to approach an assisted living facility (ALF) to see if it is interested in a preferred provider relationship. If so, then management of the ALF may want to sign a Preferred Provider Agreement in order to further a relationship with this provider.
The anti-kickback statute may apply if providers involved in referral arrangements receive any type of federal or state funds, including, but not limited to, payments for services provided from Medicaid waiver programs, managed Medicaid programs, the Tri-Care Program, the VA, or any other state or federal programs. The anti-kickback statute generally says that anyone who either offers to give or actually gives anyone anything in order to induce referrals has engaged in criminal conduct. There are, however, several exceptions to this statute that may be applicable.
Providers should ask two crucial questions about the application of the anti-kickback statute to referral arrangements:
- Is there a kickback or rebate?
- If so, is there an exception or "safe harbor" that permits the arrangement even though it would otherwise violate the statute?
A kickback or rebate occurs when a provider receives referrals from another provider and something flows back to the referral source from the provider who received referrals. If there is a kickback or rebate, providers must automatically ask the second question listed above. If they fail to utilize applicable exceptions, they may miss out on useful marketing strategies that are likely to result in numerous referrals.
With regard to Preferred Provider Agreements, however, it is important to note that they can be structured so that no money or anything of value changes hands between providers and the other party involved. If so, there is no kickback or rebate.
The parties to Preferred Provider Agreements must also make certain that they honor patients’ choices of providers. There are a number of sources of patients’ right to freedom of choice of providers applicable to preferred provider arrangements, including:
- Court decisions or the common law says that all patients – regardless of payor source, type of care rendered, or types of providers involved – have the right to control the care they receive and who provides it.
- A federal statute that guarantees all Medicare and Medicaid patients the right to freedom of choice of providers. This statute may be applicable if either party receives reimbursement from the Medicare or Medicaid Programs.
When patients express preferences for certain providers, however, their choices must be honored despite the existence of Preferred Provider Agreements. The agreement of the parties to honor patients’ choices should be included in Preferred Provider Agreements.
The market to provide services to patients in their homes is expanding, but the competition for referrals among providers seems to be extremely fierce. Providers are well advised to utilize Preferred Provider Agreements to help them to increase and/or maintain referrals in order to help ensure profitability.
©2024 Elizabeth E. Hogue, Esq. All rights reserved.
No portion of this material may be reproduced in any form without the advance written permission of the author. |
In-Home Care Support Helps MA Plans Significantly Lower Costs, Study Suggests
Home Health Care News | By Andrew Donlan
A new study of Medicare Advantage (MA) beneficiaries found that in-home companion care reduced care costs by close to 10%.
The study – conducted by a national actuarial firm and commissioned by the companion care company Papa – also found that in-home companion care boosted home health utilization among MA members, while reducing more costly care.
Specifically, Papa was able to reduce health care costs by 9% among MA beneficiaries on behalf of health plans.
“As Medicare Advantage organizations face rising health care costs, slimmer margins and mounting regulatory pressures, they need to to show value for every dollar spent,” Kelsey McNamara, head of research and impact at Papa, told Home Health Care News in an email. “And with CMS’ ramp up of supplemental benefit scrutiny and data collection, there’s heightened interest in solutions that reduce costs, improve utilization and help members seek and remain in lower-acuity care settings for longer. Today’s results affirm Papa’s ability to do just this.”
Founded in 2017 and backed by a slew of investors, Papa is a social support and companion care company. It sends Papa Pals into seniors’ homes to mitigate loneliness and help with activities of daily living. It has contracts with a wide variety of MA plans across the country.
The study was based on 2,386 MA members from a regional health plan that were enrolled in Papa between Jan. 2021 and Aug. 2023. The members used Papa for at least one visit.
Members also experienced a 18% reduction in inpatient hospital admissions and a 22% reduction in skilled nursing facility usage.
Furthermore, for members that used Papa’s services more than two times per month, there was a 19% reduction in medical costs. For those that had three or more visits per month, there was a 30% reduction in medical costs.
“These reductions are in addition to revenue plans experience from improved member experience and reduced member churn,” McNamara said. “One study of a Florida-based health plan, conducted by health economics research firm DataMed Solutions, found Papa participants had a churn rate that was 15.8% lower than members who did not participate in Papa.”
The results suggest that, even while health plans are cutting benefits, they should pause before cutting home-based care supports that help keep members healthy…
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Data Paramount in Hospice-Payer, Referral Partner Negotiations
Hospice News | By Jim Parker
As hospice and palliative care providers move further into value-based care, data is becoming paramount to building payer and referral partner relationships.
In this climate, hospices that can demonstrate their value — and their ability to financially and operationally weather changes in an evolving reimbursement landscape — will have a leg up on competitors. Key data points include performance on the Hospice Item Set, the Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys and other quality measures.
Providers will also need to show their potential for reducing costs, primarily through reductions in hospitalizations, emergency department visits and readmissions.
“We all know the great quality of care that really great hospices provide to the patients they serve, but also to the families and communities they work with,” Wes Little, chief analytics officer and general manager for WellSky, told Hospice News. “What’s been missing for a lot of those organizations over the years is hard, cold stats that actually backup the high quality of care that they provide in the metrics that matter most to both the patients and referral sources.”
Other crucial metrics include live discharge rates and hospice visits in the last days of life, according to Little.
WellSky recently introduced a value-based insights for hospice solution that pulls real-time data from claims and electronic health records to give providers visibility into their performance, analyze patterns in their referral activities and benchmark against others in their markets.
Looking ahead to 2025, some of the key metrics that hospices, payers and referral partners need to watch are changing. The U.S Centers for Medicare & Medicaid Services (CMS) plans to implement its new Hospice Outcomes and Patient Evaluation Tool (HOPE) tool, which will replace the Hospice Item Set.
When HOPE is implemented, CMS plans to develop additional measures based on the information they will be able to collect through the tool. The agency to date has named two of those potential measures: Timely Reassessment of Pain Impact and Timely Reassessment of Non-Pain Symptom Impact.
“HOPE is going to increase the amount of data that’s captured at the beginning of care, but then also create these touch points along a patient’s experience. If you’re able to have this much more in-depth comprehensive assessment, that’s going to allow you to have a much fuller picture of what the patient is experiencing and where they might be headed,” Little said. “It’s really a sign that Medicare and hospice overall wants to be moving towards a more data-driven measurement of the quality of care that’s provided to individual patients, and therefore at the overall agency level.”
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Annual Report on Medicare Financing Could Reduce the Immediate Impetus to Address Longstanding Issues
Healthcare Financial Management Association | By Nick Hut
Even though the latest actuarial analysis arguably diminishes the short-term urgency surrounding the program, stakeholders see ample reason to act quickly.
New data on the state of Medicare funding show short-term improvement while keeping the stakes high for ensuing decades.
The annual report from Medicare’s trustees shows the Hospital Insurance Trust Fund (i.e., Medicare Part A) has enough money to keep beneficiaries covered and providers paid through 2036. That’s an increase of five years from the 2023 report and eight years from the 2022 projection.
In the unlikely event policymakers ever allow insolvency to happen, providers would incur an immediate 11% reduction in Medicare payments. From there, “Medicare could pay health plans and providers of Part A services only to the extent allowed by ongoing tax revenues — and these revenues would be inadequate to fully cover costs,” the trustees’ report states. “Beneficiary access to healthcare services could rapidly be curtailed.”
The improved short-term outlook is based on higher income stemming from increases in the number of covered workers and in average wages. In addition, expenditures are lower than previously projected, in part because of a change instituted by CMS to constrain Medicare Advantage (MA) payments by excluding MA-associated medical education expenses from benchmark calculations.
Updated number-crunching also has resulted in lower projections for spending on inpatient care and home health services as the trustees phase out some of the mathematical adjustments that were applied during the COVID-19 pandemic.
Nonetheless, Medicare fee-for-service (FFS) inpatient payments are anticipated to rise by 2.3% this year, 2% in 2025, and then by 5.4%-5.5% per year through 2029. The jump during the latter part of that window partially would be linked to a projected deceleration in the shift from FFS to MA.
A Drag on the Economy
Medicare costs are projected to comprise 3.9% of GDP in 2025, up from 2.19% in 2000, although the 2025 number is down from a projected 4.13% in last year’s report. Within a decade, the figure is expected to reach 5.3%.
“I wouldn’t put that much stock in the trust fund number per se,” Michael Chernew, PhD, professor of healthcare policy at Harvard Medical School, said during a May 7 webinar hosted by the Committee for a Responsible Federal Budget (CRFB). “I think the bigger issue with Medicare is just the overall burden that the program is placing on the economy.”
That strain is expected to grow over the long term, reaching 6.2% at the end of the 75-year window examined in the latest report...
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