Home-Based Care Providers Are Learning When to Walk Away From Medicare Advantage Contracts

Home Health Care News | By Joyce Famakinwa

“You’ve got to know when to hold ’em, know when to fold ’em, know when to walk away.”

Yes, these are lyrics to the enduring Kenny Rogers hit song, but they are also reflective of an idea more and more home-based care providers are applying to their negotiations and relationships with Medicare Advantage (MA) plans.

Jet Health has first hand experience with walking away from a relationship with a big MA plan.

“As a regional provider of home health services, we had to look at those margins and how we best deploy our nurses and our therapists,” Jet Health CEO Stacie Bratcher said Monday during a panel discussion at the Home Care 100 conference in Orlando, Florida. “We were under water with one of our large providers. We had to decide, do we stay in-network with some really poor rates that were under what our per-visit rate was, or do we exit?”

The Fort Worth, Texas-based Jet Health is a home health, hospice and personal care provider that operates in Texas, New Mexico, Colorado and Idaho.

Jet Health leaders asked the MA plan for a rate increase multiple times and were denied multiple times. This prompted the company to exit the relationship, according to Bratcher.

“In that negotiation process, they did come back to us and say, ‘Well, we really value you as a provider, so we’ll give you …’ basically enough to keep us on the hook,” she said. “It was an extremely difficult decision for us because it was a market that we had been in for a very long time — referral sources that depended on us, patients that depended on us.”

It came down to becoming a smaller – but more profitable – business versus continuing to take on these patients on a large scale while losing money.

Now, for Jet Health, it’s been important to keep cost stability top of mind when forming payer relationships.

“Really looking at how comfortable we are with our cost stability — is that going to change in the future, because when you take on these risk contracts, you’re not going to see that upside for a year or more,” Bratcher said. “We don’t even recognize that revenue as revenue, and we defer that until a later point in time.”

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