Reducing The Medicare Advantage Delta In Home-based Care With Ai, New Operating Models

The home-based care industry is plagued by regulatory, administrative and staffing challenges, among others. However, the most acute challenge facing providers, according to Luke Rutledge, president of Homecare Homebase, is the rapid rise of Medicare Advantage (MA).

MA has become the primary payer source for home-based care services, according to Homecare Homebase data. To persist in the face of this surge, providers must embrace new tools, including ambient listening and data automation, and reimagine traditional operating models.

“The reason why that’s so significant is there’s a 38% delta between what Medicare pays, even with all the cuts, and what Medicare Advantage is paying,” Rutledge told Home Health Care News. “That’s one of the things that is keeping people up at night – as that continues to climb on the Medicare Advantage side, people are trying to figure out how to close that 38% delta.”

Dallas-based Homecare Homebase is one of the largest technology and administrative services companies serving home-based care.

Technology will be key to disrupting the status quo and closing that delta, Rutledge said. For example, ambient listening can reduce clinician documentation time on an admission visit from two to three hours down to 30 to 45 minutes. Time savings should come from a lighter documentation burden, rather than less time spent with the patient, he said.

Other tools that automate data processes can also reduce documentation burden.

Medication reconciliation can require 30 to 45 minutes of a clinician’s time, but a new Homecare Homebase functionality that auto-populates a patient’s medications can reduce that figure to 10 or 15 minutes, Rutledge said.

“That’s a huge win for the clinician, for the industry, the patient,” Rutledge said. “It’s small things like that. We need to chase transcribing and [ambient] listening, but don’t overlook the real simple things that are already out there that can provide immediate value.”

This medication reconciliation function still requires the clinician to review the technology’s recommendation – an element critical to AI utilization in health care, Rutledge said.

Home-based care providers have increasingly turned to AI to simplify operations, unburden clinicians, reduce costs and drive value-based care arrangements. While emphasizing AI’s potential in home-based care, some providers caution that AI-enabled tools also pose certain risks.

“If we turn on AI ambient listening and so forth and say, ‘Okay, this is great, [we] cut your time in half. Now you have got to see twice as many patients,’ that’s not a win either,” Mike Johnson, chief researcher of home care innovation at Bayada Home Health Care, previously told HHCN. “You still need that time to check the note and the discipline to make sure we don’t trust it until we trust it.”

For Rutledge, AI-related concerns can be mitigated by ensuring that AI tools are ethical and non-biased, and that a human is included in the process. Clinicians are crucial in catching hallucinations and protecting patients, he said.

Incorporating new technology like AI requires investments, but home-based care providers face challenges that have resulted in widespread cost pressures. From a fiercely competitive staffing landscape to a mounting administrative burden, providers are coping with slim margins – which have the potential to limit innovation budgets.

Providers can evolve their legacy operating models to overcome these challenges, Rutledge said.

Traditionally, providers have branches across geographic areas staffed with very specific positions, including an intake coordinator, scheduler and a pre-billing worker. To reduce the cost of goods sold, providers can likely centralize functions and create regional or centralized branches with fewer employees, he suggested.

Home-based care providers can also generate new revenue streams.

“There are gaps in care that the payer really cares about,” Rutledge said. “So if you’re already in the home, you can already identify those gaps in care and attend to them, and payers will pay new revenue streams. … Yes, there’s a priority to reduce some of the costs, because it’s got an old operating model, but can you inject new revenue streams that the payer cares about?”

Ultimately, determining prayer needs should be a top priority for the industry, according to Rutledge.

“There’s a huge opportunity there to solve both what the payer is trying to solve and what the home care industry is trying to solve,” Rutledge said. “No one talks about it, but no one knows truly what the payer wants and how they go together in the market. … I think there’s an opportunity to really sit down and think about what the payer wants and how to achieve it.”

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