Elara Caring Targets Physicians as Home Health Providers Rethink Referrals

In the build-up to 2020 and the Patient-Driven Groupings Model (PDGM), many home health providers began shifting their referral strategies to focus more on hospitals, skilled nursing facilities (SNFs) and other institutional sources.

Generally, providers realized that patients coming from such settings likely meant more Medicare dollars under PDGM, especially when patients were also classified as “early” in terms of timing. While that’s still true, the COVID-19 emergency has seriously disrupted home health admissions patterns, forcing many providers to rethink community-based referrals.

Now, some operators — including Elara Caring — see non-institutional referrals and relationships with community-based physicians as a core part of their future plans.

The decision to double down on referrals from physicians in the community originally stemmed from access challenges during the early days of the public health emergency, Elara Caring CEO Scott Powers told Home Health Care News.

About 80% of Elara Caring’s patients historically have come from institutional settings. But with hospitals suspending elective surgeries and some SNFs restricting visits from outside staff, the Addison, Texas-based company knew it had to make a change.

“It’s been a wild year, obviously,” said Powers, who came to Elara Caring after leading the rapidly growing Medicare Advantage organization Alignment Healthcare. “We’ve done a pretty good job trying to recruit more physicians for referral sources, just given some of their access challenges. We’ve been actively thinking about physicians and how we partner with them beyond just the usual skilled nursing and hospital systems.”

Formed in 2018 after Great Lakes Caring, National Home Health Care and Jordan Health Services merged, Elara Caring currently has more than 225 offices across 16 states. Its more than 35,000 employees care for about 60,000 patients daily.

Since the public health emergency started, Elara Caring has increased its referrals coming from community sources by about 10%.

That means roughly one-third of its referral base now comes from the community.

“If I have it my way — and we continue to do things the way we’re doing them — that will be 50% or more a year from now,” Powers said.

Unexpected upside

The early part of this year played out as expected when it comes to referral patterns, data from Strategic Healthcare Programs (SHP) shared during last month’s Financial Management Conference shows. The virtual conference was hosted by the National Association for Home Care & Hospice (NAHC).

In January, 47.8% of home health referrals came from institutional sources. Similarly, over 32% of home health referrals came from institutional sources in February.

But then those figures took a nosedive.

In March, 30.8% of home health referrals came from institutional sources, according to SHP data. That then fell to just 23.2% in April, when the U.S. health care system felt the full impact of the coronavirus.

“In the early days of PDGM, and in January and February, what we saw was basically what we expected,” Nick Seabrook, principal and founder of BlackTree Healthcare Consulting, said while discussing the SHP figures during a presentation at the Financial Management Conference. “We expected to see a lot of those early-institutional patients.”

For the most part, the decline in institutional numbers was unplanned — and it will likely prove short lived.

In fact, referral patterns are already starting to stabilize, with most providers seeing their home health census recovering to pre-coronavirus levels as well.

“We saw dips early on in COVID,” Powers said. “At least from a skilled home health perspective, our census has rebounded above pre-COVID levels. It’s been there for the last three or four weeks.”

But there’s unexpected upside to community referrals, too, even for those that fall under the “late” timing category.

While “early-institutional” cases have higher reimbursement rates associated with them, it typically requires more time and resources to care for those patients.

Meanwhile, “late-community” cases often have a lower resource use, meaning margins are actually higher.

“When you look at early-institutional periods, they’re going to give you the highest cash flow, but we also have the highest resource use for those,” Dave Saling, consulting manager at BlackTree, said at the Financial Management Conference. “What we’re seeing with late and community is a significant decrease in resource use and actually higher margins with some of those [cases].”

That means late-community cases may be more beneficial to agencies’ bottom lines in the long term, Saling noted.

Telehealth leverage

On its end, Elara Caring is working to beef up its community-based referral strategy by becoming a “partner of choice” for physicians.

That means making physicians’ lives as easy as possible by providing high-quality care across the entire post-acute continuum.

In addition to its home health business, Elara Caring also maintains large hospice and personal care services (PCS) lines. It additionally has a growing behavioral health business.

“In the year ahead, we not only expect to grow by adding more physicians, but we expect to grow by being the easiest to do business with in the markets in which we operate,” Powers said. “We’re going to bring all our assets to bear. So if we have a skilled home health relationship in one place, we’re going to bring our PCS business into that and be more forceful, more thoughtful about that.”

During the public health emergency, Elara Caring has also made major inroads with physicians by leveraging its telehealth capabilities, which are powered by Health Recovery Solutions (HRS).

“We’re using our telehealth platform as a partnership tool with physicians, primarily those who don’t have telehealth platforms themselves,” Powers said. “There are still many specialists, primary care doctors and geriatricians out there who need access to their patients, but haven’t been able to see them.”

Apart from its referral strategy, Elara Caring has its sights set on continued growth.

Its behavioral health business, in particular, is “growing like a weed,” according to Powers.

“In the back end of the year, as our strategies come together and our integrations come together, you’re going to see us on an even faster growth trajectory,” he said. “Now that we’ve got things plugged together … and the right team in place, I think you’re going to see a really strong year for us.”

Elara Caring’s most recent leadership hires include Chief Medical Officer Dr. Joe Jasser and CFO Bruce Jarvie.

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Early Data Shows PDGM’s Regional Winners, Losers 

The impact of the Patient-Driven Groupings Model (PDGM) doesn’t appear to be universal.

In fact, each home health care agency’s performance under the model seems to depend on a few somewhat uncontrollable factors, new PDGM data suggests.

“CMS created a model that was based on all claims nationally, but depending on where you are and the types of patients you’re seeing, I’m expecting we’re going to see some real winners and losers,” Chris Attaya, vice president of product strategy at Strategic Healthcare Programs (SHP), said.

Attaya shared those insights during a recent webinar hosted by BlackTree Healthcare Consulting, during which he and BlackTree Managing Principal Nick Seabrook shared PDGM performance data from the first few months of the year.

So far, PDGM’s winners and losers appear to be regional.

For example, the data shows that for the first five months of the year, the Southwest had the lowest average case-mix weight for non-Low Utilization Payment Adjustment (LUPA) episodes of any region in the country, at 0.997. Meanwhile, the Northeast saw the highest average case-mix weight of 1.179.

Under PDGM, case-mix weights help determine how much agencies get paid by the Centers for Medicare & Medicaid Services (CMS). Specifically, they’re used to adjust providers’ base payment amounts for each 30-day unit of home health care. 

There are 432 possible case-mix adjusted payment groups under PDGM. A higher case-mix weight generally generates a higher payment adjustment, while a lower case-mix weight usually means a lower reimbursement rate.

Case-mix weights for each unit of care are determined by five different factors: admission source, timing, clinical grouping, functional impairment level and comorbidity adjustment.

Timing appears to be among the most important of those when it comes to case-mix weight, Attaya said on the webinar, pointing to data to back up his claims.

“It’s pretty correlated,” he said. “The early-late against your case-mix weight is the biggest reflection of how well you’re going to do in terms of the case-mix weight.”

In other words, regions that saw a lower percentage of early cases were also likely to see lower case-mix weights, the data suggests.

Case and point: The Southwest — which has the lowest average case-mix weight — saw the lowest percentage of early cases, at 27.6%; the Northeast — which had the highest average case-mix weight — saw the highest, at 51.5%.

Similarly, the home health industry has also seen regional winners and losers in terms of LUPA rates, Home Health Care News previously reported.

Like case-mix weights, LUPAs impact agencies’ reimbursement rates. If an agency doesn’t provide the appropriate number of visits determined for a patient in a period of care, they can be hit with a LUPA and, in turn, receive lower reimbursement. Under PDGM, there are 432 different LUPA scenarios, with visit thresholds ranging from two to six.

Since the coronavirus hit, home health agencies in states with a higher number of cases generally saw higher LUPA rates for the first few months of the year, according to the data presented during the webinar.

That includes states like New York and Washington, hit early and forcefully by the virus. Both saw LUPA rates well above the national average for the first few months of the year.

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PDGM Data Shows Reality-Versus-Expectations Mismatch for Case-Mix Components

The Centers for Medicare & Medicaid Services (CMS) was a little bit off with some of its predictions related to the Patient-Driven Groupings Model (PDGM). 

At least, that’s true when it comes to the first four months of 2020, according to Strategic Healthcare Programs (SHP) data unveiled on a recent BlackTree Healthcare Consulting webinar.

The webinar covered data and trends related to the impact of PDGM and COVID-19 on home health agencies. As part of the presentation, experts compared SHP data to CMS projections on the various components of PDGM.

CMS detailed those projections in its 2020 final rule, using 2018 claims data paid through July 31, 2019, to inform its calculations. When put up against SHP data from January through April, it appears some of CMS’s predictions have yet to align with reality.

Take comorbidity adjustment, for example. It’s one of the five levers used to determine which of the 432 case-mix groups a case falls into under PDGM — and in turn, the reimbursement level that goes with it.

Under the new framework, there are three different comorbidity buckets: no adjustment, a “low” adjustment” or a “high” adjustment.

According to its models, CMS expected 56.4% of home health cases would have no adjustment; 35.5% would have a low adjustment; and only 8.1% would have a high adjustment.

In reality, 14.1% of cases had a high adjustment in the first four months of the year, according to SHP data. Those high adjustment cases are associated with a combination of secondary diagnoses that are tied to higher resource use when reported together — thus yield higher reimbursement.

“Some of that might be we’re doing a better job at secondary diagnosis coding, we’re paying more attention to that [or] we’re seeing more codes on the claim versus maybe what was just put on the OASIS,” Chris Attaya, vice president of product strategy at Strategic Healthcare Programs (SHP), said during the webinar.

Meanwhile, the expectations-versus-reality mismatch in functional impairment lever came as the biggest shock, according to BlackTree Managing Principal Nick Seabrook.

“The one area that surprised me the most is just the disparity in terms of the functional impairment scores,” Seabrook said during the webinar.

Like comorbidity adjustment, PDGM’s functional impairment lever is broken into three categories — low, medium and high — each of which comes with varying degrees of reimbursement. A higher impairment generally means higher reimbursement.

While CMS anticipated a fairly even split between all three functional categories, nearly 44% of cases have fallen into the high category. That’s over 12% more than what CMS expected, according to the data.

Source and timing trends are also slightly different from CMS’s expectations. Generally, the SHP data suggests that the industry is seeing far more “institutional early” cases and far fewer “community late” than CMS expected.

Specifically, CMS projected 61.4% of cases would be community late, while SHP found that only 54.4% were. Additionally, CMS estimated that 18.5% of cases would be institutional early, compared to 27.4% in reality.

Attaya wasn’t surprised by that mismatch, however.

“We’re seeing a higher [percentage] of early because … we’re still new with PDGM,” Attaya said. “Community late — we haven’t quite caught up yet, but I think we’ll see numbers continue to get closer to CMS [projections] as we go forward through the year when we have more opportunities for recerts that would continue to grow that ‘community late’ period.”

Other subcategories under the source and timing lever include “institutional late” and “community early,” which were on par with CMS’s expectations.

While the data provides a lens into the first four months of PDGM, it only tells part of the story. Home health providers were grappling with the COVID-19 emergency for the last several weeks of that four month period.

“As we kind of look at some of the trends, you’ve got to remember that [COVID-19] is included in there,” Attaya said. “That’s going to have some impact as you look at your overall numbers.”

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