Medicare Advantage Brings More Administration and Lower Pay for Home Health Providers

Home-based care providers and their advocates have long complained that Medicare Advantage plans pay less than traditional fee-for-service Medicare. They also say MA creates a heavier administrative load.

That mix is increasingly squeezing home health agencies as MA makes up a larger share of their patient base, panelists said at the National Alliance for Care at Home’s Annual Meeting & Expo.

Homecare Homebase data show that average revenue per visit is $266 under traditional Medicare, compared with $206 under MA. At the same time, the weekly office workflow tied to MA patients is about 13% higher than for traditional Medicare patients, said Hannah Pearson, chief revenue officer at Homecare Homebase.

Weekly visits per patient and rehospitalization rates are roughly similar across both groups, Pearson said.

“So doing the same clinical work, a quarter less revenue with more paperwork, [and the] hospitalization risk is effectively the same,” Pearson said on the panel.

MA now represents 49.5% of patients in Homecare Homebase’s dataset, up 31% since 2016. Pearson said that growth reflects a structural shift that forces providers to rethink how they operate.

“Most organizations built their staffing, their workflows, and their contracts when traditional Medicare was two thirds of their business,” she said.

Homecare Homebase provides technology and administrative services to the home-based care sector.

Nick Seabrook, executive vice president of SimiTree, said traditional Medicare margins have stayed relatively stable since the Patient-Driven Groupings Model, while the cost-report category that includes MA has remained in the red.

That category also covers other payers, so it does not show MA results alone.

“Medicare is really our only payer source in home health that’s making any kind of a positive margin,” Seabrook said on the panel.

He said overall margins were about 7% when PDGM began, based on CMS data through 2024. Over the past three years, he added, margins have been near 3%.

SimiTree provides consulting, technology and billing services to home healthcare, hospice and behavioral health providers.

Seabrook also said rising visit costs are adding pressure. Total RN visit costs have climbed to nearly $230, or about $60 more than at the start of PDGM.

Even so, he said providers may still have room to negotiate episodic MA contracts that look more like Medicare reimbursement instead of per-visit payment models. He added that plans appear more open to those arrangements.

“I would encourage you to reach out to your Medicare Advantage plans now to start that negotiation process to see if they would be receptive to a Medicare-like reimbursement rather than that per-visit model,” Seabrook said.

As negotiations continue, providers should be prepared to show payers their clinical outcomes.