The home health and care provider Amedisys Inc. (Nasdaq: AMED) is experimenting with a new model that better fits today’s Medicare Advantage environment.
Based in Button Rouge, Louisiana, Amedisys has begun piloting a new model that takes into account the number of admission-based cases, which we hope will reduce business per episode to accept more Medicare Advantage (MA) patients into its home health segment. .
Amedisys CEO Chris Gerard detailed how some of the company’s home healthcare models differ in terms of cost recovery and risk-taking compared to a typical profit-sharing agreement at UBS Global Healthcare’s conference this week.
“If you think about the models today with Medicare Advantage, it’s either visit-based or episodic,” Gerard said. “Most plans are trying to move to a visiting base and then basically control usage. This is how they control their expenses. This model is not really sustainable. This will not encourage our desire to take more from this business. So what we’re looking at is a new admission-based model. “
Gerard said the new model would allow Amedisys to manage its own use, and by reducing the length of patient stays, the company would reduce business costs per episode. It will also help the workforce capacity, he noted.
“This will unlock our capacity to care for more patients, and then we will actually reallocate that capacity to accept more patients with Medicare Advantage,” he said.
Amedisys provides home health, hospice and personal care services in 38 states and Washington, DC, with 21,000 employees. In total, there are 548 care centers and care for 445,000 patients per year. It also provides home-level care through Contessa, which it acquired for $ 250 million last year.
Ideally, Gerard said, the service charge model is the most attractive margin profile for Amedisys.
The plans of the MA and home health care providers have a fragile connection. Unless, of course, one bought the other.
At the same time, Amedysis and other providers cannot ignore MA’s plans, which play a greater role in home care.
Merger and acquisition plans
It has been several years since Amedisys entered into a deal on the scale of AseraCare or Compassionate Care Hospice (CCH).
Scott Jean, vice president and chief financial officer of Amedisys, said the reason was a combination of navigating a difficult environment for mergers and acquisitions and the fact that it is more difficult to get deals of this size.
“We spent almost $ 700 million on hospice acquisitions,” Gene said. “We wanted to take a break [and] make sure we integrate it. We made AseraCare in the middle of COVID and now we want to see these ADCs start coming back. This does not mean that we will not visit the hospice, but we are probably a year and a half behind where we thought we would be, mainly because of the problems with COVID and around what happened with the ADC. We’re still looking for a good home health deal – you have to go through the diligence parts. “
Like all providers, Amedysis is trying to adapt to the new job market and believes it has found a solid solution when it comes to medical help.
“We have been very clear over the last few years that having clinical capacity will be the biggest barrier to our success,” Gerard said. “It starts with our retention, our hiring and hiring, and our ability to build our own kind of workforce. But at the end of the day, you still need to have some access to staff on request.
This reasoning came into Amedisys’ $ 5 million investment in connectRN.
Historically, Amedisys has used contract staff, with a clinician signing a 12-week work commitment. However, the Omicron option proved to be another obstacle and increased the price for these clinicians.
connectRN has helped Amedisys receive clinical help on demand and does not lock the company into long-term commitments that may be interrupted by COVID or other factors.
“It’s more of a variable cost model for us,” Gerard said. “This allows us to bend when we have some challenges in our markets. “I think this will help us build additional clinical capacity that we did not see access to before we made this investment.”