Home Health Agencies Eye Business Opportunity with Hospital Partnerships

April 10, 2013

By Jason Oliva

In an increasingly competitive home health marketplace, agencies report they are seeing a viable business opportunity in partnering with hospitals in light of readmission penalties.

Since October 2012, hospitals have been subject to reimbursement cuts by as little as 1% per beneficiary after Medicare found readmissions—often avoidable—cost the program an estimated $26 billion annually.

The relationships can differ between providers, says Mary St. Pierre, vice president of regulatory affairs for the National Association for Home Care & Hospice (NAHC).

“It really depends on what degree home health agencies want to become involved and what commitment of hospitals are looking to these agencies for referrals,” says St. Pierre.

These home health agencies present how hospitals can reduce their readmission rates, either by discussing services or developing new initiatives for more intensive home health services.

These “intensive” initiatives include beginning services for patients within 24 hours post-discharge from the hospital, rather than the regulation 48 hours mandated by Medicare.

An advantage of promptly initiating services, says St. Pierre, occurs when hospitals send patients home with a medication list, which home health agencies can view to see which potential interactions can make patients prone to readmission before administering care.

While some agencies might resort to telephone interventions or even telehealth technologies to check up on their clients, St. Pierre has noticed others becoming more involved with intravenous infusion treatments.

“With more intensive occupational therapy immediately after discharge, patients are allowed an upfront continuation of this treatment when they leave the hospital,” she says.

Several home health agencies have reported they have begun to see results from their newfound partners in care.

In one case, says St. Pierre, a pair of home health agencies entered into a formal agreement with a hospital and an emergency department. The result of this partnership led to the development of a computer database that maintained a log of patients between the two agencies.

“Under this circumstance, the ER department can call the agencies and say ‘hey, do you know these patients?’” says St. Pierre.

Access to a log of patients’ health information can provide both hospitals and home health agencies with knowledge on how to treat certain individuals when they leave the hospital, or in the event they wind up readmitted.

Executive Care—a home health services company headquartered in Hackensack, New Jersey—began its first relationship with a local hospital in 2007-2008, according to founder and CEO Lenny Verkhoglaz, who says he has seen more referrals coming from its partner hospital as a result of the collaboration.

“Hospitals are looking to partner up with agencies to refer patients to once they are done providing care,” says Verkhoglaz. “Our job through this partnership is to make sure patients get the care they need to stay healthy.”

When it comes to reducing readmission rates for its care partner, Executive Care does its part by providing care within a patient’s home, including helping individuals with activities of daily living by providing personal care and safety precautions such as home assessments and nutrition evaluations to make sure patients are eating right post-discharge.

Since low barriers to entry have generated increasing competition for home health providers in the national marketplace, according to Verkhoglaz, partnerships do not just present themselves to a specific agency.

Rather, these agreements have to be sought out, often times boiling down to how well an agency is performing in the marketplace and the services provided, he says.

However, the Affordable Care Act has made the healthcare landscape “confusing” for some, says Verkhoglaz, as providers adjust to recent provisions, notably the establishment of Accountable Care Organizations.

“Most agencies are paying attention to what’s going on in the industry and the political world,” says Verkhoglaz. “People who understand what’s going on will want to be involved.”