With a push to find increasing value in care delivery on the part of payers, providers in assisted living and home health are seeking to carve out a niche in what can best be described as “hospital or acute care” alternative locations. The most forward trend is occurring in home health, known as hospital-at-home care.
The acute care at home model started during the COVID pandemic via a CMS waiver known as Acute Hospital Care at Home. The waiver provided regulatory guidance and reimbursement for higher acuity care delivery at home. At the end of 2022, the $1.66 trillion spending bill made sure that the financial assistance that helped get hospital-at-home programs off the ground would not die once the COVID emergency ended.
The Boston based company, Medically Home, is the leader in driving normally acute hospital-based services into the home. In January, the company announced the launch of its ED in Home program. The program is essentially a network of clinicians that triage patients with certain symptoms not requiring urgent transport such as a cough, shortness of breath, a fall, etc. in their home. According to the company: “ED in Home is for patients who have undifferentiated complaints that require emergency department evaluation. This can mean patients with shortness of breath, a new cough or fever, or a patient who’s had a fall and needs evaluation. If they’ve broken a hip, [ED in Home] brings the best diagnostics and therapeutics to patients’ homes so that patients can avoid the stress and expense and chaos of the emergency room”.
Per Medically Home, the ED in Home program reduces hospitalizations and provides a safer service to patients in the comfort of their home. The primary programmatic recipients tend to be elderly and those with chronic diseases. According to the company: “The ED in Home program has served almost 5,000 patients and 81% stayed at home without requiring transfer to the hospital for further evaluation. Hospital admissions dropped by 45% to less than 25% of patients needing hospitalizations”. As of now, Medically Home only offers the ED in Home service in Massachusetts.
Amedysis has been another early adopter of advanced, higher-level care (hospital level service) delivered into the home. Through a subsidiary company known as Contessa, Amedysis provides hospital-at-home care and skilled nursing at-home care programs. Both programs accounted for a growth in revenue to $4 million from $2.7 million last year. As payers gain comfort with higher acuity services at home and develop proper care coordination programs and quality assurance tools, growth in acute and skilled nursing programs will continue, though both remain niche markets for now and the foreseeable future.
Assisted Living acuity growth has been both intentional and unintentional. With a surplus supply of units nationwide and a traditional market that is rather narrow (not quite independent, not quite skilled but needing ADL support or memory/cognitive care), facilities have continued to try to maintain declining residents in-place to stabilize occupancy. With this approach, acuity has naturally increased as resident needs go from requiring support such as set-up and cuing to actual delivery of care.
For some providers, higher acuity assisted care was a specific product, designed to deliver a comparable level of care to skilled nursing but in a more home like or residential setting. While good in concept, the care often came at a very steep price and without the option of a patient using his/her Medicare benefits as the Assisted setting did not qualify for Medicare participating provider status. Getting somewhat around this benefit issue, AL providers partnered with home health agencies to deliver higher-level skilled services such as skilled nursing (wound care, IV therapy, etc.) and skilled therapy services for rehabilitation. With proper qualification, the Part A home health benefit covers the additional, higher acuity services. Value-based care models via Medicare Advantage plans are also dabbling in paying for, high acuity care in Assisted Living.
Assisted Living is the fastest growing segment in long-term care, though Home Health remains the fastest growing Medicare post-acute segment. Currently, 810,000 people reside in an assisted living facility across the U.S. Some care is covered via Medicaid waiver programs, allowing a resident eligible for Medicaid (and often, dually eligible for Medicare) to reside in an assisted living facility and have the service fees paid for by Medicare. Unfortunately, as is typically true for all care reimbursed by Medicaid, the payment level for assisted living is generally quite low and often, below the cost of care.
The care not paid for by Medicaid can be quite expensive. If service levels extend to the skilled nursing equivalent, it is not uncommon to see monthly bills for residency and care exceed $10,000 per month. While acuity creep is common, so is price creep as additional services become necessity. The begging question about acuity creep and cost is how long a resident can self-pay at rates of $10,000 per month or more. Assisted Living, aside from Medicaid and some private long-term care insurance plans, is typically paid for via private funds.
In Assisted Living Facilities, 50% of the residents have three or more chronic conditions, and 42% have Alzheimer’s or other dementia-like diagnoses. The average length of stay in assisted living communities is 22 months. When residents’ care needs become more intense, most will move to a higher level of care, nursing home or skilled nursing level of care. Often, the residents and family members may not be willing to move to another level of care because of the increase in cost, uncertainty about the transition of care, and because they do not fully understand the risk exposures brought on by a resident’s deteriorating health and/or cognitive status. Denial of the escalating care needs for loved ones is common as family members tend to be somewhat removed from the daily caregiving tasks, missing or unwilling to see the decline.
The acuity creep is without question, a contributing factor to increasing litigation. As resident care needs increase, among a staffing supply shortage, staff availability and competency to deliver higher acuity services may lack. Unmet care needs that lead to increasing falls, skin breakdown, additional hospitalizations, weight loss, etc., are the common triggers for litigation.
In a future post, I’ll concentrate specifically on increased litigation risk in Assisted Living, the factors and opportunities for reducing risk/effectively managing risks.