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Ramp up to new Humana contract raises questions

Ramp up to new Humana contract raises questions 'I do think the threat is if (these) deals become more prevalent'

Woody O'NealYARMOUTH, Maine – HME providers say getting locked out of Medicare Advantage contracts could be one of the biggest threats they face. 

Humana in mid-May announced it had awarded capitated care contracts to AdaptHealth and Rotech Healthcare to provide certain home medical equipment services to its Medicare Advantage HMO members.  

“A lot of (big payers) won’t let us into the network – I think a lot of companies are experiencing that,” said Brian Wilson, COO of Commonwealth Home Health Care in Danville, Va. “I’m sure AdaptHealth does a good job, but I get doctors that come back to us and say, ‘We want to use you.’” 

The contracts, which start July 1, were awarded by state, with AdaptHealth covering 33 states and the District of Columbia, and Rotech covering eight states. There are nine “open states," largely in the West. The contracts cover respiratory supplies, mobility aids, wheelchairs and standard power mobility, beds and support surfaces and supplies, but not orthotics and prosthetics, mastectomy supplies and custom power wheelchairs. 

Rotech was awarded the contract in Michigan and while Robyn Parrott doesn’t have a ton of Humana patients, she is concerned about the patients it will impact.  

“In the Detroit area, Rotech is (known as) a bent metal provider, not CPAP and ventilators,” says Parrott, president of Troy, Mich.-based Sleep Solutions. “Now, we’ve got to transfer our patients to them. Humana said we can write a rebuttal letter, but we are telling the patients to call 1-800-Medicare to voice their concerns.” 

Bruce Roussell Jr. did register an objection with Humana when he received his notification letter from the payer, citing his worries of longer discharges. 

“This is a huge blow to us,” said Roussell Jr., president of DME Direct in New Orleans, a small mom-and-pop with four employees. “I’ve reached out to my state senator, to my former congressman, and I just reached out to the Humana network relations consultant and I’m waiting to see if she’ll call back.”  

Providers are also concerned with the transition taking place in such a short timeframe and on such a large scale. Tyler Riddle says AdaptHealth has reached out offering to buy the equipment that his Humana patients are currently using. 

“It’s very early in the negotiations of that and we’re not sure – it's got to make financial sense for me to do that,” said Riddle, president of MRS Homecare in Tifton, Ga. “I’m very interested in whether this is a tactic they are taking nationwide.” 

With such explosive growth in Medicare Advantage – a recent report from Kaiser Family Foundation found that 30.19 million of the 59.82 million people with both Medicare Part A and Part B were enrolled in a Medicare Advantage plan in 2023, compared to less than one in five in 2007 – providers expect more exclusive contracts. But that doesn’t need to spell the end of smaller providers, says Woody O’Neal. 

“My company is very active in courting and negotiating deals with MA plans and always have been,” said O’Neal, vice president of Pelham, Ala.-based O2 Neal Medical. “I do think the threat is if deals like the current AdaptHealth deal become more prevalent. But in the early ‘90s, we saw the same thing with managed care. Everybody was so scared of managed care, and it never transformed the industry like people thought it would.” 


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