Big deal, big questions

As we were putting the finishing touches on this June issue, news broke that Humana has contracted with AdaptHealth and Rotech Healthcare, two national HME providers, to provide HME products and services to its Medicare Advantage HMO members. 

This is a big deal for a whole lotta reasons. 

We’ve all read the headlines. Insurers are increasingly targeting Medicare Advantage plans as a source of growth. Last year, Humana outlined plans to expand its Medicare HMO offerings, specifically, into 260 new counties, part of an opportunity, along with Medicare LPPO plans, to serve an additional 4.6 million Medicare-eligible individuals across the country. In all, Humana serves 8.7 million Medicare members, with nearly 5.1 million enrolled in a Medicare Advantage plan. 

One reason why insurers are targeting Medicare Advantage, of course, is that these plans now cover more than half of all eligible Medicare beneficiaries. In January 2023, 30.19 million of the 59.82 million people with both Medicare Part A and Part B were enrolled in a plan, according to a recent report from Kaiser Family Foundation. By comparison, in 2007, less than one in five (19%) eligible Medicare beneficiaries were enrolled in a plan. 

Insurers are also drawn to Medicare Advantage plans because, ostensibly, they lower costs and improve care. Humana cites data from the Better Medicare Alliance that shows Medicare Advantage members report spending nearly $2,000 less on out-of-pocket costs compared to Medicare fee-for-service. That data also shows these members have more than a 30% lower level of emergency room visits and 40% lower level of inpatient hospital care. 

So, you can downplay Humana’s contract with AdaptHealth and Rotech, saying it’s only for a certain subset of members – Medicare Advantage HMO – but the fact of the matter is, it’s likely to be a quickly growing subset. 

If you put aside your feeling of being starstruck by news that involves Humana + Medicare Advantage + specifically HME (doesn’t happen every day), you start thinking about how this contract raises a lot of questions for independent HME providers. 

“How does this help rural Alabama DME suppliers? Are we out? Or is there a way to work with us?” asked Robert Beard on Twitter. 

“No way the rates for subcontracting will even cover our costs,” wrote Jason Jones. 

“I once was a subcontractor for an Apria national contract. Trust me, they don’t want to have the member complaints and will sub out for a loss to do so,” wrote Woody O’Neal. 

“Do you think AAHomecare and VGM will fight for the independent provider in this situation?” Beard asked. 

These are all good questions – ones that we’re asking ourselves and, in upcoming interviews, asking others.