The world of homecare is changing, and to keep up with its evolution, we must keep our ears to the ground and stay ahead of the latest trends. HHAeXchange works with over 10 thousand providers nationally with agencies from 50-100 census all the way up to 70 thousand census. We’ve learned that these trends affect everyone, and we believe that providing our agency clients with the data and information we see in the market will help everyone stay prepared and find success in the year ahead. 

Without further ado, here are the major trends in the homecare market this year. 

The Caregiver Shortage Will Continue  

A primary concern in the homecare industry is the ongoing caregiver shortage. A Kaiser Foundation study found that 43 states said they’ve been experiencing permanent provider closures due to the shortage. 

In a concerning trend observed in the summer of 2023, the number of caregivers in the Long-Term Services and Supports (LTSS) sector measurably lowered from the levels seen in early 2020. This decline is especially stark considering the over 20% growth in Medicaid LTSS from 2020 to 2023. Consequently, the industry faces a critical juncture with fewer caregivers now than three years ago. For instance, Arizona alone estimates a need for an additional 35,000 positions to adequately meet the burgeoning demand. 

Thankfully, industry stakeholders, states, and the federal government are all taking steps to address the shortage, such as: 

  • States increasing provider payment rates, with the stipulation that the increase flows through to the caregiver 
  • States increasing their minimum wage requirements, and some even creating a different wage requirement just for caregivers 
  • Vendors increasing the number of tools and technologies that are being developed around caregiver recruitment, retention, and training 

Above all, there is a pressing need to reframe how we view the role of caregivers. As critical members of the care team, elevating the caregiver profession is imperative. This involves a collective effort to recognize their contributions and ensure their work is respected and adequately rewarded. 

Going from EVV (Electronic Visit Verification) to VBC (Value-based Care) 

For the past few years, the industry has been focused on meeting the 21st Century Cures Act requirements. As of today, most states have successfully implemented their EVV systems and the remaining few are poised to complete this in 2024. 

The completion of EVV implementation opens new avenues for enhancing care delivery. EVV has provided access to the caregivers that are in the home in a way that never existed before, and stakeholders are starting to think about how we can better leverage that to capture more value-based data from the home. 

HHAeXchange has a tool called Care Insights that enables the caregiver to gather real-time data and make observations at the point of care. The tool allows them to notify providers of things like weight loss, fatigue, unusual behavior, or even fall hazards like loose carpets. Ultimately, it makes it easier for agencies and payers to identify the early warning signs for hospital readmissions. 

Transition Toward Person-Centered Care 

The federal government passed a rule back in 2014 called the HCBS Settings Rule. The goals of this rule are to: 

  • Ensure that people receiving Medicaid HCBS have full access to the benefits of community living and can receive services in the most integrated setting.  
  • Have control over their personal resources   
  • Are treated with privacy, dignity, respect, and freedom from coercion and restraint   
  • Allow people to make independent choices like what to eat, when to have visitors, and even when to lock doors. 

The rule was a push for the Medicaid LTSS industry to transition to a more person-centered model of care, which is when the patient’s care is guided and informed by their goals, preferences, and values, and success is measured by patient-reported outcomes. 

Home-based care is person-centered in many aspects; it allows people to stay in their home and community, which is the preference for most people, and at home, people have more autonomy and control over their daily choices. While the homecare industry has been successful in transitioning from facility-based care to home-based care, there is still work to be done to make in-home care more person-centered. For instance, many people may feel more isolated or lonely in the home setting. At a facility, people can go to a bingo room, to mass, or to group activities. If caregivers can facilitate these types of activities and increase the amount of social interaction for the care recipient, that could have huge benefits.   

Our team has started to see MCOs enter into agreements with providers around person-centered care models. We’re also starting to see an expansion of the type of services that individuals are receiving from the home. This is a trend that we think will pick up steam in 2024 and 2025 as it starts to make its way through the system and gets rolled out at the at the individual client level. 

Cracking Down on Compliance 

Now that the 21st Century Cures Act deadlines have passed, will regulatory bodies begin tracking this data to ensure compliance? From what we see, the answer is yes. The federal government and CMS are starting to ask states for more frequent reporting on EVV data, fraud, waste and abuse, and savings associated with the Cures Act. In some instances, there are monthly reporting requirements being put in place at the state level. 

This causes a trickle-down effect through the rest of the ecosystem. Everyone is going to need to be compliant, including caregivers, providers, self-direction fismcal intermediaries, and managed care organizations (MCOs).  

Here are some examples of how we are seeing this play out: 

  • In West Virginia and Florida, there is an 85% EVV compliance threshold expectation. 
  • New York State recently sent out a letter from the office of the Medicaid Inspector General (OMIG) to most providers who were not meeting minimum standards.  
  • In the executive budget that was released by New York Governor Hochul, a planned penalty where the MCO may receive a penalty for non-compliance has been introduced. 

We expect more penalties for lack of EVV compliance in the year ahead. 

More Agencies Will Consider Payer & Service Diversification 

Traditionally, homecare payment options have primarily revolved around Medicaid. However, the number of Americans ages 65 and older is doubling, and the subsequent demand for care will prompt providers to seek new and alternative methods of payment, such as:  

  • VA benefits  
  • Long-term care insurance  
  • Self-payment (FSA, HSA accounts, credit cards, cash)  

Agencies that can accommodate diverse payment choices are more likely to attract new clients and grow. Offering a diversified mix of payer options allows clients to select the provider they like best, rather than having to choose based on who accepts their payment method.  

Additionally, we’re seeing service diversification on the provider side. Providers who traditionally focus on personal care services are starting to move into other lines of business such as case or care management, value-based agreements with payers, and even private duty nursing.  

Ultimately, the most competitive providers of the future are going to have diversified payer streams and diversified services. 

Self-Direction Will Continue Gaining Traction 

Did you know that more than 1.5 million people self-directed the LTSS they received in 2022 and 2023? This represents a 23 percent increase from 2019, or almost 300,000 more people.   

Self-directed Medicaid services is when the members, or their representatives, have decision-making authority over their services. Depending on the program, self-directing participants can hire and manage the individuals who provide their services, while budget authority gives them control over how their budget is spent on services. This means a family member or friend can be their caregiver, or it can even be a child taking care of a parent.  

Self-directed care follows the person-centered care model as it gives members more control and choice over their lives and care. One report done by the National Library of Medicine even found that the self-directed groups had a lower total cost of care compared to provider-based care groups.  

We are seeing states put more focus on this area and we expect there to be continued growth in the self-directed vertical. 

Homecare Clients are Losing Medicaid Coverage 

During the Coronavirus pandemic, our government declared a Public Health Emergency (PHE). As a result of the PHE, there was legislation passed called Families First Coronavirus Response Act which stated that individuals on Medicaid could not be removed from Medicaid until the PHE had ended. So, for multiple years, people were not going through their yearly redetermination to see if they still qualified for Medicaid. Instead, there was what was called continuous enrollment. 

In March 2023, Congress put an end to the continuous enrollment provision and allowed states to restart the Medicaid redetermination process. Unfortunately, there continue to be major concerns as states go through this process. 

To date, 14 million Medicaid enrollees have been disenrolled due to the redeterminations. That has a huge effect on the LTSS industry because when people lose their Medicaid coverage, they also lose their LTSS coverage. What’s even more shocking is that 71% of all the people that were disenrolled were disenrolled for procedural reasons. 

Additionally, there is wide-ranging variation in disenrollment across states. In Maine, only 10% of the redeterminations resulted in lost Medicaid eligibility, while in Texas, 62% of individuals lost their Medicaid eligibility 

Because their clients have lost their Medicaid eligibility., homecare providers are seeing a drop in revenue. 

Understanding eligibility is critical because providers servicing their clients may go to bill them only to find out they lost coverage two months ago, and now Medicaid is not paying for those services.  

We anticipate that this will continue to affect the industry through 2024 or until stakeholders work out the procedural issues that are resulting in the disenrollments. 

The Industry is Consolidating 

We’ve been seeing increased industry consolidation for a few years. It picked up significantly in 2023 and 2024 is shaping up to be another year of meaningful consolidation. It’s important to note that this isn’t unexpected as industries evolve and mature.  

There are multiple factors that are driving the consolidation in our industry: 

  • Increased regulatory environment 
  • Changing consumer expectations like person-centered care 
  • Post-pandemic disruptions like the Medicaid redetermination process 

The home health, hospice, and personal care space continues to lead the healthcare services market for M&A activity. We’ve seen it happening with managed long-term care plans, provider organizations, and with vendors in the marketplace. 

There have been five big acquisitions on the managed care side in the New York market alone, and on the provider side, we ‘ve seen the same. For example, Help at Home acquired three large providers.  

Consolidation can be a highly effective and valuable tool for the industry. By joining forces and creating scale, homecare providers are in a better position to thrive. The merging of companies can also offer benefits to patients, such as cost savings and increased care coordination. Scaling allows providers to manage their way through regulatory compliance and improve operational efficiency.  

Transitioning from Required Software to Strategic Technology Investments 

Technology that helps meet regulatory requirements like the Cures Act has been around for some time, and most people have implemented a solution. Now, providers will look at what they need to grow their business in a competitive environment. That means a focus on tools that improve patient outcomes, streamline operations, and help you make data-driven decisions and stay ahead of future regulatory changes.  

Stay Informed and Adapt 

Understanding and adapting to these trends will be crucial for providing quality care and maintaining a competitive edge. For providers, staying informed and proactive is key to navigating these changes successfully. To ensure your agency is aligned with these trends and prepared for the future of homecare, we encourage you to reach out to HHAeXchange. Contact us today to explore how we can support your journey through these transformative times in the homecare industry.