The Amedisys way

The Amedisys way

Amedisys CEO Bill Borne enjoys showing off his sprawling, open-plan headquarters on South Sherwood Forest Boulevard.

The building, a former grocery store, includes a data center, with several rows of servers and backups, and the Encore call center, where every cubicle has two computer screens and a webcam for face time with offsite employees.

Monitors in one small room display hundreds of dots, representing care centers scattered across the country. The map showed every center up and running, even though several Alabama locations had been knocked out of commission during the tornado outbreak last month and the Huntsville site was running on a generator.

"Our current [patient] census is probably 75,000 or 80,000," Borne says. "So if you think about it, we're an 80,000-bed hospital."

In a September 2009 speech, President Barack Obama said the rising cost of health care is the nation's biggest deficit problem.

"Nothing else even comes close," he said.

The question of how to control the cost of Medicare, the federal health care program for the elderly, is vexing and highly charged politically. Borne points out that 12% of the Medicare population accounts for 69% of the spending, primarily because they have complex, chronic illnesses. It is those patients that home health care is designed to serve, and Borne believes the industry can be a big part of reining in those costs—if only Washington would let it.

A 2009 study by Avalere Health claims Medicare could save $30 billion over the next 10 years by expanding access to home health care for patients with chronic diseases. Companies like Amedisys, the nation's largest home health provider by market capitalization, hope to position themselves as the coordinators of care for the oldest, sickest patients, working with hospitals, doctors and accountable care organizations.

Last year, Wyatt Matas & Associates, a Washington, D.C., investment banking firm, released a report dividing the home health industry into two camps: larger, more sophisticated firms that are developing into chronic care management companies, and smaller ones that either are unable or unwilling to do so.

Health care in general, driven by federal reform, is moving away from the fee-for-service model toward a holistic pay-for-performance approach. Wyatt Matas says more advanced home health companies already are providing a level of chronic care management that goes beyond the traditional care following a major illness or surgery, but those companies tend not to be able to demonstrate how home health can prevent costly hospital readmissions.

"To our knowledge," the report says, "the only company that is proving this model is Amedisys via their new contract with [insurer] Humana."

Amedisys provides full-service care management to Humana's chronically ill patients, Wyatt Matas says, following patients post-discharge and gathering information through the Encore program. Amedisys then takes that information to Humana and asks to be reimbursed for the full range of services.

"A lesson for the entire industry," the report says, adding the key to home health's evolution will be convincing the government, insurance companies and other payers to see home health as a comprehensive service and not as a short-term solution. But before the industry can get to that point, some serious questions will have to be answered.

In October, the Wall Street Journal revealed the Department of Justice is investigating Amedisys, making DOJ the third government entity to take a closer look at the company. A Journal article last April described how the Medicare patients of Amedisys and other home health companies received a high number of the most profitable home therapy visits, but few of the least profitable ones.

Other publicly traded home health companies, including Gentiva Health Services, LHC Group and Almost Family, also have attracted federal scrutiny. Possible overutilization of health care is a hot topic, and some people allege nurses working for Amedisys and other firms are pushed to make unnecessary visits to boost profits. A company caught filing false claims to a federal agency could be fined or lose its ability to do business with Medicare.

Borne says Amedisys is cooperating with the investigations, and says he doesn't expect resolution anytime soon.

"There's nothing to hide," he says. "We give it all to them. There are no secrets."

He admits home health has a long way to go in making its case for a greater role in the nation's health care policy.

"It's an uphill battle," he says. "The industry didn't have the legislative components in place. In Washington, they say if you're not at the table, you're on the menu."

Amedisys and some of the other major players recently formed the Alliance for Home Health Quality and Innovation. But the alliance hardly represents the entire home-health sector. Firms with less than $8 million in revenue, which make up two-thirds of the industry and often lack the sophistication and infrastructure of larger companies, might have different policy views.

Disease management companies, insurance companies and hospitals might also want to direct chronic disease management. Wyatt Matas says hospitals, with their powerful lobbying machine, are the biggest potential rivals, and it recommends the alliance partner with established groups such as the American Medical Association.

Borne says his employees get to know the patients. They know if medications are being taken properly and if there's healthy food in the refrigerator. Borne's argument makes sense, Louisiana Hospital Association President John Matessino says.

"They have hands-on people who go into the homes and know what's going on," he says, "and perhaps can take care of some things right there in the home."

Amedisys also has a hospice division, whose 67 locations generated 9% of the company's total revenue in 2010. Its hospice division puts the company in a position to manage a patient's care through the end of life. The distinction between chronic care and hospice care is a touchy subject—the mere mention of end-of-life planning in the federal health reform bill sparked talk of "death panels"—but Borne says family discussions ahead of time can alleviate some of the concerns.

He says the federal investigations aren't interfering with Amedisys' ability to hold regular meetings with the Centers for Medicare & Medicaid Services and the Medicare Payment Advisory Commission, which advises Congress, although there's still a lot of skepticism.

"We have the ingredients to be part of the solution," Borne says. "We're not the problem here."

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