New financial model may provide future for home visits

Monica Vandivort, MD, believed she had found her calling as a house call physician practicing in rural southeastern Arizona. She loved being out of the office and developing close bonds with patients. But when one of her Medicaid contractors ended its capitated payment program in late 2011, she found she could no longer make ends meet.

“By the end of 2013, I was frustrated with the reimbursement structure,” says Vandivort, who previously had received a per-member-per-month stipend from Medicaid in addition to Medicare reimbursement for dually eligible homebound patients. “I was giving great care and keeping patients out of the hospital, but it was very hard under the fee-for-service model.”

House calls have the potential to reduce healthcare costs among frail, elderly or otherwise homebound patients, according to Medicare data, but most physicians don’t provide them. Although home visits are reimbursable under Medicare, the standard fee-for-service rates usually don’t fully cover physicians’ expenses. 

Such conditions make it almost impossible for physicians in solo or small practices to make house calls work from a revenue standpoint without extra fees. As a result, house calls are more common in concierge and direct-pay practices that rely on membership fees as their primary income. 

Ramin Rafie, MD, of Southfield, Michigan, has conducted home visits for nearly a decade through his work with the Visiting Physicians Association, the nation’s largest house call medicine provider. He says it is “possible, but difficult” for smaller practices to conduct home visits, by identifying patients closer to the office to cut travel time and adding a non-physician provider to conduct the visit and share the workload.

“If doctors in private practice want to do [house calls], they can, under the right circumstances”, Rafie says. “But they could also spin them into a concierge medicine model … as a way to make it more economically feasible.”

Change may be coming. Medicare has been reporting positive results during the third year of its Independence at Home (IAH) home visits demonstration project, raising hopes that the home care incentive program will be extended to all physicians. First-year performance results showed savings of more than $25 million-$3,070 per beneficiary-with $11.7 million of that paid as shared savings to providers that met cost and quality targets.

Medicare officials hope the program will make a dent in the high cost of caring for the sickest and frailest patients, who make up 5% of all beneficiaries but account for half of the agency’s spending. To qualify for incentive payments, participating practices must reduce costs while meeting certain quality measures, including fewer hospital readmissions within 30 days and provider follow-up within 48 hours of discharge.

“There’s a booming population of the over-80 age group with serious chronic illness or disabilities, creating a great need in the community for this kind of care,” says Eric de Jonge, MD, incoming president of the American Academy of Home Care Medicine. “IAH provides a financial model that makes house calls viable if it can be expanded around the country.”

A financial model

If extended beyond the demonstration stage, IAH may convince more primary care physicians to adopt the house call model, says Jon Salisbury, MD, founder of Visiting Physician Services in Eatontown, New Jersey. The company employs six physicians and 29 physician assistants and nurse practitioners who make about 32,000 house calls per year to 3,200 active patients. Almost all of the company’s revenue comes from Medicare fees. “It’s not easy to make it financially,” he says. “You have to keep your overhead costs down and constantly look for efficiencies.” 

Last year, VPS was acquired by the Visiting Nurse Association (VNA) Health Group, a nonprofit offering home health, hospice, and palliative care services throughout New Jersey. The partnership broadens VPS’ home care team to include VNA’s nurses, home health aides, therapists and social workers.

For long-term success, it’s also critical to build an extended support team that includes clinical and administrative staff, says de Jonge. “The idea is that you are trying to address all of the medical and social needs of the patient and the family caregivers,” he says, “and that’s very hard to do as a solo practitioner or small shop.”

Building a support infrastructure may be out of reach for small practices working purely within a fee-for-service environment. However, under an incentive-based payment model such as IAH, small practices can participate in house calls by partnering with other physicians, nursing agencies, councils on aging, or other health and social service providers in their communities. 

IAH gives providers a financial stake in improving outcomes, and incentive payments can be substantial for participants who meet Medicare’s minimum savings requirement. For example, Visiting Physicians Association of Texas spent $4,088 per beneficiary per month -$769 lower than its spending target-and received an incentive payment of $1,727,392. First-year payouts to nine of the 17 participating practices ranged from $257,427 to $1,805,208.

The initial success of IAH has caught the attention of large health systems, many of which see a future for house call programs. For example, two years ago Vandivort signed on with Banner University Medicine at the University of Arizona in Tucson. The Banner house call practice is still too small to qualify for IAH, which requires participants to have 200 patients. However due to the success of IAH and other shared savings programs tied to home care, Banner and other health systems are investigating how such programs might fit into their population health strategies. 

How it works

The typical home care patient is very frail or sick. Many have been recently discharged from the hospital and need help with the transition. Medicare beneficiaries can also be considered homebound and qualify for home visits if they have cognitive, psychiatric, or social issues that present significant barriers, says de Jonge, who  cofounded the Medical House Call Program in Washington, D.C., an IAH site. 

Once inside the home, physicians can survey the patient’s living environment, which is invaluable to managing the patient’s care effectively, says Vandivort. “I can see if their home is safe, if they have food in the refrigerator and if they’re taking their medications-which is so much more information than I would get during an office visit,” she notes. 

De Jonge describes a visit to a 71-year-old blind and obese patient suffering from hypertension. During the visit, he surveyed the kitchen and noticed that the woman was eating a high-salt diet. The foods were exacerbating her hypertension and causing fluent retention in her legs and lungs-symptoms of congestive heart failure.

“The changes we made may have prevented her from eventually being admitted to the ER and being hospitalized. That’s good for her and for Medicare,” he says. 

House call physicians travel with a modern ”black bag” containing portable diagnostic and treatment instruments, says de Jonge. Those might include an electrocardiogram machine; equipment for taking blood and urine samples and vital signs; and portable X-ray and ultrasound machines. A laptop with wireless access to patients’ electronic health records is also essential. 

Vandivort stocks her car with a variety of tools, including kits for toenail care and ear irrigation; wound care and blood-drawing equipment; a nebulizer machine; IV medicines, bags, and fluids; and injectable medications for infections or joint issues.

The home care team, which might include a nurse practitioner (NP) and social worker, helps patients reconcile and adjust medications and interpret care plans if they  recently left the hospital. 

New patient visits tend to be complex, lasting one to two hours, says Salisbury, whose typical patient is between 80 and 85 years old. The physician establishes a care plan at the initial visit. Subsequent, shorter visits are handled by the group’s NPs and physician assistants and involve checking on medications, vital signs, and symptoms.

In addition to avoiding trips to the emergency department, house calls can provide a link with other levels of care when needed, says Vandivort. If a patient is very ill and not ready for hospice, she calls her colleagues at the hospital and arranges for direct admission. As a result, the patient has a smoother transition and doesn’t have to wait in the ED when he or she arrives.

Making it work

Salisbury has spent more than 20 years refining his processes and workflow to maximize efficiency and keep overhead costs down, and today maintains a bare-bones office staff to support his care teams in the field.

Scheduling and geography play a huge role in maximizing efficiency, he says. For example, NPs are assigned to patients living within 12 miles of their homes so as to minimize travel time. Similarly, new patient visits are grouped together geographically, allowing physicians to see between six and 10 patients per day. To break even, each clinician needs to have about 30 fee-for-service encounters per week, he says. 

High patient turnover is unavoidable for practices that focus on caring for sick, elderly patients, says Salisbury. VPS’ entire patient panel changes every two years, on average. However, that’s up from 16 to 18 months several years ago, he says, suggesting that earlier intervention by house call clinicians is contributing to patients living longer.

Some physicians focus on making calls to assisted living facilities where they can see several patients in a relatively short time, says Vandivort. It’s important to know frequently used billing codes so as to maximize reimbursements.

For example, Medicare now pays a separate fee for non-face-to-face chronic care management services for patients with multiple chronic conditions. Home providers may be eligible to use the code (99490) for those services if they meet certain criteria, such as creating comprehensive care plans and providing 24/7 patient access.