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Unity set to launch agency

Rochester Business Journal
July 5, 2013

Unity Health System plans to launch a certified home-care agency next week.
The new agency, slated to go into operation Monday, will be the first in two decades to enter a local market long dominated by three large players: Lifetime Care, Visiting Nurse Service of Rochester and Monroe County Inc., and HCR Home Care.
The Unity home health care agency expects to serve some 500 area patients in its first year and to expand to be serving 5,000 by its third year, said Barbara Gray, Unity vice president for home and community-based services.
The Rochester Business Journal's most recent list of Home Health Care Agencies ranks 25 local home-care agencies. But only the three largest-Lifetime Care, VNS and HCR-were certified, a designation that marks them as eligible to collect Medicare and Medicaid payments. Unity's agency would become the fourth.
Lifetime Care and VNS are non-profits. Lifetime is affiliated with the area's largest health insurance carrier, Excellus BlueCross BlueShield. VNS is affiliated with the region's largest medical provider, the University of Rochester Medical Center. HCR is a locally based and employee-owned for-profit company.   
The other 22 home-care organizations on the list are a mix of non-profit agencies and for-profit firms. All are licensed agencies, indicating they are vetted and licensed by state regulators but have not been green lighted by the Centers for Medicare and Medicaid Services as eligible to collect payments from the federally run insurance programs.
The distinction is important for home health care providers because Medicare, which pays for a big slice of the post-surgical home care that is the home-care industry's bread and butter, directly or indirectly accounts for much of home-care agencies' revenue. A fair slice of licensed agencies' fees comes from certified agencies, which routinely contract with licensed agencies to supply aides. 
A 2008 report compiled by the Washington, D.C.-based National Association for Home Care & Hospice states that Medicare, the industry's largest single payer, accounted for 37 percent of home health expenditures in 2006. Combined home health-care costs paid by federal and state sources funded by Medicaid accounted for more of the market than Medicaid, the home-care trade group found.
When the state, noting increased need as its population ages, decided last year to lift a 19-year moratorium on approvals of new certified home-care providers, Unity applied, winning the certified designation last October.
It sought certified status for two reasons, said Jane Shukitis, Unity senior vice president for aging community-based services.
First, with a certified agency, Unity could directly supply services to patients in a Medicaid-funded long-term home-care program it has run since 1992, she said. Second, by keeping home care within its own system, Unity would be better positioned to deal with Medicare as the government program moves its payments to an accountable care organization model stressing tight coordination among clinicians.
For Lifetime Care, VNS and HCR, Unity doctors' home-care referrals to Unity's own agency will mean lost business. 
Doctors affiliated with or employed by Unity would refer most patients to the system's agency. Some 200 patients in Unity's Medicaid-funded long-term home-care program, who used to be served by aides hired from the other certified providers, now will be served by Unity's aides.
The new Unity-certified agency plans to hire aides, registered nurses and physical therapists as needs arise, Shukitis said. How quickly it adds staff will depend on how quickly it grows.
But Unity, which has run its own licensed agency, Unity at Home, for years, already has personnel to staff its certified startup. Unity at Home employs more than 150, roughly 140 of whom are home health aides. The licensed agency has inked a contract to supply aides to the new certified program, Shukitis said.
Unity has kept the area's certified agencies abreast of its plans and has heard no objections from them, Shukitis and Gray said.
"We are all pretty collegial here," Gray said.
Mark Maxim, HCR president and CEO, did not contradict the Unity officials.
"We all get along," he said.
Finger Lakes Health Systems Agency weighed competitive concerns among a number of factors it considered last year before recommending that state regulators approve Unity's application for certified home-care status last year, said Lynn Varricchio, FLHSA health planner.
Factors, including the region's aging demographic, indicate Monroe and surrounding counties would have sufficient demand for the services of a fourth certified agency, she said. Visiting Nurse Service of Western New York also applied, but FLHSA recommended against approval of the Erie County-based VNS organization's bid.
With its own network of employed and affiliated physicians and as a local hospital provider, Unity would be better positioned to serve local patients, Varricchio said. Unity's history as a longtime operator of a Medicaid-funded long-term care program was a prime consideration, she added.
"We saw continuity of that program as extremely important," Varricchio said.
Still, she conceded, with the addition of another player, competition among the region's certified agencies could heat up. While the need for home health care is certain to grow, money to pay for such care promises to grow scarcer.
The Centers for Medicare and Medicaid Services last week announced plans for substantial cuts in home-care funding, proposing to apply a 3.5 percent rate cut to 2014 funding. The National Association for Home Care & Hospice estimates that cut to mean an overall payment reduction of $290 million next year.
If CMS carries through on its plans, it would mean a substantially smaller reimbursement pie for certified agencies to carve up, Varricchio said. In weighing certified home health approvals last year, FLHSA anticipated funding would shrink but decided need should be the deciding factor.

7/5/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email

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