The expansion of CenterWell Home Health served as a complement to the firm’s strong financial results during the first quarter of 2023, Humana leaders said Wednesday. Executives also continued to stress the popularity of Medicare Advantage even as the most recent final rule represented a hit to the company and industry.
“Our CenterWell portfolio, comprising primary care, home and pharmacy, continues to see strong growth,” CEO Bruce Broussard said in an earnings call Wednesday, according to a transcript. “As the largest senior-focused value-based primary care platform in the U.S., we now operate a total of 249 centers, serving 266,000 patients, including 207,000 across our wholly-owned and de novo portfolios, and nearly 59,000 patients served through our IPA relationships. This represents 16% growth in center count and 11% growth in patients served year-over-year.”
Earnings per share for the firm totaled $9.87 in their first quarter ended March 31. That represented an increase of 35% from $7.29 in the 2022 first quarter. Revenues expanded to a larger $26.7 billion in the first quarter.
Chief Financial Officer Susan Diamond said the CenterWell segment performed “modestly better than expected” in the first quarter. While total new start-of-care admissions and fee-for-service home health rose 7.1% year-over-year for the first quarter, the firm continues to experience pressure on recertifications due to utilization management programs of MA payers, she said.
During the quarter, the division completed an acquisition that added 11 branches with average daily census of 4,700 and approximately 25,000 admissions per year, she said.
“We are committed to continuing to grow our agnostic CenterWell Home Health business and expand market share through organic growth and strategic M&A activity,” Diamond said.
Leaders on Wednesday also addressed the negative impact of the MA final rule, which will give providers a 3.32% pay bump in 2024. Broussard pointed out that the rule reflects a decrease of approximately 112 basis points for the industry. The impact on Humana is expected to yield a decrease of approximately 23 basis points.
Still, he thanked the Centers for Medicare & Medicaid Services for its “thoughtful engagement” during the rate-setting process, which demonstrated ongoing support for MA, he said.. The rule introduced a new risk-adjustment model, which reflects revisions focused on conditions that are subject to more coding variation. Among the changes, many depression and diabetes codes were removed because they were duplicative and did not reflect cost.
“We are pleased CMS adopted a three-year phase-in and the risk model changes in the 2024 rate notice, which serves to mitigate the impact of unattended consequences to beneficiaries resulting from these changes,” he said.
Despite the changes to the program, popularity for MA will continue, he said during the Q and A portion. Each MA beneficiary experiences $2,400 in savings annually.
“We just believe that is so compelling that people are not going to walk away from that even though some of the benefits … might be changed,” he said.
