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Humana (HUM) Boosts Value-Based Care With New PCF Model

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Zacks Equity Research
·4 min read
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Humana Inc. HUM recently expanded its value-based portfolio with the upcoming launch of the Primary Care First (PCF) model. With this unveiling, coordinated primary care will be accessible to members of selective Humana Medicare Advantage plans in 48 contiguous US states and Washington, D.C. This strategic action is aimed at boosting medical care outcomes, decreasing expenses for care and simplifying finances for the primary care groups.

This move is aptly-timed as the nation is still coping with the COVID-19 effects with its citizens being in dire need of quality primary care. The leading health insurer has been making constant efforts in provide value-based care so that healthcare for individuals is not compromised on amid such difficult times.

Notably, the PCF model was established by the Innovation Center at the Centers for Medicare & Medicaid Services (CMS) to boost primary care practices for shifting to value-based healthcare. The PCF model, scheduled to be launched on Jul 1, 2021, will be available to qualifying groups that concentrate on primary care services. It has more than 125 Humana MA HMO and/or PPO members. It will offer members a prospective capitated payment each month, which focuses on better outcomes. These kinds of payments will provide revenue stabilization, extremely vital for primary care practises during these trying times.

Humana is a newly-approved CMS payer partner. The health insurer will provide its own version of the PCF model in all the 48 adjacent states and Washington, D.C.  A similar model will be offered to eligible primary care groups currently in-network for Humana Medicare Advantage Preferred Provider Organization (PPO) and Health Maintenance Organization (HMO) plans.

Two-thirds of the company’s MA members seek care from primary care physicians via a value-based care deal with Humana.

Comparatively, Humana’s MA members who sought medical care from physicians in value-based deals during last witnessed lower hospital admissions and ER visits from the numbers recorded under Humana’s MA non-value-based arrangements.

As of Sep 30, 2020, the company had more than 2.7 million individual Medicare Advantage and commercial members cared for by more than 67,000 primary care physicians across 43 states and Puerto Rico.
It also reinforced its value-based relationship with Vancouver Clinic by announcing the opening of Evergreen Place, which is run by the latter. The company undertook a plethora of measures for extending the reach of its Medicare Advantage plans in the country. Notably, Humana is steadily intensifying its focus on providing value-based care across every part of the United States. It continues to ramp up efforts for bolstering its presence across the state.

Robust Medicare Business

The health care provider boasts a strong Medicare business, which has been witnessing growing membership for quite some time. It remains well-poised to benefit from a strong Medicare business through constant partnerships and extension of its product offerings devised to cater to the needs of several communities that it serves. The health care provider also intends to effectively address requirements of newer Medicare markets.

In fact, Humana raised its expectation of full-year individual Medicare Advantage membership to be around 375,000 members from the prior range of 330,000-360,000 members. The new estimate indicates anticipated growth of around 10% from the year-ago reported figure.
Furthermore, the health woes induced by the COVID-19 outbreak and an aging population spurred demand for Medicare Advantage plans.

Humana intends to capitalize on the prevalent scenario as it already rolled out a host of 2021 Medicare product offerings, such as Medicare Advantage and Prescription Drug Plans to name a few. Other health care providers, such as Centene Corporation CNC, UnitedHealth Group Incorporated UNH and Cigna Corporation CI also unveiled their 2021 Medicare Advantage plans on the back of the growing Medicare business prospects.

Shares of this currently Zacks Rank #4 (Sell) company have gained 14.5% in a year's time, outperforming its industry's growth of 10.1%.



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UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
 
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