A Discussion with Steve Rodgers, CEO of AccentCare, on COVID-19

April 2020

Hi, I'm Matt Marguiles, Managing Director at Cain Brothers and head of our firm’s Post-Acute Care, Home Health and Hospice Advisory Practice. Our guest today is the Stephan Rodgers, CEO of AccentCare, one of the largest home health care providers in the country. Since 2012, Steve has transformed AccentCare into one of the most innovative and diversified providers of home health, personal care and hospice services across more than 175 locations in 15 states.

Has there been any material disruption in the clinical staff's ability to provide care in the home and the other settings that you provide care?

The entire health care system has gone through significant disruption as a result of the COVID crisis over the past six weeks. AccentCare is part of that system and we have partnerships with hospitals and other health care providers. We've seen changes in the systems towards social distancing as well as preparations for the surge of activities. There's been a flow of patients and a change in the way patients are moving into and interacting with the system right now.

We saw increased acute care activity in mid-March as facilities started to discharge patients out of the acute setting into the home, to create more capacity. The result is you have hospital systems that are essentially operating at about a 50 percent capacity level or so, in the marketplace.

Has there been any material disruption in the clinical staff's ability to provide care in the home and the other settings that you provide care?

The entire health care system has gone through significant disruption as a result of the COVID crisis over the past six weeks. AccentCare is part of that system and we have partnerships with hospitals and other health care providers. We've seen changes in the systems towards social distancing as well as preparations for the surge of activities. There's been a flow of patients and a change in the way patients are moving into and interacting with the system right now.

We saw increased acute care activity in mid-March as facilities started to discharge patients out of the acute setting into the home, to create more capacity. The result is you have hospital systems that are essentially operating at about a 50 percent capacity level or so, in the marketplace.

There has been a number of patients with elective surgeries canceled as well as a throughput of patients both on the inpatient side as well as in the emergency room significantly decline. This combination represents as much as a 30 percent drop in business during this time period.

There has been a tighter lockdown on the assisted living and skilled nursing side of the business. Assisted living facilities have put a framework in place where only central personnel are allowed in. We've managed to maintain a lot of access on the hospice side, especially with patients who are in an active dying process, as you need to be able to assist them.

Much of the therapy and ‘less needed’ or ‘less mandatory’ home health services for assisted living have been reduced significantly across the board. On the skilled nursing facility side of the business, there have been a variation of activities, including discharging patients. And then we've continued to have some access with the hospice.

From our physician standpoint, the biggest thing in the marketplace is finding them, because as they've had throughput in their own offices, many of them are only working half days or working virtually. And so, their interactions with their patients have been very different. There has been a modest drop off in patient interactions with some of the physician services, although it differs by specialty. Obviously, orthopedics has fallen off a cliff. But in the more acutely needed practices like oncology, a consistent flow of patients continues to move through the system.

In terms of your workforce, have they been able to stay healthy? Have they been willing to come to work, put themselves at risk by going across the threshold into patient's homes and into these facilities? What has been the feedback from your clinical workforce?

The workforce issues are huge and incredibly significant in an environment like this. Our clinicians are s experiencing the same shocks as the rest of the country. It’s been interesting to watch the stages as this has moved on and part of this is the way we manage through it. There have been some geographic variations in the way that I've seen our workforce react to these situations.

Overall, I'd say that the clinicians have stepped up incredibly well. Our organization has put our communications on steroids. Messages go out six days a week to our workforce and we have applications for both iPhone and Android operating systems that push text messages out to our workforce. I do a weekly video message.

One of the things that's been incredibly important, is our purpose of why we're in this business and what we need to do. To put your people on the front lines, they need know that they have the necessary equipment, appropriate training, and trust that their leadership isn't going to put them into harm's way.

When you address those needs through your communications, you can get team aligned around the mission. We have dedicated COVID teams of clinicians taking care of COVID patients today. And we have put in place monetary and other incentives as well as protection mechanisms for them. But I would say what has really made nurses, therapists and other clinicians’ step into this has been the call of purpose to help people.

We’ve had nurses and clinicians diagnosed with COVID. So far, none of our staff have been seriously ill or hospitalized. We've had some on the attendant side of the business. These are all tracked. We have an entire clinical process built around tracking quarantine to patients, whether presumed or actively quarantined, for COVID so we can monitor the return to work and the status of our employees at any given time.

Have you seen any pushback from patients or their families in terms of allowing your clinical staff to enter the home? Any fear around spreading the virus to family members or to the patient in their home?

Yes, we've seen pushback with respect to allowing clinical staff to enter a patient’s home -both the personal attendant side of the business as well as the home healthcare side. Early into this crisis there was a spike in missed home healthcare visits. There was also a spike even when we had valid referrals, where the patients did not want the service. We developed communication protocols and campaigns to educate our patient and client workforce around sterilization procedures and we must decrease the fear factor. Some of those missed visits were a result of adapting to how to deal with modest pushback coming from patients over time. The missed visits spiked out about two to three weeks ago, and over the course of the last several weeks we've seen a precipitous drop.

We have also been very persistent and followed up with calls to patients who initially said they didn't want service. We often call patients multiple times a week just to make sure that they are okay. In addition to refining our sterilization and protective procedures, we are encouraging patients to use our telehealth program because we have significantly increased our telehealth capabilities as well as our ability to virtually interact with patients through asynchronous communication applications that are HIPAA compliant, and more complex Medtronic-type devices. This has helped break down some of the barriers too.

What programs have you put in place for your call center and back office to move to a virtual office, working from home?

AccentCare always had a disaster recovery plan which included moving to a virtual workplace with staff being able to work from home. Whether a tornado or hurricane hit a service center, I always doubted whether it would work – and I have been pleasantly surprised.

Over the course of a week, our IT organization systematically worked to ensure that all our back-office operations employees had technology and soft phones installed on their computers as well as headsets, and appropriate Internet connections at home.

If an employee didn't have Internet, we issued MiFi cards to take home. Essentially over the course of four days, we moved 700 people home and working virtually. During that time period, we have seen zero drop in productivity. While they were still sitting in the offices, there was a lot of fear. As soon as we moved them home, that fear just dropped off. We have a daily call to check on our workforce status and what's going on; to ensure we have the right workforce in place to continue to process our bills, get them out the door and get paid - as well as all the centralized back office operations we have out of McKinney, Texas.

One of the things that's different about us is we have 100 percent of our intake centralized across our home healthcare platform. It was even that much more nerve-wracking during a time like this, but we've seen no drop off. And in fact, by having a centralized back office function, we have a greater pulse on what's going on. I get updates three times a day about how many referrals are coming in, what the admits are developing up like - it gives me a sense of what's going on inside the business.

Do you think there'll be a greater move towards centralizing intake at other key functions post this pandemic as companies think about better ways to protect themselves in the future?

I can’t speculate on what other companies are going to do but centralized intake has been an incredibly helpful capability for us because it gives you a great handle on the business side, going through times like this. There are risks, but I think what we’ve shown is that we can mitigate that risk coming through it. We have 100 percent of our insurance authorization and verification, so we know what's going on and how the activities are coming in. For example, Texas went live on RCD (Review Choice Demonstration for Home Health Services) on March 1 or February 29. We had to manage through RCD at the same time period, which is all the pre-claim that CMS put in place, at the same time period as we were putting in this operation. It’s given us incredible visibility into our ongoing operations and stability because we can see the pressure points that we might want to push on a little bit differently.

We monitor all our portals which 100 percent are centralized too. With the referral portal we can see what activities come in and where there might be problems. It would help us to immediately set up the COVID profiles out on all the portals, whether it’s for naviHealth or Allscripts, so that people know that we can accept COVID patients instead of relying on each of our individual sites to set up those profiles. It gives you a different level of visibility and capability to react to a situation like this.

Have the managed care plans and the Medicare intermediaries been processing claims at the same pace as they were pre COVID-19? Has there been any slowdown in their productivity?

We have had no drop-off on cash coming in the door and claims getting processed. We had one small health plan that was problematic. Their prior authorizations were completely backlogged, but to their credit, they adjusted their processes. We haven’t seen any drop off with the big players such as Aetna, United Healthcare and Cigna. The intermediaries have done a good job in maintaining their operations and claims flow and payments are still coming in the door.

You're spread across 15 states in the country, including three of the biggest, New York, Texas and California. Can you speak to the differences in how some of these states, particularly New York, Texas and California have reacted from a healthcare and policy perspective specific to your business and to healthcare generally?

In some ways, AccentCare was fortunate to be in California as they were the first in line outside of Washington. They got hit and so it allowed us to quickly establish procedures. When California started putting in the shelter in place orders, it sent shockwaves through the employee base there.

We had to be able to react to that and it allowed us to quickly establish the procedures that we've cascaded across the country. By the time that it got to New York, Texas and Mississippi, which is another very big state of ours, there are some cultural differences in the way that workforces and populations manage through this which we had to address. For example, two of our joint venture partners, UCLA and UCLA Health and UC San Diego are used to dealing with situations where they don’t have enough capacity because California is a state where it's too expensive to create more beds. They are constantly in a state of overcapacity and run at over 100 percent. As a result, both of our partners have refined procedures on how to manage overflow. For them, it was putting those procedures on steroids- how they use dorms, hotels, and even how they manage it. They already know how to use personal attendants in those spaces, and how to contract for additional labor. California already had some of these systems in place, while some of our Texas systems didn’t have alternative settings to manage the patient overflow to prepare for a surge.

There are differences in the workforce as well. The labor market in California, especially clinicians, is much more mobile. They are very committed to their jobs, but they are almost like independent contractors in the way that they move around. When you get into the Texas and Mississippi marketplaces, these are people who have been with the organization for a long time. The way you manage those workforces is slightly different -how you interact and incentivize them, to manage through difficult situations like this. I'm very proud of the teams that we have in place there. They are incredibly resilient people that have stepped in and faced this pandemic. Between the combination of patients that have died from COVID in the New York marketplace and even up in Massachusetts, we will have patients referred to us and that will die from this disease before we even get them into the home.

I'm very proud of the way our people have continued to take care of their patients. If you look at the horrific situation in New York, our volume has dropped off about 10 percent because people are still showing up and getting out to our patients in home healthcare. We’re providing our attendants and clinicians with the PPE they need to visit patients in their homes. They are incredibly resilient across the country.

It’s very different in the way that the populations are managing through this and the way you got to work with your workforce to motivate them.

Have you had a higher level of interaction with your hospital partners and helping them think through postacute discharge strategies and freeing up capacity? Or has it been business as usual with the hospitals?

If you look at AccentCare’s joint ventures and hospital partnerships, and there are slight differences with each of them, but we are closely linked with respect to managing their capacity. Our hospital partners been very transparent about when they expect the surge to happen. We have daily calls with UCLA, UC San Diego, Asante and Steward. Each of them addresses daily what is going on, what they are anticipating, discharges in the pipeline and what they need from us from a capacity standpoint. And then others are working with us on different programs.

At UCLA Health, we brought in our private pay personal attendant business because as they moved these into alternative settings, they had a need for more 24-hour attendant services. We were able to deliver a service like that in California because of our heavy clinical background in home health and our access to PPE for the private pay attendant population. We were able to quickly train our attendants on appropriate sterilization and protected procedures around this and get them the equipment that they need. With Baylor Scott and White, we instituted an emergency department / hospital at home program. There are certain conditions, instead of these patients ending up back on their floors, we've been able to work with them. There are very few providers who could deliver these services.

We're also providing a diversion program at Baylor University Medical Center Hospital as well as to their Austin marketplace. We're joined at the hip with all our joint venture partners across the board. The other thing that we're seeing is becoming a distinguishing opportunity for top-tier home healthcare companies. We have set up rigorous procedures and protocols on how to appropriately take certain patients out of the hospital system, get them stabilized in home and be able to give them a level and type of service that will give the systems’ confidence that we can maintain these days. There are only a few of us that can do this.

A lot of the mom and pop, and even smaller regional home healthcare companies, either don't have access to the PPE or training programs for the oversight and the clinical supervision that they need to be able to take on these patients. Hospital systems and marketplaces that would not have considered partnering with AccentCare previously have asked us to come in because they need a partner at the table to be able to work with them as the surge comes through their system to stabilize these populations. It's been an advantage for us and other top tier home healthcare clinical organizations.

Do you think the hospitals that aren't partnered with home health companies are going to rethink their postacute strategy, given the successes that you and some of your peers are having with your joint ventures? Do you expect to see a greater volume of potential joint venture interest and activity in the short term?

One of the things that has been consistent is the complete failure of the skilled nursing facilities system. The system has been unable to staff appropriately, nor were they able to provide the appropriate protective procedures required to manage their patients across the board. This has generated an incredibly high fatality rate inside of skilled nursing facilities during this crisis. Because some of us in the industry have been able to consistently deliver, many skilled nursing facilities are going to step back and recognize more than ever the value of being able to better manage throughput within their systems of having a reliable partner out there.

Whether that ends up becoming joint venture or a tighter preferred partner relationship, health systems will need to step back at the end of this pandemic to address these issues. Typically, the hospitals who help have a difficult time themselves being able to run these businesses, because they're very different than managing a facility. There is an opportunity to push them towards greater joint venture partnerships over time.

In terms of how the COVID crisis has impacted your strategic growth initiatives, are you still evaluating and executing on M&A and de novo opportunities through the crisis?

We have one active opportunity that we've continued to work through and we're excited to get done. It has slowed down a bit as we've had to manage through the pandemic but we’re still working on it. We haven't talked about it too much, but hospice has been incredibly resilient. In fact, our hospice has grown through this crisis. We're continuing to move ahead on some regional hospice plays and are excited about some other potential larger hospice plays that are coming out to the marketplace.

We've continued to work through some other joint venture opportunities as well, but it has slowed down. We're all moving into a new normal now. We're in this setting, but we've still got to execute on these businesses. We expect to show year over year growth in our business plan, both top line and bottom-line growth. It won't be quite the plan that we had set out before, but we still think we can produce that kind of growth.

I think you'll start to see it pickup as we get into this new normal in the summer months. I expect the summer months to be busy because everybody's going to be ready to get back to work. And I don't know if we're all going to be back in the office or not, but we must move these businesses ahead. We're hopeful because we're at the early end of a relationship with Advent [International]. We have a strong desire to significantly grow the top line and the bottom line of the business, both through M&A, joint ventures and the organic growth engine.

Do you think the government becomes more home health and hospice friendly from a regulatory and reimbursement standpoint, given how well your business and businesses like yours have fared over the last several weeks, particularly considering how much of a failure the SNF industry has been and the relief valve you've been providing to the health systems?

I would hope so. Unfortunately, as an industry, we get buried in regulatory and reimbursement issues. It's typically when things aren't going well. The lobbying and the partnership, as well as NAHC (National Association for Home Care & Hospice), have done a much better job in recent years in continuing to push our agenda out there. They have managed to get some wins in this.

The ability to have nurse practitioners actively manage and sign off on home health care cases was a big win for the industry and will open more business. This whole thing around telehealth is coming, and I think that without getting into a lot of details, we've been very big advocates. Once CMS starts to move down and get some of the insurance companies, we're confident that one of the largest insurers is going to pay for telehealth services in home health care. That will put some pressure back on CMS and I think we can show the efficacy of telehealth and driving an efficient, effective home health episode – that would be a big win for us.

Join Steve Rodgers, CEO of AccentCare, and Matthew Margulies, Managing Director at Cain Brothers, in a discussion of the COVID-19 pandemic, its impact on the healthcare sector and how AccentCare is responding.

Steve RodgersStephan Rodgers is the Chief Executive Officer of AccentCare®, Inc. He has over 25 years of healthcare experience including home care, insurance, consulting and employee benefits. Prior to joining AccentCare, Mr. Rodgers was CEO of OptumHealth Collaborative Care, a division of UnitedHealth Group, which owns, manages and provides administrative and technology services to healthcare delivery systems. Earlier in his career he was a healthcare executive at General Electric Company, responsible for purchasing healthcare benefits. Mr. Rodgers holds a B.A. in Biochemistry from the University of California.

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