This comment was an anomaly, in terms of its brevity. While most respondents expressed similar sentiments, they chose to utilize more words to do so.

Overall, providers went into detail about the specific challenges they are facing in their market, and why the proposed payment rule would impact access to care.

Below are the comments Home Health Care News thought stood out from providers, as they see their margins decrease year over year.

Some comments have been edited for length and clarity.    

***

Within our market, the incidence of home health admissions that include wound care and specifically the types of wounds included within this proposal are increasing. Any decrease to reimbursement for HHAs who are treating these types of wounds would be detrimental to patient care. The cost of supplies continues to increase like everything else in the economy and labor costs to access skilled nurses or therapists who actually have proper wound care treating in these types of cases are also increasing.

In our agency, we recently had to refer a patient who was sent to us to another agency due to the patient’s insurance. The patient developed a pressure wound and the nurse who was sent to treat the patient was not properly trained in wound care. Over the next few weeks, the patient reported that the wound was increasing in severity and he was concerned that the nurse did not seem to know what she was doing. He requested that she get some additional help. The nurse brought her supervisor to observe the wound care provided and ask if it was proper or adequate. The supervisor instructed her that the only thing she could do correctly at that point was call an ambulance for the patient. The patient had developed gangrene in the wound and was transported to a hospital. A few weeks later, the patient’s leg was amputated just below the knee. The result of amputation resulted in significantly higher expense to Medicare than paying for adequate wound care wound cost. Worse, the patient’s quality of life is now irreversibly affected by loss of limb.

I understand the need to try to reduce expenses and cut costs across our federal budget. Home health is a great program that allows for significant improvement in patient outcomes while decreasing hospitalization. I strongly encourage Medicare to consider increasing spending for home health companies to provide quality supplies and hire or train their staff with the necessary certifications and skills needed for advanced care in the home. While the expense for home health may increase, I don’t think it’s a surprise that the rate of hospitalization will decrease and that significantly decreases the overall cost of health care while also improving patient outcomes.

— Primary Home Health LLC

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I am an administrator of a small independent home health care agency in Calumet City, IL. Every year we are fighting for survival and every year CMS is proposing to cut reimbursement and adding more regulations. Unfortunately, it is the same this year. There has got to be a way that you come up with a plan to stop this madness. It is difficult to pay nurses and have enough people in the office to maintain all of the regulatory requirements. Can you please remove some of the regulations so we can get back to the business of taking care of patients? You just extended RCD 5 additional years. You have extended HHVBP. You have added NOAs but didn’t remove any regulatory burdens nor have you given an increase in reimbursement. The hospital systems are dropping home health agencies like flies in Illinois because it appears we are not valuable. Independent home health agencies are closing because they can’t provide care, pay field staff and keep up with the regulatory burdens put upon us by you. We need a break, please!

— Deirdre Hezekiah Onwukwe

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I would like to express my concerns regarding the recently released proposed rule for the CY2025 Home Health Prospective Payment System (HH-PPS). As an occupational therapist and a former home health provider, the proposed changes could significantly impact access to quality occupational therapy services for Medicare beneficiaries. Reducing payment for key occupational therapy services raises alarms about the sustainability of these essential services, which play a crucial role in enhancing the well-being and independence of patients in their home environments. It is required to maintain focus on ensuring that Medicare beneficiaries receive the highest quality of care, and adequate compensation for occupational therapy. I urge CMS to reconsider these proposed payment reductions to ensure that patients continue to receive the necessary occupational therapy services for their recovery and overall health.

— Vera Gallagher

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While we appreciate CMS’ efforts to combat fraud, waste, and abuse, CMS must provide clear guidance to any provider under a PPEO, including the timeline for reviews, the process for any appeals, and the criteria for when sanctions and penalties are imposed.

CMS’ proposed rate reduction does not consider the high costs of inflation, staffing shortages, turnover, and labor stresses that home health providers are facing. Combining those challenges with significant cuts to funding would reduce our patients’ access to life-changing care. This affects the patients who need us the most who may not have the funds and are most vulnerable.

The most vulnerable populations rely on our high-quality care and these cuts will restrict their access to care, particularly in rural and underserved areas.

Changes to the wage index will move some agencies from an urban designation to a rural one, thereby further reducing their reimbursement at a time when rural agencies are facing increased challenges recruiting and retaining employees.

We give excellent care to all who need us and even give charity/indigent care as we can but further cuts to our funding would make it almost prohibited. Our clinicians work very hard and they are not given annual raises, in fact some have not had a raise in almost 3 years. Home health is not an easy job, it is an act of the heart and yet they give everything they have to the patients and community we serve!

— Seaport Scripps Home Health

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My home health agency serves rural Wyoming. With the high cost of supplies, labor, recruitment and overall cost to service a rural area, the proposed Rule will nearly eliminate our ability to continue to service these areas. We are currently facing high inflationary wages And stiff staff competition with the hospital and other health care providers. A 4% reduction in our reimbursement will only exacerbate the issue.

The 5% wage index cap also prevents our rural communities from obtaining a market rate wage that allows us to hire competitively.

The need for home health in rural communities is only becoming more and more necessary. This rule will prevent all home health agencies from being able to have sustainable reimbursement to service rural communities.

CMS needs to consider the overall stress home health agencies are under with the current economic environment. CMS should consider a reimbursement increase of 5%.

— Symbii Home Health and Hospice Wyoming

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Compared to CY 2024, CMS estimates a decrease of 1.7% in Medicare payments to HHAs for CY 2025. Henry Ford Health is concerned that the annual update to the home health payment rate has not kept pace with significant increases in the cost of labor, medical supplies and other resources needed to provide high-quality care to our patients.

Much of this cut is attributable to a 4.067 percentage-point decrease that is a result of the behavioral assumption adjustment. CMS’ behavioral assumption adjustments are in direct response to regulatory changes that home health providers are required to follow since implementation of the PDGM on January 1, 2020. These behavioral assumptions are challenging because they are punishing home health providers for decisions brought on by regulatory change. For instance, one reason for lowering payments under the behavioral assumption adjustment was the assertion that there would be an increased volume of “home health periods of care” that would receive a comorbidity adjustment resulting from considering all 24 comorbidities on a claim rather than just five. Specifically, the intent of the PDGM was to rely more heavily on clinical characteristics and other patient information to place home health periods of care into meaningful payment groups, with 432 possible case-mix adjusted payment groups.

As a result of the effects of these changes – as well as to PDGM calculations, low-utilization payment adjustment (LUPA) threshold and outlier reimbursement – HHAs will experience even deeper cuts than the 1.7%. Henry Ford Home Health Care estimates that the reduction is closer to 2.3%.

— Henry Ford Health

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You continue to cut reimbursement to providers and limit access to services that impact independence, member health, sustainability for providers, and ability for members to remain at home. You cut these services and then blame the providers for poor outcomes. By limiting access to these services, Medicare in the end spends more money to provide services to members in hospitals and skilled nursing facilities. It is time to support members in their home and maintain their health in the first place. It is far less expensive for Medicare to treat people who are healthy enough to recover than to provide services once diseases have progressed and prognosis is far less positive.

— Anonymous

The post ‘We Need A Break, Please!’: Home Health Providers Sound Off On CMS Over Rate Cuts appeared first on Home Health Care News.

“We heard, consistently, that there were concerns about the applicability of the 80% threshold to small providers,” Melissa Harris, the deputy director of the Medicaid and benefits health programs group at the Centers for Medicare & Medicaid Services (CMS), said Tuesday during a CMS open door forum. “There might be other circumstances in which it would be a particular hardship for providers to meet the 80% threshold.”

Indeed, home-based care providers and industry advocates have been vocal critics of the 80-20 provision. While many industry insiders are in support of higher caregiver wages, they pointed out that provider’s rate concerns remain unanswered.

“We’re in agreement that the direct care workforce is underpaid and underappreciated,” National Association for Home Care & Hospice President William A. Dombi said last week at the organization’s annual conference. “We don’t agree that the solution is to say, ‘You have to pay 80% of your payment rate as compensation to that workforce,’ when the states are paying you at such an abysmal level for the service. There’s nothing in this rule that increases payment rates for the providers of services.”

As part of the finalized version of the rule, there are a few exceptions that attempt to address provider concerns.

For small providers, states can choose to develop a threshold with a percentage separate from the required 80%.

“States need to do some things when they take advantage of that small provider threshold,” Harris said. “They need to tell us what that threshold is. They need to tell us how many of their providers are going to be meeting that threshold, and then they need to give us a plan for how to bring those providers, over time, into compliance with the 80% threshold.”

Another option under the rule, states can choose to have a hardship exemption. This exempts providers from meeting a specific payment adequacy threshold at all.

Similar to the small provider threshold, states will need to determine a criteria for defining hardship. States will need to identify how many providers fit into this category.

Plus, states will need to have a plan to eventually bring those providers into compliance at a certain point.

However, CMS is able to remove the compliance plan requirement for states if the combined total of organizations that fall under the hardship exemption and the small private provider exemption is less than 10% of the state’s providers.

“We’re very hopeful that this provides some opportunities for relief, and in specific circumstances,” Harris said. “But we also stand behind the achievability of the 80%, based on our conversations with a broad range of stakeholders. Should states, in their conversations with providers, decide to avail themselves of either of these opportunities, they’re certainly available, as long as states adhere to the requirements that surround both.”

During the open forum, Harris also emphasized the importance of providers communicating with state Medicaid agencies.

“Even though this is a federal regulatory requirement, there’s a lot of state shaping of how they’re going to meet the 80%, including whether or not they’re going to take advantage of the small provider threshold, [or] the hardship exemption opportunity,” she said. “They’ll want to be hearing from their provider community with the very detailed concerns that you’re laying out. Our goal, obviously, is not, through this provision, to make it harder for a provider to participate in Medicaid. Our goal is to say that we have to take action in recognition of the national crisis that is jeopardizing the stability of the direct service workforce.”

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Last week, the “Ensuring Access to Medicaid Services” rule was finalized. The impetus behind the rule is to strengthen access to home- and community-based services (HCBS) for Medicaid beneficiaries.

The provision that has grabbed the most attention is the one that would require 80% of Medicaid payments for HCBS to be reserved for direct care workers’ wages.

During the hearing, House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-Wash.) was critical of the 80-20 rule.

“The Medicaid access rule’s so-called 80-20 policy will lead to home care agencies reducing the amount of care that they can provide,” she said.

Daniel Tsai – the deputy administrator and director of Center for Medicaid and CHIP services at CMS – defended the 80-20 provision, pointing to low wages in HCBS and the correlation to care quality, as he also did last week.

“Data shows that direct care workers typically earn low wages and receive limited benefits, contributing to a shortage of direct care workers and high rates of turnover in this workforce, which can limit access to and impact the quality of HCBS,” he wrote in his witness testimony. “By supporting and stabilizing the direct care workforce, this provision will result in better qualified employees, lower turnover, and a higher quality of care, improving access to quality care for Medicaid beneficiaries.”

CMS wants to ensure that this percentage of Medicaid payments are going to direct care workers instead of things like administrative overhead or profit.

Tsai noted that he thinks the policy falls in line with its efforts to establish appropriate oversight of states’ HCBS systems.

In his written testimony, Tsai also pointed to other aspects of the rule that he believes will improve access to care long-term.

“The Access Rule establishes a new strategy for oversight, monitoring, quality assurance and quality improvement for HCBS programs; strengthens person‑centered service planning and incident management systems in HCBS; and improves data collection regarding compensation to the direct care workforce,” he wrote. “The rule also provides key insight into access

challenges for HCBS by requiring states to report on waiting lists.”

Tsai also stated that CMS leaned on the responses they received from stakeholders across health care when making final policy decisions.

“We relied on this feedback to inform our final decisions on policies that ensure we strike the right balance of ensuring payments go to workers, while not disincentivizing training opportunities, and ensuring states have time to collect data and implement the policies effectively,” he wrote.

Ultimately, Tsai emphasized that CMS will continue its mission to enhance Medicaid.

“About 85 million people receive health coverage through Medicaid and CHIP,” he wrote. “While these programs have done immeasurable good for hardworking families across our country, there is still more to do to continue to support and strengthen these programs. We are committed to continuing to build and support a stronger Medicaid program by serving the public as a trusted partner and steward, advancing health equity, expanding coverage and improving health outcomes.”

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That’s why, as the year comes to a close, Home Health Care News wanted to take a look back and call attention to some of our favorite under-the-radar stories. These stories cover the most well-known companies in the industry, the conflict between conveners and home health providers, the final payment rule and much more.

Here are some of HHCN’s favorite hidden gems of 2023.

What An Amedisys-LHC Group Combination Under Optum Would Mean For The Home Health Market (June 9)

Arguably one of the biggest M&A stories to come out of the home health world earlier this year, was that UnitedHealth Group’s (NYSE: UNH) Optum arm acquired LHC Group, with a $5.4 billion price tag attached to the deal.

When Optum threw its hat in the ring for the chance to purchase Amedisys Inc. (Nasdaq: AMED), another home-based care giant, this news inspired HHCN to imagine what it would look like to have both companies under one umbrella.

We stacked up Amedisys’ and LHC Group’s home-based care assets, compared footprints, looked at each company’s non-home health services and more.

Since this story was released, UnitedHealth Group’s Optum has officially agreed to purchase Amedisys. This means that home health industry insiders and stakeholders will likely soon have a clearer picture of what these combined entities will actually look like. The deal is slated to close in 2024.

Gentiva Believes It Can Turn ‘Loss Leader’ Palliative Care Into ‘Game Changer’ (Oct. 4)

Historically, palliative care has been a tough business for home-based care providers. It has a difficult payer landscape, and it’s not a major money maker for providers.

“One of the things that we’re really trying to build out is an advanced palliative care model,” David Causby, CEO and president of Gentiva, said during Home Health Care News’ FUTURE conference in September. “Palliative care is very difficult today. It’s built on the physician Part B schedule. It’s a loss leader. There’s just not very good reimbursement.”

However, Gentiva — a company that was born out of the divested home care and hospice assets of what used to be Kindred at Home — believes that it will be able to crack the code.

“We personally feel that’s one of the greatest needs,” Causby continued. “One of the biggest spends in the health care system today are those patients that sit in that middle bucket that don’t qualify for home health and don’t qualify for hospice. That’s really where palliative should sit.”

Amedisys CEO Paul Kusserow: If Conveners Don’t Change, Their Day Is Coming To An End (Jan. 9)

The complicated — and at times antagonistic — relationship between home health providers and coveners is well-known across the industry. This year, providers have been more publicly vocal about their issues with conveners than ever.

Industry big-wig Paul Kusserow went on the record during the J.P. Morgan Healthcare Conference at the start of the year, where he issued a grave warning.

“Right now, I can take better care of the plan’s patients than a convener can,” he said during his appearance at the conference. “That’s the conversation we’ve been having. If they don’t change, their day is coming to an end.”

Operating Conditions Worsen As CMS Continues To Gaslight Home Health Providers (Nov. 15)

Every year, providers offer the U.S. Centers for Medicare & Medicaid Services (CMS) mountains of data and evidence for the agency to consider when finalizing the home health final payment rule. Providers have begun to believe that this data and testimony have fallen on deaf ears.

“Almost nothing changed,” VitalCaring President Luke James said during an HHCN webinar that took place in November. “There was adequate political pressure placed upon CMS. I believe the Senate Finance Committee hearing did a great job of highlighting the reality of what we’re facing here as an industry. The advocacy efforts did pay off in terms of reducing the overall cut that was ultimately levied on the industry in the final rule. But, unfortunately, getting into all the nuts and bolts, very little changed for us.”

What’s more, providers are still facing a number of challenges, such as high referral rejection rates and high LUPA rates.

‘We’re Going To Be Here For A Long Time’: Inside The Vistria Group’s Home-Focused Investment Strategy (Sept. 18)

The Vistria Group, a Chicago-based private equity firm, has been one of the most active PE players in the home-based care space. HHCN caught up with David Schuppan — the firm’s senior partner and co-head of health care — to learn more about the strategy behind the company’s vast home-based care portfolio.

Elimination Of Non-Competes Would Have ‘Major’ Effect On Home-Based Care World (Jan. 20)

The Federal Trade Commission’s (FTC) proposal to ban non-compete agreements could have big ramifications for the home-based care space.

“I definitely think it’s major. It’s extraordinarily significant,” Angelo Spinola, the chair of home care, home health and hospice at the law firm Polsinelli, previously told HHCN. “If you can’t stop a key executive from leaving and competing against you, that will have a significant impact on the industry.”

For now, it seems that the FTC has kicked the can to next year. In 2024, the FTC will formally vote on the ban. HHCN will continue to follow this story closely.

Longtime LHC Group Leader Keith Myers Breaks Down The Decision To Join Optum (Sept. 27)

The news that LHC Group was acquired by UnitedHealth Group’s (NYSE: UNH) Optum made waves at the start of the year, as mentioned above.

In September, Keith Myers took the stage at HHCN’s FUTURE conference to provide some insight into what the deal means for LHC Group’s next phase as a company.

“We’re now positioned as the home care platform within a broader provider network, and we’re able to work with other providers and participate in a risk model and care for more patients,” he said in the fall.

The post 2023’s Hidden-Gem Stories: Home Health Struggles, Non-Compete Bans, An LHC Group-Amedisys Combination appeared first on Home Health Care News.

Every year, industry stakeholders anticipate the U.S. Centers for Medicare & Medicaid Services’ (CMS) release of the home health proposed payment rule and the final rule.

The final rule’s provisions and updates determine what the Medicare home health landscape will look like for the foreseeable future, but sometimes providers aren’t well-versed on the ins and outs of the rule-making process.

On an annual basis, there are several steps that CMS routinely goes through to put together the home health proposed payment rule.

It begins with the annual inflation update, otherwise known as the market basket index.

“That process to get to the proposed rule has two main elements to it,” National Association for Home Care & Hospice (NAHC) President William A. Dombi told Home Health Care News. “One of them is to look at what the formula is for determining the annual inflation update, and that examines a variety of cost elements and the weight given to those cost elements.”

Periodically, there’s a rebasing of the market basket index, and a revision to the weights given to each element, according to Dombi.

“That would entail examining what the inputs are, and then what the sources of those inputs might be,” he said. “CMS uses a combination of numbers from the cost report and Bureau of Labor Statistics data.”

This first step is for CMS to determine whether it will stick with its most recent formula or make adjustments.

Data is then sent to an outside firm that CMS uses to forecast what the inflation rate was estimated to be for the particular year. This year, CMS likely used data from the third or fourth quarter of 2022, Dombi noted. 

“The forecasting methodology is employed to say, ‘Okay, if this is what the trends look like, this is what the inflation in cost will be during 2024,’” he said. “It really is a prediction of inflation costs.” 

Budget-neutrality adjustment — which has received industry pushback after the switch to the Patient-Driven Groupings Model — is also a big factor when it comes to the proposed rule and the proceeding final rule.

Achieving budget neutrality is a fairly complex process, health care policy expert Lisa Grabert told HHCN.

“CMS has rules that they have to follow [regarding] budget neutrality, and they’re given some flexibility in how they can achieve that,” she said.

Grabert is a research professor at Georgetown and Marquette universities. Post-hospitalization issues within the Medicare program is the focus of her work. She also previously worked as a Capitol Hill aide in the U.S. House of Representatives Committee on Ways and Means.

In general, when CMS makes big changes – for example, going from 60-day episodes to 30-day episodes – those changes have to be budget neutral.

“They have to go back to the old payment system, and make sure that any of the changes made to the new system, in comparison, are totally neutral from a budgetary standpoint,” Grabert said. “When you change a payment system, you embed different incentives in place, and so people will behave differently. When they behave differently based on those incentives, those are not intended behaviors from payment reform.”

Grabert noted that home health providers and advocates find this controversial because CMS is still monitoring those behavior changes, and then recouping money based on a comparison to the old payment system for unintended behavior changes.

Another component of the proposed rule is the wage index.

The wage index is a collection of: information from the Census Bureau; information from the Bureau of Labor Statistics; and information from CMS’ own claims data, relative to what’s changing from year to year and relative to the cost of labor throughout the country.

“The wage index is an often overlooked – but very important – element in how much the provider is ultimately paid, and it changes from year to year,” Dombi said.

CMS also takes another step, having to do with the outlier. Outlier payments are meant to reduce the risk of caring for extremely high-cost cases.

By statute, the outlier is intended to spend no more than 2.5% of the total spend in home health. CMS has to figure out the formula for applying the outlier based upon the previous year’s experience.

“In particular, looking at the fixed dollar-loss ratio,” Dombi said. “That is something that, on a year-to-year basis, goes up or goes down – sometimes very little, never usually very much, in order to fit it within that 2.5% budget.”

The final component of rule-making is focused on case mix weights. CMS looks at claims data to see what resources, on average, have been applied to each case mix category. This process helps CMS determine if they need to recalibrate.

Ultimately, Congress also has the power to step in and make modifications.

“For example, Congress can say, ‘Regardless of what the forecast would work out to be for the market basket index, we’re going to set it for X,’” Dombi said. “They’ve done that multiple times over the years. Sometimes, Congress steps in with an even bigger change like they did with PDGM, and says, ‘We’re changing the whole model.’” 

In the weeks between the proposed rule and the final rule, there is a 60-day comment period that takes place. This time gives the general public the ability to submit formal comments to CMS.

“Within that 60-day comment period, there is a pretty big attempt to try to get CMS to change something from what they proposed,” Grabert said. “After the 60-day comment period closes, CMS looks through all of those comments. They try to identify themes where they have consensus, and they use those comments to inform what they will put in the final rule.”

The comment period and general advocacy from trade associations can factor significantly into what becomes the home health final payment rule, a CMS spokesperson told HHCN in an email.

In order to determine the final rule, CMS also looks at the market basket index again, using more recent data than they had for the proposed rule. The agency also has a more complete set of claims data to determine the recalibration. This can also lead to a potential revision of the outlier analysis that’s done on the fixed dollar loss ratio.

On the flip side, the budget neutrality adjustment likely won’t change from year to year with PDGM.

“It’s not like they’re going to move to a new calendar year of data,” Dombi said. “They kind of stick with what they’ve done for the proposed rule.”

The comment period for the 2024 proposed payment rule closed on Aug. 8, 2023. CMS is expected to finalize the payment rule in late October or early November.

The post How The Sausage Gets Made: Inside CMS’ Home Health Payment Rulemaking Process appeared first on Home Health Care News.

The main headline was CMS’ decision to propose a home health payment decrease of 2.2%. The proposal also includes a 5.653% permanent rate cut.

As a response, the National Association for Home Care & Hospice (NAHC) filed a lawsuit against CMS and the U.S. Department of Health and Human Services (HHS) last week, alleging that policymakers utilized an inadequate methodology to determine payment.

Aside from the cuts, providers also had other concerns about the proposed payment rule.

Home Health Care News heard from eight home health executives and leaders who weighed in on what ramifications the proposed rule could have on their business — and the industry at large — if finalized. Aside from the cuts, some of them also touched on other aspects of the proposal that they believe the industry should be paying close attention to.

Responses are listed below, lightly edited for length, style and clarity.

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The cumulative effect of multiple years of CMS cutting what home health providers would otherwise receive as a rate update is taking its toll on patient care and restricting access to the home health benefits that Medicare beneficiaries have earned. As a result of the cuts, like our peers, VitalCaring will have fewer resources in 2024 for the patients who trust us to provide vital services. Our commitment to providing excellent care and meeting patient expectations won’t change, but we will need to be more creative in how we deliver services to meet this challenge. Leveraging technology and equipping our clinicians and caregivers to maximize their time will be key strategies to use in navigating a tougher financial environment.

Apart from the actual rate cuts, the most alarming element of the proposed rate rule is the cut that CMS considered, but did not propose to implement. Representing more than a 20% reduction in payment rates, the temporary payment adjustment CMS calculated and considered could have had a devastating impact if levied. The changes CMS proposed to LUPA thresholds, case mix weights, and points ascribed to functional impairment levels all need to be reviewed and understood by home health agencies. CMS’ proposal to increase oversight and regulation specific to home health and hospice M&A activity will likely have impacts on the M&A landscape in 2024 and beyond. Finally, the proposed changes to the Home Health Value-Based Purchasing (HHVBP) Model that begins in 2025 will include significant changes to that program and each home health agencies performance scores within it.

— Luke James, president, VitalCaring

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In proposing another round of harmful cuts, CMS is ignoring the basics. While more patients are being referred to home health care, fewer are actually getting care because home health agencies don’t have the workforce. Since 2018, there’s been more than a 300% increase in patients not admitted onto home health because agencies did not have the staff. That’s putting greater strain on hospital capacity by increasing readmission rates and average lengths of stay. The situation is even worse in communities suffering from “home health deserts,” where patients are starved of health services and disparities in care continue to rise.

CMS is moving the goalpost on HHVBP yet again by changing the baseline year to 2023 — after changing it from 2019 to 2022 last year. This rewards agencies that have not invested in quality improvement programs, penalizes those that have, and makes it harder to set goals, measure progress and make any needed course corrections.

— Dan Savitt, president and CEO, VNS Health

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As conservative as we would like to be as home health care providers, the additional 2.2% proposed for 2024 in addition to the previous years’ cuts could prove really problematic for smaller agencies such as ours. The culmination of the PDGM decreases of -3.925 and value-based purchasing on the horizon sets the stage for very selective and strategic admissions and patient-centric recertifications driven by maintenance therapy, efficiency and lower-acuity patients.

Thus, many of the patients who need care at home the most may carry a higher financial risk or burden to most or many providers. The unfortunate catch-22 results in readmissions to hospitals and, perhaps, even being wait-listed for long-term care centers and rehabilitation centers. These alternatives bear greater expense to the health care continuum as a whole and counters the goal of aging in place.

— Cleamon Moorer Jr., president and CEO, American Advantage Home Care

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The home health industry is being forced through a transition with these egregious rate cuts. And whether in sports, personal life, or business, transitions hurt. All cost structures will need to be evaluated. All managed care contracts will need to be renegotiated. Hard choices and cuts will have to be made, but with a focus on never compromising patient care. The proposed cuts are likely to impact the ongoing viability of some providers, which will lead to reduced access to skilled home health services for a vulnerable population.

CMS has a blank check to continue to rebase the home health industry indefinitely in the way they are interpreting the budget neutrality provision. Every year going back and evaluating our cost of service to 2019 and how the business was managed then. We have no choice as an industry but to put every resource we have into the courts, and legislative and regulatory advocacy, to get this changed, or else we will be paying for this for years.

— Stephan Rodgers, CEO, AccentCare

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We are projecting that, if finalized, the 2024 proposed payment rule will decrease our revenue by approximately 3.17%. The proposed rule seems to solidify the theory that CMS is trying to trim the number of home health providers in the market. The cuts will obviously be detrimental to smaller providers that do not have the volume to spread their overhead expenses.

— David Lester, CEO, ProHealth Home Health & Hospice

***

The cost to provide care continues to rise at a time when we have an aging population and an increased demand for in-home care. The methodology utilized in the proposed rule does not reconcile with the environment we are facing. A rate cut under these circumstances could create a challenge for providers and ultimately deny access to quality care for patients. My concern is access to high-quality care, especially in markets that may already have limited access. The proposed rule will only exacerbate that concern for me, our patients and the families we serve.

— David Klementz, president and CEO, Traditions Health

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The proposed rule certainly isn’t helpful at a time when there’s increasing demand for home-based care and patients with more complex care needs can be treated safely and effectively at home. We need adequate resources to meet the needs of our aging population and provide the access our communities require, so we will continue to work to educate policymakers. It’s clear not only that people prefer to receive care at home, but that high-quality home-based care achieves timely transitions from hospitals to home, better coordination of care and fewer rehospitalizations — all of which produce overall savings to the Medicare program.

— Laura Templeton, executive vice president and chief operating officer, Compassus

***

These cuts will just make it more difficult to meet patient care needs. The standard payment amount for a 30-day home health episode will decline nearly 3% from 2022 to 2024 under this rule, which is completely detached from our experience as it relates to growth in our costs of care during this period. These proposed cuts for 2024, and any future additional temporary adjustments, will add measurably to our challenge to recruit and retain clinicians, and invest in the additional training and technology required to further improve patient outcomes and drive savings in Medicare. Home health reduces the need for high cost facility care. These cuts will actually increase total health care costs for Medicare. We urge CMS not to make decisions in silos.

— Ananth Mohan, chief operating officer, Elara Caring

The post ‘We Will Be Paying For This For Years’: 8 Home Health C-Suite Leaders Sound Off On ‘Alarming’ Medicare Cuts appeared first on Home Health Care News.

Nearly five months after the unveiling of the proposed payment rule caused a stir among home health stakeholders and advocates, the U.S. Centers for Medicare & Medicaid Services (CMS) released its final payment rule on Monday.

Back in June, CMS proposed a 4.2% aggregate decrease for 2023, a cut the industry at large felt would be devastating.

Though CMS will still usher in other cuts and permanent adjustments related to the rebalancing of the Patient-Driven Groupings Model (PDGM), the final rule comes with an increase in the aggregate by 0.7%, or $125 million, compared to 2022.

While many in the industry acknowledge that CMS has made efforts to address the concerns of providers, most are still stressing that the methodologies CMS is following will eventually crush operators and reduce access to care .

“CMS has rightly recognized the challenging operating environment providers are currently navigating and reduced payment cuts from the 7.69% proposed in June to the 4% announced today,” LeadingAge President and CEO Katie Smith Sloan said in a statement. “That, along with the 4% market basket update that addresses rising costs of providing services, indicate CMS is cognizant of current realities. We appreciate that — but at the same time, we remain concerned.”

CMS decided to take a phased-in approach to the PDGM behavioral adjustment and impose about a 3.5% adjustment for a 30-day period. This is an overall $635 million decrease in reimbursement for agencies. 

“Agencies need to understand that this is only half of what will be imposed after this year,” J’non Griffin, senior vice principal of coding and the OASIS department at SimiTree, told Home Health Care News in an email. “The remaining permanent adjustment, along with any other potential adjustments needed to the base payment rate to account for behavior change based on data analysis, which are all required by law, will be proposed in future rulemaking.”

In the wake of the proposed payment rule’s release, many took aim at the behavioral adjustment methodology CMS used. With the final rule out, it is still viewed as problematic.

“We still have serious concerns regarding the agency’s continued reliance on a flawed budget-neutrality methodology that produced the proposed rule and today’s result,” Amedisys Inc. (Nasdaq: AMED) said  in a statement.

Still, the company felt that slight progress had been made, especially when compared to the proposed rule.

“While not the ideal outcome, today’s release of the CY 2023 Home Health Final Rule is a welcomed improvement over what was proposed by CMS this summer in regard to the overall payment update for next year,” the organization said in its statement. “The unprecedented inflation we are experiencing across the country led to a 4.0% market basket update, the highest update we have seen for home health agencies. CMS’ decision to reduce the behavioral adjustment cuts calculated by half for CY 2023 is also helpful.”

Amedisys noted that mass volume of comments and continued advocacy efforts from providers, clinicians and industry trade associations likely played a role in the more positive improvements seen in the final rule.

The Partnership for Quality Home Healthcare (PQHH) likewise voiced its concerns. 

“This 7.85% cut is worse than initially proposed and when fully implemented in 2024, will result in an immediate decline in access to home health,” PQHH CEO Joanne Cunningham said in a statement. “This will have negative effects on the availability of care for the most chronically ill of the Medicare population and result in access to care problems. While this short-term phase-in blunts the immediate impact, the long-term consequences of this rule, unless mitigated, will devastate access to care in the home.”

Ultimately, providers will need to make major changes in order to survive in a challenging environment that includes other headwinds such as labor challenges, inflation and COVID-19. 

“Agencies are faced with tightening their belt, while still striving to maintain outcomes under HHVBP,” Griffin said. “It feels like, yet again, home health agencies are being asked to do more with less. Agencies will have to think of creative ways to stretch their dollar — possibly to outsource some services that traditionally have been housed internally, and utilize those staff members in other areas of the business.”

Griffin believes that providers should find ways to become “leaner” in their approach to business.

“Think of creative ways to look at RCM and ROI in house staff versus outsourcing, and the benefits of experts handling your OASIS,” she said. “While there is a cut now, we have to look ahead to HHVBP reimbursement and how that may be affected. Agencies should financially model what the rule means to them, and see the impact for themselves and how it affects their population.”

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Additionally, home and community-based services make up a big chunk of this spending. At $69.5 billion, these services are responsible for 24% of fee-for-service spending. Personal care was responsible for $12.6 billion, or 4.4%.

One major factor that contributed to spending growth for total Medicaid managed care was higher Medicaid enrollment due to the COVID-19 pandemic.

Overall, total Medicaid managed care spending spiked 16.9% in 2021. This is a reverse from a previous trend. Before 2020, the rate of growth had been decreasing since 2016. Since the COVID-19 pandemic, the rate of growth has been increasing.

When looking at the data on the state level, the report found that average managed care organization spending increased 17.6% in 2021 for the 44 states that contract with risked-based organizations.

At 63.3%, North Carolina saw the highest — on a percentage basis — year-over-year growth in Medicaid managed care spending. This bump was due to the implementation of its risk-based Medicaid managed care program.

Of the states that had more established programs, Colorado saw the fastest growth in 2021 at 59%. Nebraska was right behind Colorada at 55.6%.

In dollar terms, Illinois saw the biggest increase in Medicaid managed care year-over-year spending growth at $5.5 billion.

Some of the other states that saw major year-over-year spending increases, in dollar terms, are Texas at $5.2 billion, California at $5.2 billion and New York at $5.1 billion.

There were 13 states that didn’t utilize risk-based comprehensive Medicaid managed care in 2021. These were usually smaller states.

In total, Medicaid spending across these 13 states was $29.8 billion. These states include Alabama, Alaska, American Samoa, Connecticut, Guam, Maine, Montana, Northern Mariana Islands, Oklahoma, South Dakota, Vermont, Virgin Islands and Wyoming.

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The Centers for Medicare & Medicaid Services’s (CMS) Independence at Home demonstration aims to find out if delivering comprehensive, home-based primary care can lead to positive outcomes and lowered costs.

One demonstration participant, Northwell Health, has been able to realize this goal.

Broadly, the Independence at Home demonstration allows Medicare beneficiaries who have multiple chronic conditions to receive primary care services at home. The participating primary care practices that are able to meet CMS’ quality measures and generate Medicare savings are eligible to receive incentive payments.

The first performance period began back in 2012. In the first few years of its existence, the demonstration had a cap of 10,000 beneficiaries.

Since the demonstration began, it has been extended a couple of times. The most recent extension period began on Oct. 1, 2015. For now, the demonstration is slated to end Dec. 31, 2023, barring any Congressional action.

Overall, the demonstration has succeeded in some areas and has been slower to see results in other areas.

“In its first five years, the demonstration has been able to reduce emergency department visits and avoidable hospital admissions in some demonstration years, but total admissions in only one year,” a CMS spokesperson told Home Health Care News.

In terms of cost savings, sites have trended towards reductions in total spending, but the demo size and small number of participants have not been large enough to show significant savings, according to the spokesperson. 

“Coupled with the $37 million in incentive payments to Independence at Home sites, the demonstration has resulted in $44.3 million in losses to the Medicare program,” the spokesperson said. “In 2019, total incentive payments were $11.1 million distributed to 12 demonstration sites, serving an average of 580 enrollees per site. Independence at Home practice attrition in later years of the demonstration was in part motivated by the perceived onerous participation requirements.”

In its latest performance year, all 10 of the demonstration’s participants met three or more of the six quality measures; three of those practices met the performance thresholds for all six quality measures.

Northwell’s house calls program

Of the 10 Independence at Home demonstration participants, Northwell was one of the top performers. Northwell received $6.54 million for its house calls program’s ability to save costs and meet quality measures in 2020. 

Through Northwell’s house calls program, patients are offered a number of care services, such as in-person visits from doctors and clinicians, EKG heart rhythm checkups, vaccinations and more – all while remaining at home.

Northwell is a large integrated care delivery network — and the largest health system in New York. The organization employs 77,000 people and provides care across 22 hospitals. Northwell also has skilled nursing facilities (SNFs) and is a medical school, as well as research institute. 

Northwell’s house calls program focuses on patients that are at “the highest risk of the health pyramid,” Dr. Zenobia Brown, senior vice president and associate chief medical officer at Northwell, told HHCN.

“They are patients who you would categorize as having advanced illness,” she said. “They are not quite ready for hospice, so their prognosis is typically more than six months, more than a year. But they are also in this group, where they are having multiple hospitalizations and where they are spending more time in rehab.”

Currently, the house calls program has 600 participants. The average age for the program’s patient population is 86 years old. These patients typically stay in service for 18 months to two years.

Part of what Brown calls the house calls program’s “special sauce” is its utilization of community paramedics, which allows for paramedics to evaluate patients at home without transporting them to the hospital.

“Normally, you call 911, they come, and they have to transport you,” Brown said. “That’s all they can do, they can’t treat you there and leave. You’ve got to be transported. In this program, the paramedic is overseen by the provider remotely with telehealth. That then allows the paramedic to treat the patient with the same kind of drugs you’d find on an ambulance, often saving the patient a trip to the emergency room.”

For example, if a patient’s problem is dehydration, they are treated with IV fluids, according to Brown.

“Let’s not transport the patient to the emergency room where they then get delirious, and now you have to admit them because they’re deteriorating,” she said.

This component of the house calls program has aided Northwell’s success when it comes to hospitalization and emergency room visits.

The house calls program also has nurses covering the phones 24/7 to ensure that patients always have access to clinicians.

Though Northwell already had a house calls program in place, its participation in the demonstration allowed the organization to grow its program. It has been part of the demonstration since 2014.

“If you’re taking great care of patients, if they don’t end up in the hospital lots and lots of times, if they don’t end up needing to go to a rehab facility — you are benefiting from that,” Brown said. “You can then reinvest these dollars into just sustaining the fact that providers can’t see 20 patients a day, as well as wraparound services that benefit the patient.”

These wraparound services include things like social work, education and nurses entering the home to deliver care.

In general, it’s often difficult for house calls programs to be financially sustainable.

“In a traditional kind of model, you are billing Medicare, or the insurance company or the payer, for the number of times you see a patient — that’s how practices work,” Brown said. “That’s very hard to sustain with a house calls model, because you might spend an hour traveling to a patient and you can’t bill that time. Whereas, if I’m sitting in an office, I can see 20 patients a day. If I’m going to people’s homes, that number comes down to half of that, but the expense is still there.”

Ultimately, Brown believes that the house calls program has been successful because of its care delivery model.

“There’s a lot of detail in the program, but the heart of the matter is having a service where the patient is very engaged, where the provider and the patient have a strong relationship,” Brown said. “All of this relies on the patient and their family feeling like when they need help, it comes to them right away, whenever and wherever. That is the foundation of why any of this works.”

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During the national stakeholder call, CMS Administrator Chiquita Brooks-LaSure, CMS Chief Operating Officer Jon Blum and Deputy Administrator and Director of Center for Medicaid and CHIP Services Dan Tsai, among others, discussed Medicare program compliance, payment innovation and protecting the Medicare program for years to come.

“We really have tried, over the Biden-Harris Administration, to be really clear in saying what our objectives are,” Brooks-LaSure said. “It’s been a little over a year since we unveiled the six pillars, which really were meant to help guide our work.”

One of the ongoing priorities of CMS is expanded access to home- and community-based services — an initiative that began during the height of the COVID-19 pandemic.

Last year, as part of the $1.9 trillion American Rescue Plan, state Medicaid programs received a boost in funding for home- and community-based services. A provision in the COVID-19 relief package raised the federal matching rate for Medicaid home- and community-based services spending by 10 percentage points from April 1 of 2021 through March 31 of 2024.

This time period was extended last month, when the U.S. Department of Health and Human Services (HHS), through CMS, announced that states would have another year to use funding from the American Rescue Plan.

States that have plans to enhance home- and community-based services, using this funding, will now be able to do so until March 31 of 2025.

“The American Rescue Plan has given new opportunities to expand services and access to strengthen [the] home- and community-based service provider workforce — impacting social determinants of health and improving quality,” Brooks-LaSure said. “We’re seeing states across the nation use those dollars in ways to really make sure that people are getting care in the most appropriate settings.”

Aside from expanding access to home- and community-based services, CMS continues to keep its focus on health equity. Within home health and other post-acute care settings, there continues to be gaps in care among different patient populations.

“This has not been an easy time — we all know that,” Brooks-LaSure said. “But I continue to believe that it represents an opportunity for all of us to really drive health equity. By that we mean really ensuring that everyone in this country has a fair and just opportunity to really live their best lives, regardless of the characteristics that might define them when you look at each person, and by where they’re born in this country.”

On the compliance front, CMS is watching telehealth and telemedicine closely during the pandemic. Broadly, the utilization of telehealth and virtual care has been a vital care tool for providers.

Still, CMS is looking to crack down on “bad actors” operating with the telehealth space.

“CPI continues to combat Medicare and Medicaid fraud related to telehealth, telemedicine and COVID-related fraud,” Dara Corrigan, deputy administrator and director of the Center for Program Integrity, said during the call. “Over the past two-plus years, most providers and suppliers have worked tirelessly to react to the COVID-19 pandemic. But some bad actors have used this as an opportunity to take advantage of federal health programs and also to exploit the beneficiaries that we want to protect.”

Additionally, despite the recently announced three-month extension of the public health emergency, CMS is preparing for its eventual end by ensuring that states are prepared. CMS is also working to ensure that beneficiaries maintain coverage.

Plus, the agency is reviewing its Conditions of Participation regulations to promote more resilient health care systems, as well as determining which waivers to maintain, sunset and prepare re-issuances for.

“We take every extension of the public health emergency as an opportunity to ensure that we are better prepared, and better equipped, for its eventual end,” Ellen Montz, deputy administrator and director of the Center for Consumer Information and Insurance Oversight, said.

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