Less than a month before election day, the Democratic and Republican candidates for president are dueling over home-based care plans.

Vice President Kamala Harris announced on “The View” this week a proposal that would allow home care to be administered through traditional Medicare.

On the same day, former President Donald Trump and his campaign released a rebuttal, pointing toward home care-related policy implemented from 2017-2020, plus additional plans for a potential second term.

Harris’ proposal is a more lofty one. It would also – if implemented – create a massive tailwind for home care providers across the country. But, as LeadingAge President and CEO Katie Smith Sloan pointed out after the proposal, “we cannot overstate that without staff, there is no care.”

Trump, meanwhile, pointed to expanded supplemental benefits in Medicare Advantage (MA) as a way for seniors to access more home care-related services. His campaign team also focused on economic points that it believes will make aging in place easier for Americans under his leadership.

In this exclusive, members-only HHCN+ Update, I make the mistake of venturing into the presidential candidates’ plans for home-based care. Specifically, I examine how viable the plans are, and what they could mean for providers, if implemented.

Home-based care takes center stage

Home-based care providers were likely pulling their hair out over the predictable confusion that arose from Harris’ proposal Tuesday.

Home health care is already a robust benefit provided under the Medicare program, and generally includes services delivered to seniors after an acute health event.

Home care is not currently available under traditional Medicare, however, and generally includes non-medical services to help with activities of daily living.

The only place where home care is paid for under Medicare is through MA supplemental benefits, and MA pays for just a sliver of all home care provided currently.

So, yes, Harris’ proposal would be groundbreaking, if implemented. It would completely change the scope of the Medicare program.

As for the companies it would directly impact, pick a notable name in home care.

Currently, home care providers have a large addressable market: seniors with the ability to pay out of pocket for home care services; Medicaid beneficiaries in need of home- and community-based services (HCBS); veterans in need of home care, paid for through Veterans Affairs (VA); and a small portion of MA beneficiaries and long-term care insurance clients.

If home care were paid for by Medicare in the future, that would take the concept of “unlimited demand” to a new level. There are over 30,000 home care agencies in the country, almost all of which would have a new market opportunity if Medicare became another means to pay for home care.

The one potential downfall for providers would be former private-pay home care clients being able to use Medicare to pay for services. Private-pay home care doesn’t come without challenges, but it remains one of the most profitable forms of home-based care business.

Home health providers – which already provide care to Medicare beneficiaries, almost exclusively – would also see a business boon. Many of them already provide home care, and the ability to care for clients through one revenue source in both service lines would be massively beneficial.

After all, home-based care is responsible for one of the only successful Center for Medicare and Medicaid Innovation (CMMI) demonstrations of late. The Home Health Value-Based Purchasing (HHVBP) Model – now implemented nationwide – has already saved Medicare billions, and is likely to save many more billions moving forward.

“We think access to personal care services could at least double from six million customers today. By our estimate, the extra spending would expand the [total addressable market] by ~30% to $110 billion per year,” Macquarie Capital wrote in an analyst note this week. “Since Medicare covers home-based medical services, we expect a wider adoption of the integrated care model following added personal care services coverage. This could also expedite the transition to value-based care. Providers could benefit from aligned incentives, streamlined operations and cost synergies.”

Then comes the question of viability, however.

Harris is not the first person to propose such an idea. Home care stakeholders have suggested it for years, but so have other policymakers.

“When the Affordable Care Act was passed, a component similar to this was included and that ultimately was stripped out,” Tyler Giesting, a director of health care and life sciences at West Monroe, told me this week. “I think we’ve seen it fail in the past for reasons that come down to: can it be economically viable? The challenge would be getting something like this passed, in the way that it has been described so far.”

The Harris campaign has suggested that it would pay for the proposal, in part, by cutting Medicare payments for drugs. It estimated that the proposal would cost around $40 billion per year.

But other estimates suggest that it would cost closer to $400 billion.

Harris sees the proposal as a way to aid the “sandwich generation” – adults that have aging parents to take care of, as well as children. Those responsibilities make it tough to maintain employment.

For Harris, the key would be to convince the right stakeholders of the overall value of home care. It wouldn’t be enough to just prove that more Americans could continue contributing to the economy if they had additional help at home for their older relatives.

Harris’ team would need to instead pitch this as a long-term cost savings project. If more seniors had access to home care, less seniors would be driving up U.S. health care costs in hospitals, emergency rooms and more costly brick-and-mortar facilities.

That is already a battle home care providers face. They are regularly trying to convince payers that more home care equals less overall cost. But a concrete plan, and concrete evidence of those potential savings, would have to be laid out.

“It’s one thing to have this idealistic proposal perspective, and it’s another to actually put it into action with a detailed plan,” Giesting said. “Then, there’s also getting it passed and put into law.”

A detailed plan is key. Even if we accept the idea that more access to home care could ease burden on Americans, while also keeping overall health care costs down, the implementation of the proposal through Medicare would need to be tirelessly thought out.

For instance, New York’s Consumer Directed Personal Assistance Program (CDPAP) – which allows family members to be paid to care for loved ones in need of home care – has been a fiscal disaster for the state.

Self-directed care has potential. It allows unpaid caregivers to be compensated, and for home care recipients to direct their own care. But it’s also hard to oversee.

For what it’s worth, if the proposal did move forward, I think the best way to go about it would be to prioritize care from existing, quality home care agencies. Agencies that train and vet their caregivers, ones that have been providing care professionally for a long time.

Trump proposals

The Trump campaign’s home care proposals are more understated. And, like Harris’ plans, more details would be needed to project true impact – for potential home care beneficiaries and providers.

“President Trump will prioritize home care benefits by shifting resources back to at-home senior care, overturning disincentives that lead to care worker shortages and supporting unpaid family caregivers through tax credits and reduced red tape,” the Trump campaign wrote in a release, in preparation for Harris’ announcement this week.

The campaign also evoked MA supplemental benefits. MA supplemental benefits – through the primarily health related pathway and the Special Supplemental Benefits for the Chronically Ill (SSBCI) pathway – were created during Trump’s presidential term.

The benefit that allows for home care services is dubbed In-Home Support Services (IHSS). MA plans have pulled back on offering IHSS in 2024, however.

“The Trump administration provided new Medicare Advantage supplemental benefits that included modifications to help keep seniors safe in their homes, respite care for caregivers, transportation coverage, additional in-home support services and assistance and non-opioid pain management alternatives,” the release continued.

The campaign also pointed out other indirect factors that have led to home care inaccessibility of late, such as inflation, which it believes it can continue to bring down.

Spotlight and policy

Home-based care being in the nationwide spotlight is a good thing for providers and older Americans.

But it’s also worth taking stock of where that spotlight has gotten us before. The Biden-Administration has been laser-focused on home care, but mostly HCBS through Medicaid.

Meanwhile, home health providers have been left behind. Advocates are in the throes of a three-year long fight against continued rate cuts from the Centers for Medicare & Medicaid Services (CMS), as other home-based care proposals are taking shape from both campaigns.

Home health providers are seeing their traditional Medicare payments cut, while also receiving payments from MA plans that often don’t cover the cost of care. All the while, MA penetration continues.

In April of 2023, I wrote about why federal support for home-based care is missing the mark.

While proposals from both campaigns this week contain some good elements, that fact remains true.

As home-based care takes center stage once again, Medicare-certified home health providers are forced to stand behind the curtains, at a time when their margins are evaporating.

“I would also want to remind the Biden, Harris administration that the existing Medicare home health program is under assault currently, and has been since 2020, with billions of dollars in cuts that have diminished access to care, so I think that investment and a stabilization of the existing Medicare home health benefit is something that is also needed,” Partnership for Quality Home Healthcare CEO Joanne Cunningham told HHCN this week. “With this news, I would just offer that recommendation and reminder.”

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To rebalance the Patient-Driven Groupings Model (PDGM) and make it budget neutral, at least according to its internal methodology, CMS is proposing a permanent prospective adjustment to the CY 2025 home health payment rate of -4.067%.

For CY 2023 and CY 2024, CMS previously applied a 3.925% reduction and a 2.890% reduction, respectively.

“This adjustment accounts for differences between assumed behavior changes and actual behavior changes on estimated aggregate expenditures due to the CY 2020 implementation of the PDGM and the change to a 30-day unit of payment,” CMS wrote in a fact sheet on the proposed rule.

The CMS proposed rule includes a CY 2025 home health payment update of 2.5%, which is offset by an estimated 3.6% decrease related to the PDGM rebalancing and an estimated 0.6% decrease that reflects a proposed fixed dollar loss.

Overall, CMS estimates that Medicare payments to home health agencies in CY 2025 would decrease in the aggregate by 1.7%, or by about $280 million, compared to 2024 levels.

Continued cuts

Over the last few years, CMS has generally proposed large cuts, then finalized smaller cuts. But even when the cut is lowered between the proposed and final rule, providers lose out on those finalized cuts.

So, for instance, even a 1.7% cut may not appear very large. But an over 4% permanent cut is extremely significant.

Additionally, CMS also mentioned the clawbacks it intends to collect from the industry for perceived past overpayments. Those now sit at about $4.55 billion.

“The Administration has repeatedly expressed its support for care in the home, recognizing it as a high quality, lower cost alternative to institutional care settings that expands access to Medicare beneficiaries in the location in which they prefer to receive care: Their homes,” Stacey Smith, the vice president of public policy at AccentCare, said in a statement shared with Home Health Care News. “The home health community has repeatedly offered solutions to CMS that would reduce spending, while at the same time maintaining payment levels for those agencies that deliver high quality care and play by the rules. Yet CMS persists in its mathematical gymnastics that will give rise to nothing short of inferior health outcomes, lower patient satisfaction and stranding at-risk, older adults in higher cost, institutional care settings.”

Smith went on to describe the cuts as “draconian,” and called for Congressional action.

Home health access has been reduced and referral rejection rates have skyrocketed over the last few years, partly due to cuts. Providers have advocated against further cuts – and potential clawbacks – nonstop since CMS began revisiting the PDGM framework.

“For the third consecutive year, CMS has proposed cuts that make it significantly harder for home health providers to meet the care demands for an increasingly complex and aging patient population,” Partnership for Quality Home Healthcare CEO Joanne Cunningham said in a statement. “The status quo of continuous cuts is unsustainable: Medicare’s continued application of permanent cuts to home health further undermines a community that is facing historic labor costs and workforce shortages. We fear that CMS’s proposed actions for 2025 will have unintended consequences on older Americans who want to receive care at home.”

In addition to the cuts, CMS is also proposing: a recalibration of PDGM case-mix weights; updates to the Low-Utilization Payment Adjustment (LUPA) system, including an occupational therapy LUPA add-on factor; further delineations for the home health wage index; and more.

“Each of the 432 payment groups under the PDGM has an associated case-mix weight and LUPA threshold,” CMS explained. “CMS’ policy is to annually recalibrate the case-mix weights and LUPA thresholds using the most complete utilization data available at the time of rulemaking. In this proposed rule, CMS is proposing to recalibrate the case-mix weights – including the functional levels and comorbidity adjustment subgroups – and LUPA thresholds using CY 2023 data, to more accurately pay for the types of patients HHAs are serving.”

The association of nonprofit providers, LeadingAge, also pointed out the mounting staffing pressures that are materializing in home health care, due to payment cuts and other regulatory decisions. 

“As the only association that represents providers across multiple aging services care settings, we take a holistic view of proposed rules. Payment decreases, including this proposed 1.7% cut to home health providers, jeopardize older adults’ and families’ ability to access needed care and services,” LeadingAge CEO Katie Smith Sloan said in a statement. “Put today’s action from CMS into context: registered nurses are a core component of home health care. Our mission-driven and nonprofit members battle daily in a very competitive labor market to recruit and retain RNs, which are in short supply. Coupled with the Biden administration’s nursing home staffing rule’s nurse-onsite 24/7 component, already stiff competition for RNs will only grow. A payment decrease presents real challenges for our members. Without staff, there is no care; ultimately, older adults and families will suffer.”

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Most importantly, the bemoaned “80-20” provision has gone through as proposed, meaning providers will eventually be forced to direct 80% of reimbursement for home- and community-based services (HCBS) to caregiver wages. 

First proposed by the U.S. Centers for Medicare & Medicaid Services (CMS) in April 2023, the goal of the rule is to enhance access to HCBS for Medicaid beneficiaries. Allocating 80% of reimbursement for wages would help ensure better access, CMS believes, by raising wages for direct care workers.  

“The ‘Ensuring Access to Medicaid Services’ final rule, finalized today, will help improve access to home care services as well as improve the quality caregiving jobs through its new provisions for home care,” the White House wrote in a statement Monday. “Specifically, the rule will ensure adequate compensation for home care workers by requiring that at least 80% of Medicaid payments for home care services go to workers’ wages.”

During the public comment period and otherwise, providers have vehemently argued against the 80-20 provision.

A blanket rule that fails to take into account the different factors affecting HCBS in different markets across the country was – while well intended – a poor measure, according to some of the top home-based care leaders in the country.

Organizations like the National Association for Home Care & Hospice (NAHC) and LeadingAge immediately condemned the rule being finalized on Monday.

“We all agree that more needs to be done to support the direct care workforce; however, this policy will make things worse, not better,” NAHC President William A. Dombi said in a statement. “NAHC remains committed to overturning this devastating policy and instead advocating for more feasible and rational policies that address the root causes of low worker compensation.”

Prior to Monday, providers and advocates argued that small providers would be hurt most, but the White House claims that CMS will find ways around that. 

“This policy would also allow states to take into account the unique experiences that small home care providers and providers in rural areas face while ensuring their employees receive their fair share of Medicaid payments and continued training as well as the delivery of quality care,” the White House statement said.

Outside of the variance in Medicaid HCBS markets state by state, providers also believe the rule does not consider the other investments that they put into the workforce – such as training programs and assistive technology, among others.

“We know that CMS has good intentions and a desire to improve the lives of workers, but this policy is ill-advised and will have serious negative impacts on providers and their clients around the country,” Jennifer Sheets, co-chair of the NAHC Medicaid Advisory Council (MAC), also said in a statement.

Addus Homecare Corporation (Nasdaq: ADUS) – one of the largest providers of HCBS in the country – previously suggested that the 80-20 provision, if finalized as proposed, would force it to exit certain markets. 

NAHC echoed those sentiments on Monday, calling the 80-20 rule “misguided policy that will result in agency closures.” The policy will additionally “force providers to exit the Medicaid program” and “ultimately make access issues worse around the country,” NAHC warned.

HCBS providers have been preparing for the worst-case scenario since the rule was proposed last year, but were hoping for a percentage adjustment or a more holistic approach to the issue of caregiver wages.

“Access to care is a shared goal, and so is increasing compensation for our caregivers,” Care Advantage CEO Tim Hanold told Home Health Care News earlier this month. “I think we’re all aligned around that. The CMS rule started with good intentions, but certainly there’s going to be some unintended consequences if it comes out as written. Rate adequacy really continues to be the main driver for providing appropriate wages, and that is what I believe the administration should focus on to improve access to care.”

As of Monday afternoon, the final rule itself had not yet been released, though it is expected that providers will have four years to adjust to the new provision. 

LeadingAge President and CEO Katie Smith Sloan said that the 80-20 provision is not only ill-advised for providers’ sake, but also may not end up benefiting caregivers.

“On the Medicaid Access rule, the lack of infrastructure for collecting and reporting out accurate information, of financing to support added resource needs, and of data to ensure that the dollars are being distributed as intended, will decrease access to care,” she said. “What’s more, given these shortcomings, there is no guarantee that this rule will increase worker compensation.”

The 80-20 rule is just a part of the Medicaid Access rule. There are other provisions that would aim to help reduce HCBS waiting times for beneficiaries, add additional transparency around those waiting lists and enhance quality reporting.

But, for now, those provisions have taken a back seat.

“It is unfortunate that the final rule included a mandatory pass-through requirement,” David Totaro, the president and executive director of Bayada’s Hearts for Home Care and NAHC MAC’s co-chair, said in a statement. “There are so many positive and necessary changes in the regulation, so it is disappointing that this one provision will undermine all the good things about the rule.”

This is a developing story. Please revisit this homehealthcarenews.com later for additional updates and information.

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The Long-Term Care Workforce Support Act was introduced on Tuesday by Rep. Debbie Dingell (D-Mich.), along with Sens. Bob Casey (D-Penn.), Tim Kaine (D-Va.) and Tammy Baldwin (D-Wisc.).

The impetus behind the bill is the instability in the caregiver workforce, which is the result of high demand, but low wages.

The median annual income for direct care workers checks in at about $23,688.

Additionally, home care workers bring in a median annual income of $20,599, according to PHI.

The bill would provide new funding to support workers across assisted living facilities, nursing homes and home-based care.

“We have a crisis of caregiving in this country, and it’s a crisis that stems largely from a lack of support for and investment in our caregiving workforce,” Casey said in a press statement. “We cannot claim to be the greatest country in the world if we do not have the greatest caregiving in the world. We need to invest in these workers not just to ensure that caregiving can be a sustainable, lifelong career, but to improve the quality and availability of care for all who need it.”

The bill has a set of goals, which includes increasing the number of direct care professionals; improving compensation for direct care professionals; improving worker safety; improving access to care and much more.

In response to the legislation, LeadingAge has offered proposals to improve the Long-Term Care Workforce Support Act.

“If policymakers and other stakeholders are truly serious about addressing the chronic shortages that all care providers serving older adults – including our mission-driven, nonprofit members – are forced to navigate, bold, creative action on multiple fronts is needed,” Katie Smith Sloan, president and CEO of LeadingAge, said in a press release. “With the Long-Term Care Workforce Support Act, Senators Casey, Kaine, and Baldwin take a big step in the right direction. However, as experienced advocates with a rich history in helping to craft laws and regulations regarding the financing and delivery of long-term services and supports, we can say with confidence that the devil is truly in the details.”

Washington, D.C.-based LeadingAge is an association of more than 5,000 nonprofit aging services providers and organizations.

When it comes to strengthening the long-term care workforce, Sloan believes that policymakers should focus on funding for education and training initiatives, and investing in the infrastructure to build a substantial workforce.

LeadingAge also recommends that states create a plan that details how they plan to sustain higher caregiver wages after federal funding ends, that there be a dedicated funds to clearing waiting lists and more.

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According to an analysis done by the private investment banking company Stephens, rates are expected to remain virtually unchanged, with a slight decrease of 0.16%. This marks the second consecutive year of a cut to real “core” MA rates.

Although expected, the news worried some post-acute stakeholders who believe plans will pass cost concerns down onto providers.

“These inadequate rates paid by the MA plans destabilize the financial health of provider organizations more broadly,” LeadingAge President and CEO Katie Smith Sloan said in a statement shared with Home Health Care News. “Policymakers must act before we find few providers remaining to serve the more than 65 million Medicare beneficiaries, including the nearly 33 million who now receive their Medicare benefits via an MA plan.”

Under the new guidance, payments from the government to MA plans are expected to increase, on average, by 3.7% — or over $16 billion — from 2024 to 2025.

In previous years, CMS has bumped up the rate by 3.32% for 2024 and 8.5% in 2023.

“The finalized policies in the rate announcement will make improvements to keep Medicare Advantage payments up-to-date and accurate, lower prescription drug costs and ensure that people with Medicare have access to robust and affordable health care options,” CMS Administrator Chiquita Brooks-LaSure said in a statement.

The federal government is projected to pay between $500 and $600 billion to private health plans in 2025.

The final core 2025 rate update is well below expectations, Scott Fidel, an analyst with Stephens, wrote in the report.

As a result, Stephens projects the potential for slower enrollment growth for the MA industry in 2025 as MA plans look to adjust member premiums and benefits to preserve margins.

“Bottom line, we see the final core 2025 MA rate update of -0.16% as reflecting a ‘highly adverse’ outcome for the industry, inclusive of the additional industry headwind of higher utilization trends currently observed,” Stephens wrote in its report. “The final 2025 rates largely reflect a continuation of the negative CMS rate cycle — now denoted as ’Year 2’ — of a much more constrained annual MA reimbursement trend as compared to the significantly more favorable rate outcomes in 2022 and 2023.”

Generally, home health agencies have expressed dissatisfaction with payment rates and reimbursement policies set by managed care companies.

For that reason, health care firms like ATI Advisory have encouraged providers to develop a value-based care strategy as a way to minimize the dependency on MCOs and other private payers.

“You don’t want a managed care strategy, you want a value-based care strategy,” Anne Tumlinson, founder and CEO of ATI Advisory, said during Aging Media Network’s Continuum conference. “Managed care is just a financial tool. But to move from delivering units of service to delivering value is really, really difficult. Changing what it is that you sell and how you get paid to do it is a huge undertaking.”

In her statement, Sloan mentioned the group of 46 U.S. House Representatives who sent a letter to CMS arguing the rate adjustments would result in a reduction to MA insurers’ reimbursement in 2025.

“Given the record of success, it is baffling that CMS has proposed a nearly 0.2% cut to the Medicare Advantage insurer reimbursement rate for 2025,” lawmakers wrote in March. “Insurers are already signaling that plan benefits may be cut, which will undermine the program and hurt seniors. These consecutive cuts raise questions about the future viability of the robust choices and options available to seniors in MA. Without necessary support, these options will wither and seniors will be left with fewer benefits, less access to affordable coverage and higher out-of-pocket costs.”

In MedPAC’s status report from January, it was found that CMS pays about 20% more for Medicare coverage provided to beneficiaries through MA plans compared to fee-for-service Medicare.

“Plans are viewing this as a cut,” Mollie Gurian, vice president of home-based and HCBS policy at LeadingAge, told HHCN in an email. “We are concerned that this perspective will trickle down and negatively impact our mission-driven, nonprofit home health members. If MA plans feel financially squeezed, they may cut rates paid to providers. Home health agencies already report inadequate reimbursement from Medicare Advantage plans so any downward pressure on rates is only going to put more strain on our members.”

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Too often, though, this dual status comes with frustrating challenges around care plans and coordination. Legislation introduced in the U.S. Senate on Thursday hopes to reduce some of those frustrations while also creating new opportunities for the Program of All-Inclusive Care for the Elderly (PACE) model.

The bipartisan bill – known as the Delivering United Access to Lifesaving Services (DUALS) Act of 2024 – was introduced by Sens. Bill Cassidy (R-La.), Tom Carper (D-Del.), John Cornyn (R-Texas), Mark Warner (D-Va.), Tim Scott (R-S.C.) and Bob Menendez (D-N.J.).

Several senior care groups have backed the legislation, including Welbe Health, the National PACE Association and PointClickCare, among others. LeadingAge has likewise endorsed the DUALS Act.

“The DUALS Act of 2024 addresses some of the challenges and opportunities facing America as our population ages,” Katie Smith Sloan, president and CEO of LeadingAge, said in a statement shared with Home Health Care News. “For too many older adults, particularly those with low incomes and multiple, chronic health conditions, accessing care and services through Medicare and Medicaid is a fraught endeavor that ends in frustration and – worse yet – inadequate results.”

More than 12 million individuals are currently considered “dual eligibles,” or “duals,” according to a brief on the newly introduced legislation.

In Medicare, duals make up about 19% of all enrollment, but they account for 34% of total spending. In Medicaid, duals account 30% of spending and 14% of enrollment.

Among its provisions, the DUALS Act would require each state to select, develop and implement a comprehensive, integrated health plan for dual-eligible beneficiaries, building off of existing coverage options or creating a new system entirely. These efforts would come with support from the U.S. Centers for Medicare & Medicaid Services (CMS).

The bill also seeks to require plans to develop and update care coordination plans while establishing a care coordinator for each dual-eligible beneficiary.

Compared to the broader Medicare population, there is a greater share of dual-eligible individuals in home health care. That’s true for both fee-for-service and Medicare Advantage (MA), according to the Research Institute for Home Care.

As of 2021, more than 22% of fee-for-service home health users were duals. Meanwhile, more than 30% of MA home health users were duals.

“This legislation is a start at redesigning our current patchwork approach of delivering long-term services and supports,” Sloan continued.

As for the PACE model, the DUALS Act would take the major step of requiring every state to allow for the establishment of PACE programs. Red tape and restrictions in many states has been a roadblock to PACE expansion for years, despite several studies and statistics demonstrating the cost-savings ability and effectiveness of the model.

The legislation would also allow individuals to enroll in PACE at any point in time and expand PACE eligibility to those under the age of 55.

Currently, there are only 156 PACE organizations operating in 32 states and the District of Columbia.

“The National PACE Association applauds the visionary leadership demonstrated in seeking to increase care integration for individuals covered by both Medicare and Medicaid, which will improve both their health status and quality of life,” Shawn Bloom, president and CEO of the organization, told HHCN in an email. “NPA in particular commends the embrace of the critical role that [PACE] will have in achieving those aims for older adults and those living with disabilities.”

The DUALS Act faces an uphill battle in Congress, and Sen. Cassidy acknowledged in a conversation with health policy podcast Tradeoffs that the bill faces difficult odds of passing this session.

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The Centers for Medicare & Medicaid Services’ (CMS) nursing home staffing proposal has been a dark cloud over the industry. Some believe it could spell trouble for home health care as well.

In September, CMS released a proposal that would require nursing homes to implement a minimum staffing standard, if finalized. The proposal introduces a variety of provisions, but the one that has received the most spotlight is the requirement that nursing home facilities have enough staff to provide residents with at least 0.55 hours of registered nurse (RN) care, and 2.45 hours of nurse aide care, on a daily basis.

Additionally, the proposal calls for nursing homes to have an on-site RN available for residents, 24 hours per day and 7 days per week.

If the proposal is finalized, these requirements will be phased in over the next few years.

In general, nursing home industry stakeholders have pushed back against CMS’ proposal.

“We share the administration’s goal of ensuring access to quality nursing home care,” LeadingAge wrote in a press statement in September. “This proposed rule works against that shared goal. One-size-fits-all staffing ratios don’t guarantee quality, as the administration’s own Abt research findings made clear. That aside, it’s meaningless to mandate staffing levels that cannot be met. There are simply no people to hire – especially nurses. The proposed rule requires that nursing homes hire additional staff. But where are they coming from?”

LeadingAge noted that the proposal would mean that nursing homes will need to hire an estimated 13,000 RNs during the first 2-5 years in order to keep pace with the requirements from CMS.

That said, nursing home stakeholders and industry advocates aren’t the only ones with concerns.

Those on the home health care side are concerned that in this era of staffing shortages, particularly nursing, these requirements could draw nurses away from their sector.

“It’s an acute shortage in home health care for a number of reasons, including the stress coming from the payment rate cuts under the Medicare home health benefit,” William A. Dombi, president of the National Association for Home Care & Hospice (NAHC), told Home Health Care News. “Increasing the demand in other sectors would add to that stress. That’s not to offer the opinion that the staffing ratio is a wrong thing to do. Instead I’m saying, if the nursing homes are going to be using more nurses, that means less available to deliver care in the home.”

Oftentimes, home health providers are recruiting from the same talent pool as the rest of the health care sector at large.

Aside from the staffing challenges this could create for home health providers, industry stakeholders are also wondering if home health will see similar mandates from CMS in the future.

One state is already considering a staffing ratio relative to home health care services as part of its licensing requirements, according to Dombi.

Still, Dombi doesn’t believe that a staffing mandate is a move that CMS should pursue for home health providers.

“We certainly don’t believe that CMS would be making the right move in requiring agencies to offer home health aide services, but instead should continue to focus on a long standing condition of participation, which is that patients are accepted only if the home health agency determines they can safely and effectively meet the patient needs,” he said.

Dombi also pointed out that the ability to control patient volume through that condition of participation makes the need for a staffing mandate less likely.

“I don’t think a staffing ratio is a good fit, given the way home health operates, compared to the way nursing homes are required to operate,” he said.

While home health providers are waiting to see if staffing mandates will be finalized for nursing homes, there are some ways they can prepare for the potential fallout.

“[Providers] should be thinking strategically around performing a workforce analysis in their local communities,” Felicia Sadler, vice president of quality at the analytics, assessments and education firm Relias, told HHCN. “They should be identifying where the resources are, and partnering with nursing schools locally to begin enhancing and building that workforce. If this rule does come forward, there’s a transition time that’s allowed for them to meet the requirements. Thinking about all of this now, and planning forward, is critically important.”

Dombi stressed the importance of retention as a response to future headwinds stemming from the mandate being finalized.

“You don’t want to lose your staffing resources,” he said. “We know that home health agencies, and hospices, are paying attention to that, but sometimes you have to redouble your efforts when there’s a greater threat. Retention has many facets to it. Compensation is one of them, but so is emphasizing flexibility and the respect factor for the workforce that they do have.”

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“The reality of the funding aspect of Medicaid does not make it easy to run a business and to serve all the people that need to be served,” Mollie Gurian, VP of home-based and HCBS policy at LeadingAge, said at the organization’s annual conference in Chicago on Monday. “There have been some victories in this area and some of our state partners have made really big gains in advocating for increased financing for Medicaid programs — especially money that has flowed into states through the American Rescue Plan.”

When it comes to policy, Gurian believes a more full-picture approach needs to be taken by health care regulators and stakeholders.

“People who are surviving on Medicaid dollars are going to be challenged to compete with hospitals and even others in our own continuum,” Gurian said. “From a LeadingAge perspective, there’s also sort of a lack of focus on the continuum and big picture for long-term care and how we need all the pieces to fit together from a policy perspective. Policies you make in one area are ultimately going to trickle down and affect policies in other areas.”

Issues with CMS proposed rules

In order to make some of the improvements to the HCBS landscape, LeadingAge believes the U.S. Centers for Medicare & Medicaid Services (CMS) needs to be doing its part.

For instance, in a recent proposed rule from CMS — which would require at least 80% of Medicaid reimbursement for home- and community-based services go toward worker compensation — the agency also proposed that states revamp their stakeholder groups and make sweeping changes to the way agencies document incident management reports.

While several of the proposals are seen as positive, others could potentially have adverse effects on HCBS providers.

“I used to work for a state Medicaid agency and, obviously, each state, their engagement and the way they take feedback from their stakeholder groups is a bit different,” Georgia Goodman, director of Medicaid at LeadingAge, said. “It’s a really onerous process for states to administer these stakeholder groups. I’m not saying they shouldn’t administer them. I’m saying making meaningful changes to how they administer them doesn’t come necessarily from a regulatory framework. It comes from a theoretical framework.”

Instead, CMS should be encouraging states to commit to hearing feedback from stakeholders, collecting that feedback and acting on that feedback appropriately.

“When thinking about who’s actually on those stakeholder groups and making wholesale changes to those groups, that may not result in the changes that CMS was actually seeking,” Goodman said.

CMS has also made it a point to make sure beneficiaries have their voices heard in terms of how they receive HCBS care. Goodman and her colleagues share that sentiment, but CMS didn’t give the same space for providers.

“Beneficiaries should absolutely have a voice, but providers are an integral piece of this puzzle,” Goodman said. “In managed care, many providers don’t have a voice. State Medicaid agencies regularly say, that through the managed care contracting process, there’s an opportunity for providers to demonstrate their value and to push back against onerous requirements. But in reality, we know that’s not necessarily the truth.”

Managed care companies, for instance, will often find a way to meet network adequacy requirements without penetrating into the community, bypassing the need to get feedback or input from larger providers, Goodman explained.

In order to make it more of a fair deal for providers, LeadingAge is advocating for more providers when managed care companies contract with HCBS providers.

If there are large provider organizations in a certain market that a managed care company can contract with, they can meet those network adequacy requirements without really working with other providers.

Legislative updates

In terms of the 80/20 rule, the main takeaway LeadingAge had was that the quality of care is not solely driven by direct care staff compensation.

There are several other factors like training, clinical supervisory oversight, personal protective equipment, transportation and many others that go into providing quality HCBS care.

“We believe CMS was pushing this as a mechanism in hopes that states would respond by increasing provider rates,” Goodman said. “But, as you all know, there’s no control from CMS to actually influence those provider rates as that’s a fully legislative process.”

Looking ahead, Goodman felt optimistic that members of Congress — particularly members of the House Committee on Energy and Commerce — understand the current worries from the HCBS industry.

In late October, the committee held a hearing on supporting access to Long-Term Services and Supports (LTSS).

“Everyone, including us, expressed a lot of support for the direct care workforce and how they need more money, but this is not the policy to do it,” Goodman said. “It did seem like, in a heavily Republican but still bipartisan way, there was a lot of understanding about that. I think that we have a lot of support in Congress if CMS were to go forward with the rule to advocate against that being finalized.”

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In anticipation, home health providers and advocates have been appealing to Congress, educating, calling to action on social media and more.

All of these efforts are the final push from an industry that has been very vocal about its opposition to the proposed rule, which was released in June.

Home Health Care News recently caught up with many of those providers and advocates to learn more about what they’ve been doing to push for a more favorable final rule.

At this point we are focused on a combination of the White House and Congress, pushing for a pause of the proposed rate cut in 2024. Congressional allies are working on our behalf in that respect. We are also hedging our bets by setting up for a congressional effort to stop the cut during the budget process. We need all hands on deck, particularly with home health agency staff contacting their local congressional delegation.

— William A. Dombi, president of the National Association for Home Care & Hospice

***

With the final rule quickly approaching, Bayada Home Health Care has been all hands on deck, diligently mobilizing our employees and advocates to make sure congressional members hear our voices. In conjunction with PQHH and NAHC’s industry-wide efforts, advocates have called and emailed federal lawmakers and published op-eds to urge lawmakers to support the Preserving Access to Home Health Act. Additionally, Hearts for Home Care – Bayada’s 501 (c)4 advocacy arm – has been active online and in-person, posting on social media and traveling to Washington, D.C., to further enforce our message that congressional action is needed to stop CMS’ proposed Medicare cuts. From our positive conversations with members, we are hopeful that our efforts have been recognized and have helped to move the needle forward on behalf of the entire home health care community.

— David J. Totaro, chief government affairs officer at Bayada Home Health Care

***

Last year’s home health payment reduction forced many providers to make difficult decisions, from reducing service area to letting go of staff, in order to keep their organizations afloat. Should this year’s proposed 2.2% cut to home health payment be finalized, providers will need to brace for the same impact in 2024. We urge CMS to postpone cuts for this year while we continue work on avenues for permanent relief.

For instance, we see opportunities in ensuring that the Home Health Value-Based Purchasing (HHVBP) Model focuses on the right measures of care. We have also seen an interest from Congress in holding Medicare Advantage plans accountable, which is increasingly important both for providers and the system as a whole as more home health episodes occur in Medicare Advantage. Plans must cover the true cost of service.

We’re already working with members of Congress to begin rethinking how the home health benefit should work. We know it’s on their minds too, as evidenced by the Senate Finance Committee hearing last month and the introduction of the Preserving Access to Home Health Act of 2023, which we support. There’s incredible support for these services, but CMS says its hands are tied on the payment methodology. Change is needed to best support beneficiaries who need these services the most, specifically those in rural and underserved areas. We believe that developing payments to support providers serving these communities will be invaluable. We are also looking into how to better track actual access to home health services. MedPAC’s current definition of access is failing millions of Americans. It’s time to rethink what true access means in terms of choice, in terms of services, and in terms of location.

— Mollie Gurian, vice president of home-based and HCBS policy at LeadingAge

***

In anticipation of the final rule, the Partnership and our members are using every tool in our toolbox to influence the outcome of the HHPPS for 2024. We are meeting with – and reaching out to – administration officials at the White House, HHS, CMS, and OMB. We are coordinating with our champions in Congress to put pressure on the Biden Administration. We have broadly activated our grassroots army to ask Congress to use its muscle in stopping the proposed cuts. We’re working with NAHC this week to beef up the conversation on social media among our advocates and working with our state association partners to elevate the issue on the local level. It’s critical that all home health stakeholders use their voice right now to speak out about how these cuts will harm patient care.

Once the rule is finalized, the Partnership will be evaluating its impact on access to care for the Medicare population and how it impacts ensuring that providers can meet the high demand for home health services which has been diminishing under the weight of the cuts. I encourage all of us to carefully analyze the final rule to determine whether CMS has taken any action to eliminate or significantly mitigate the deep cuts that have been proposed. Home health has already been cut by billions since 2020 and the market basket has been woefully inadequate to cover the costs of inflation. We, and the entire provider community of caregivers, are ready to intensify our efforts to seek a permanent legislative solution to stabilize home health and protect access to care for the most vulnerable of the Medicare population. The future of the home health program depends on these efforts.

— Joanne Cunningham, CEO of the Partnership for Quality Home Healthcare

***

We are engaged in a multi-faceted approach to minimize an unfavorable home health final payment rule. We are leveraging our extensive network and resources to layer advocacy action from grassroots to grasstops, engaging not only our 1,000 employees, but also leading on education and technology tools for the industry. By equipping providers with the necessary knowledge and tools, we are helping them prepare for every outcome.

In addition, Axxess is committed to the industry’s viability and the accessibility of home-based care for everyone. We are leveraging our political action committee, the Axxess PAC, to support the united voice and work of our national associations, ensuring that our advocacy efforts are amplified and impactful.

For providers preparing for the possibility of an unfavorable final rule, we recommend staying informed and engaged. By joining forces with industry associations and leveraging resources like the Axxess PAC, providers can collectively work toward influencing positive change and protecting the interests of the home health community.

— Deborah Hoyt, senior vice president of public policy at Axxess

***

Between now and the issuance of the final rule, Enhabit Home Health & Hospice (NYSE: EHAB) is focused on bringing as much attention as possible to what we know is true: patient access to home health care is being impacted by Medicare’s continued cuts.

In August, our public comment letter and those of many others highlighted to CMS what the impact will mean for patients and providers; then in September, home health experts testified to Congress about the same; and here in October, we are working to focus the attention of the Biden Administration on what will happen if CMS moves forward with its proposal to further cut the Medicare home health benefit. Our elected officials need to be aware of the impacts of the CMS proposal given the priorities around health equity, increasing access to high-quality care and avoiding cuts to Medicare. And importantly, administration officials should know that CMS has the discretion under existing authority to move away from the agency’s proposal.

On top of these efforts, there are also many incredible people from all over the country – many of whom work in home health and understand the importance of this moment – that are taking the time to call Capitol Hill, write a letter to a member of Congress, or even author an op-ed in a local paper, all in a community-wide effort to let our government know that these proposed cuts should not be finalized.

In terms of preparation for the final rule, our local leaders remain focused on managing their resources to continue to deliver our high quality of care in the most efficient manner.

— Andrew Baird, vice president of government affairs & policy counsel at Enhabit Inc.

***

Home health is the foundation of home-based care. The long-standing benefit has opened the door to broader thinking about what’s possible at home. Innovation like hospital-at-home, SNF at home, or home-based services like home dialysis or home infusion would not be possible without the underpinning home health provides.

As we look to a future where seniors are aging in place and higher acuity services are offered at home, we cannot allow this foundation to erode. While the reimbursement structures differ, new care models rely on the precedent and groundwork set by the home health benefit. As providers look toward the possibility of an unfavorable rule, it’s important to share data, patient stories and paint the picture of the detrimental effects of further cuts to this valuable benefit.

— Krista Drobac, founder of Moving Health Home

The post The Last-Ditch Efforts Home Health Providers, Advocates Are Making To Nix Payment Cuts appeared first on Home Health Care News.

Chief among their concerns was the impact that the rule – if finalized in its current form – would have on patients’ ability to access care, especially at a time when providers are already facing staffing shortages and rising supply costs.

Many of the organizations leveraged data to illustrate the ways providers already struggle to meet the demand for care seen across the country.

Others detailed specific actions that it urged CMS to take in order to prevent dire circumstances for providers and patients alike.

Home Health Care News highlighted standout statements from six organizations’ comment letters to CMS.

***

CMS understands [home health agencies], like all health services providers, will reduce costs in reaction to payment reductions. Cost reductions often can include service reductions involving the admission of patients, the scope of services offered, and the extent of services provided. Correspondingly, the CMS budget neutrality methodology will trigger further payment rate reductions that will eventually destroy the value of the home health services benefit. CMS has the authority and the responsibility to prevent such an outcome under 42 USC 1395fff to determine the “time and manner” of applying any rate adjustments under PDGM. CMS has the full discretionary power to go forward with the 2024 rate setting without the proposed 5.653% rate cut.

— National Association for Home Care & Hospice

***

Access to home health is already diminished. If CMS cuts payments further as proposed for 2024, access will be decimated.

CMS already recognizes the clear connection between access to care and payment rate reduction. In a recent proposed rule advanced by the Biden Administration to improve access to Medicaid services, including access to home- and community-based services (HCBS), CMS discusses the need for analysis when states engage in ‘rate reductions or payment restructurings’ in order to avoid hindering access to care.

CMS emphasizes the need for state Medicaid agencies to conduct further analysis regarding the sufficiency of proposed payment rates after reduction or restructuring in order to avoid reducing access to care. Given the tenuous state of access to home health under current levels, CMS should proceed with caution in moving forward with further Medicare payment rate reductions, consistent with its proposed policy regarding Medicaid rate-setting.

— The Partnership for Quality Home Healthcare

***

We commend the Biden Administration, from the early days of the campaign, for taking a strong stand on ensuring quality in long-term care services and particularly for promoting services

in home and community settings. However, the articulation of this vision is impeded by the Administration’s proposed 2.2% cut to home health services in this proposed rule. If implemented, CMS will have cut home health payment permanently by nearly 10% in two years (-9.356%). As we detail below, these cuts are coming at times when our members’ costs and demand for services are rising and cannot be met. Continuing to implement these cuts will have a devastating effect on older adults who rely on these services.

Further, it runs counter to the Administration’s stated goals of promoting equity and the use of home- and community-based care. From our vantage point, the combined impact of the proposed payment changes and current workforce and inflationary pressures would lead to waves of closures and the inability of providers that remain to take on new referrals.

The impact of CMS’ proposals stands in stark contrast to the Administration’s stance on the importance of long-term care.

— LeadingAge

***

We urge the agency to adequately resource [home health] providers as they are a critical part of the care continuum. We are particularly concerned about the substantial size of the agency’s proposed budget neutrality adjustment, a cut of 5.653%, and again call on CMS to withdraw it.

Instead, we urge the agency to revise its methodology to more accurately account for changes in care delivery and payment dynamics due to the implementation of the PDGM. We also have concerns about the inadequacy of the proposed market basket update given the financial pressures facing [home health] agencies, including critical staffing shortages and rising supply costs. In addition, final data from CYs 2021 and 2022 indicate that the market basket forecasts underpaid [home health] agencies by a combined 5.1% for these years. This, combined with the difficult inflationary environment and the large budget neutrality adjustment proposed in this rule, risks putting [home health] agencies in serious financial peril. As such, we urge CMS to utilize its authority to provide a market basket adjustment to account for these extraordinary circumstances.

— American Hospital Association

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In addition to the impact of the proposed rule on home health providers and, therefore, Medicare beneficiaries, it is important to note the downstream consequences for overall Medicare spending. While there is an increasing demand for home health — a 33% increase in referrals sent to home health — home health acceptance rates have decreased by 15% as [home health agencies] have been forced to turn beneficiaries away due to labor costs and staffing shortages. Additional reductions in reimbursement to home health providers will further exacerbate these pressures and result in fewer home health options, as demand for skilled healthcare in the home grows.

Fewer home health options translate into an increase in unnecessary hospitalizations and referrals to higher cost care settings. We already saw these trends prior to the COVID-19 pandemic when Medicare beneficiaries were often more likely to be referred to other post-acute care settings. In addition, hospital discharge planners are having difficulty finding home health providers for beneficiaries, which is leading to increases in average inpatient hospital lengths of stay. For patients discharged to home health, hospital average length of stay increased 11% from 2019 to 2022. Should the home health provider market constrict further, Medicare costs are at risk of increasing, an unintended consequence of the proposed rule.

— WellSky

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As of July 2023, patient referral conversions — a measure of the number of patients that were referred to home health and subsequently admitted — have now plummeted to 55%. This means that 45% of all patients seeking home health are being turned away from service, which extrapolates to 6.2 million patients being turned away annually.

Access-to-care issues are extremely frustrating for these 6.2 million annual patients denied home health services, and they may ultimately experience worse health outcomes and overall spending in the Medicare program. Home health is a low-cost, high-value service option when compared to alternatives, such as longer acute stays or placement at skilled nursing facilities or other long-term care facilities. A portion of these 6.2 million patients turned away from care end up in those higher cost alternatives, where, in addition to increasing Medicare spending, they also occupy beds and utilize clinical resources that are in short supply.

The decade-long trend around access to home health care is also very alarming. A decade ago, referral conversions, patients accepted into service after being referred to home health, stood at 79%. This number declined to 69% in 2019, which was the last full year before PDGM, and before the public health emergency started due to the COVID pandemic. Since the start of

2020, referral conversions have fallen from 69% to 55%, a staggering drop in less than four years. The timing of this access to care trend correlates with the CMS payment rate adjustments. The cause of this correlation is a shortage of home health clinicians, creating a situation where home health agencies simply do not have the clinical capacity to admit millions of patients needing home health services. A significant factor in this deficit of home health clinicians is the Medicare annual payment updates that have not kept up with inflation.

— Homecare Homebase

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It behooves CMS to provide financial predictability to this sector in order for it to
accept an increased number of patient referrals from high-cost institutions, and
deliver patient-preferred, low-cost, high-quality care in the home.

As a technology company that processes millions of claims, Axxess has witnessed
the home health claims payer mix shift from traditional Medicare to Medicare Advantage (MA). While Medicare margins have historically been favorable for home health, the increase in Medicare Advantage cases to more than 50% has quickly reduced overall home health agency margins due to inadequate MA
reimbursement. [Home health agencies] must subsidize their MA case losses with traditional Medicare margins to remain financially viable, accept referrals and support CMS’ desire to shift more healthcare into the home setting.

Ongoing reimbursement cuts to Medicare [home health agencies] to drive down Medicare margins is shortsighted. [Home health agencies] have no leverage with MA and Medicaid to negotiate better payment rates. CMS must consider the overall [home health agency] payer mix when proposing payment adjustments, particularly inadequate reimbursement by MA and Medicaid. In 2023, [home health agencies] are experiencing a greater percentage of cases with zero or negative margins. The proposed Medicare cuts to address profit margins solely under Medicare without a more wholistic view of the payer landscape that CMS oversees, will topple the provider community. Further, limited financial resources reduce the ability for [home health agencies] to invest in measures that achieve success in CMS’ Home Health Value-Based Purchasing (HHVBP) model.

— Axxess

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