The news comes just two days after the home health proposed payment rule was released, which included significant cuts for the third straight year.

Broadly, moving away from the Chevron precedent – usually known as the Chevron doctrine – will mean less regulatory power for government agencies. Government agencies often take their own interpretations of certain laws and statutes, and then act upon those interpretations. Moving forward, it’s likely that these agencies will need more explicit direction from Congress to regulate on firm standing.

The reaction to the Supreme Court decision has mostly been centered around issues like the environment and reproductive rights.

But the decision could also be the breakthrough that home health providers needed to stop – and potentially undo – payment cuts. This week, CMS proposed a 1.7%, or $280 million, decrease to aggregate home health payments for 2025. The final rule is expected in late October or early November.

The National Association for Home Care & Hospice (NAHC) already filed a lawsuit against the U.S. Department of Health & Human Services (HHS) and CMS over rate cuts in 2023.

“In our own analysis, we believe that providers of home health have been underpaid as it relates to budget neutrality,” NAHC President William A. Dombi said when the lawsuit was filed. “At minimum, we would expect to see the rate cuts from 2023, that were permanent readjustments to the base rate, and the one proposed for 2024, along with the temporary adjustments … to go away. The end product of that is that we would have a stable system to deliver home health services to Medicare beneficiaries.”

NAHC has now re-filed that lawsuit, after it was initially dismissed by a federal court.

Even before Chevron was officially overturned, there was evidence to suggest that the Supreme Court was moving away from its line of thinking. The first was in West Virginia v. Environmental Protection Agency (EPA), where the court undercut the EPA’s power in restricting carbon dioxide emissions.

In a health care context, it showed up in American Hospital Association v. Becerra, which was similar to the current NAHC lawsuit.

Like West Virginia v. EPA, the AHA v. Becerra case went the opposite direction of the Chevron precedent.

Prior to 2020, CMS proposed a series of policy changes for hospitals, one of which would have reduced payment, specifically through the 340B drug pricing program. For context, 340B hospitals are generally those that serve lower-income or rural populations.

The 340B cuts represented at least $1.6 billion in lost revenue annually for hospitals.

Like NAHC will with home health cuts, the AHA argued those cuts would hurt patient care, and that CMS did not have the power to levy those cuts in the first place.

In 2022, the Supreme Court ruled unanimously against HHS and CMS in that case. It was later ruled, too, that CMS pay hospitals back for the underpayments, with interest.

“The Supreme Court basically said the law requires certain actions to be taken by CMS in setting the hospital rates as it relates to the 340B, and they had two ways to go. And CMS chose not to go those two ways,” Dombi told HHCN in 2022. “What we’ve got going on in the home health payment rule is a comparable legal argument that starts with the position that the law does not allow CMS to do what it did do on the budget neutrality methodology. And second, that the law requires a specific set of actions, none of which the CMS methodology complies with.”

Home health advocates have lobbied against CMS cuts through public comments during the time between the proposed and final rules. They’ve provided data and storytelling to do so. They’ve also successfully lobbied lawmakers to introduce the Preserving Access to Home Health Act in both the Senate and the House, but that legislation hasn’t moved forward in past years.

A lawsuit was not the desired outcome for NAHC, but one of its last options. Now, that lawsuit may have more wind behind its sails.

“It improves the chances of success for our lawsuit going forward,” Dombi told HHCN Friday, regarding the Chevron decision. “It also means Congress is going to have to offer more detail in its legislative language, leaving less to the administrative agency to bring in interpretations. That, in many ways, is a good thing too.”

The post How The Supreme Court’s Chevron Decision Could Help Stop Home Health Cuts appeared first on Home Health Care News.

The Centers for Medicare & Medicaid Services’ (CMS) proposed home health payment rule, released Wednesday, included significant cuts for the third straight year. Those cuts, among other proposed changes, raise questions over the stability of the industry in the coming years.

It has providers asking themselves and others the question: “Why us?”

For an industry that demonstrably saves money for the larger health care ecosystem, such harsh and continued cuts seem to be contradictory, home health stakeholders believe.

“These cuts are nothing short of draconian,” Stacey Smith, the vice president of public policy at AccentCare, said Wednesday.

On top of those cuts is the threat of CMS clawbacks for what the agency believes to be overpayments to home health agencies over the last five years. That clawback number has risen to $4.55 billion in total – more than $966 million than CMS previously estimated. And it will keep growing until further, temporary cuts are implemented.

CMS has expressed that it doesn’t want to put multiple cuts – of the permanent and temporary variety – on top of each other. But some providers see more cuts, for more years, that will keep them in payment purgatory. They would rather rip the Band-Aid off.

“CMS is not proposing the implementation of temporary adjustments, now estimated at a truly bewildering $4.5 billion,” Stephens wrote in an analyst’s note yesterday.

“Bewildering” and “draconian” feel like two descriptors of the 2025 proposed rule that most providers and advocates would agree with.

In this week’s exclusive, members-only HHCN+ Update, I’ll dive deeper into the cuts, but also consider a few other noteworthy proposals included in the rule, including changes to the Home Health Value-Based Purchasing (HHVBP) model, the Conditions of Participation (CoPs) and more.

Predictably unsustainable

In 2022, CMS proposed a 4.2%, or $810 million, decrease to aggregate payments for 2023. It ultimately finalized a permanent behavioral adjustment cut to the Patient-Driven Groupings Model (PDGM), but also finalized a 0.7%, or $125 million, increase.

In 2023, CMS proposed a 2.2%, or $375 million, decrease to aggregate home health payments for 2024. It finalized a 0.8%, or $140 million, increase compared to 2023 aggregate payments, while again implementing permanent cuts.

Wednesday, it proposed a 1.7%, or $280 million, decrease to aggregate home health payments for 2025.

The final rule is expected in late October or November, but the jig is up. Providers believe CMS, to push its cost-cutting agenda, lessens the blow in the final rule to get provider and advocate heat off its back.

And with that, it’s time to evoke the Paul Kusserow quote that I revisit when proposed and final payment rules are released.

“My concern is the game that we play with CMS,” Kusserow – then the CEO of Amedisys Inc. (Nasdaq: AMED) – told me two winters ago. “It’s a long, exhausting game. They come up with a proposed significant cut. The whole industry gets all worked up about it and runs to Washington. I’ve done this, and everybody in our business has. We lobby, lobby lobby, they get a lot of pressure, and then they come back with something that is just mediocre. It’s not enough for us to get Congress all worked up about it to pass legislation. But it’s enough to keep us in purgatory. We have to get through this dribbling sense of inadequate reimbursement.”

While providers have become acutely aware of this game, it appears CMS will continue to play it.

In this game, though, CMS still slides in permanent cuts that will have long-lasting effects on the home health industry. And what’s most disheartening about that for providers is the fact that home health care is one of the only industries that is both future-facing and cost-saving.

“Home health care is a proven, efficient spend in that it reduces the total health care cost for the entire system,” Choice Health at Home CEO David Jackson told me. “It continues to be frustrating that we are looked at in a silo, and not seen for the significant value that we bring. … It’s frustrating for providers, who are seeing an increased difficulty in retaining and maintaining staffing levels that are sufficient to serve the public.”

Indeed, home health care does save health care systems and health care payers money. It’s why private payers want more home health services for their members, not less.

It’s also why HHVBP saved Medicare hundreds of millions during its demonstration period, and why it is expected to save Medicare billions more over the coming years. It’s important to note that the home health-focused HHVBP is among the few CMS Innovation Hub initiatives that has produced savings – a fact that recently led to its head, Elizabeth Fowler, having to testify in front of Congress.

During that hearing, Republican Chair of Energy and Commerce Cathy McMorris Rodgers (R-Wash.) said she has “a hard time believing any objective observer could look at the results thus far and describe CMMI as a success.”

What’s more, though more home health care is good for the overall system, Medicare fee-for-service cuts almost guarantee there will be less services to go around for an aging population moving forward. That’s particularly the case because of Medicare Advantage (MA) penetration, with MA plans already paying far less for services than traditional Medicare.

It is not CMS’ job – it has asserted – to consider MA payments for home health services. Because of that, an incomplete picture of home health agency profits are often painted by the Medicare Payment Advisory Commission (MedPAC) and others.

“MedPAC needs to be instructed to include all Medicare reimbursements and related costs rather than just Part A,” VitalCaring President Luke James previously told HHCN. “Part C — or Medicare Advantage — now represents more than half of the Medicare beneficiaries in our country. Home health providers didn’t ask for this reality, nor did they cause it. But the industry is reeling from the numerous negative implications this reality has caused.”

Instead, providers are banking on higher rates from MA plans, as well as tech investments to reduce costs on the back end. But there’s no guarantee those measures alone will be enough, particularly for the thousands of providers without scale.

“Mom-and-pop agencies are a necessity for the delivery of care in the United States,” Jackson said. “They serve smaller communities, niche communities. I’m always fascinated at what a nurse in rural East Texas or West Texas has been able to do, that a big company just never would have done. … That is something I think we need to foster in the system.”

What else is in the proposed rule

Every year, in addition to the estimated decrease or increase in base payment, there are many other elements of a proposed rule to consider.

The now-nationwide HHVBP model could change. CMS is accepting comments for consideration around future performance measure concepts. In the past, some providers argued that certain HHVBP measures were out of home health providers’ control. For instance, patients in extremely poor condition when received by home health agencies are sometimes unlikely to get better, no matter how exemplary the care they receive is.

In addition to that request for information, CMS is also considering how it could further embed health equity measures into HHVBP.

Jackson noted that cuts on their own have the chance to worsen health equity.

“Nurses are going to be magnetized to these more affluent markets,” Jackson said. “It’s going to hurt the ability to obtain talent in rural markets, in markets that have difficulty finding staff. That’s going to have a negative impact on health equity.”

That will likely be exacerbated by the minimum staffing level requirement in nursing homes, which will naturally make the competition for nurses more fierce in post-acute care.

CMS is also taking a greater look at home health access. In the past, MedPAC has viewed access based on how many agencies exist per U.S. county. But counties vary by size, as do home health agencies. Providers have argued that access is worse off than the agency-per-county metric would suggest.

“We are seeking public comments on factors that influence the services HHAs provide, the referral process, limitations on patients being able to obtain HHA service, such as rural location and availability of staff, plan of care development, and the HHA’s communication with patients’ ordering physicians and allowed practitioners,” the 250-page proposed rule read. “We ask the public for data, detailed analysis, academic studies, or any other information to support their comments that provide a direct link to patient health and safety.”

Outside of questions around initiation to care, CMS specifically wants to know the answer to this question: “What challenges, barriers, or other factors, such as workforce shortages, particularly in rural areas, impact rehabilitative therapists and nurses in meeting the needs of patients at the start of care and early in the plan of care?”

Of note is also that CMS seems to accept some industry data – for instance, regarding health equity – but not all. Last year, CMS scoffed at most of the data that the industry put forth around referral rejection rates and contemporary home health access.

CMS also proposed an “acceptance to service” policy, which it believes at least some home health agencies already have.

“This new standard would require the HHA to develop, implement, and maintain through an annual review a patient acceptance to service policy that addressed criteria related to the HHA’s capacity to provide patient care, including, but not limited to, anticipated needs of the referred prospective patient, case load and case mix of the HHA, staffing levels of the HHA, and competencies and skills of the HHA staff,” the proposal read. “In addition, we propose the HHA would have to make public accurate information about the services offered by the HHA and any limitations related to the types of specialty services, service duration and service frequency.”

The staffing-specific requirements could be the successor to the nursing homes’ minimum staffing level mandate. While it’s unlikely a similar mandate would come into home health care, given its one-to-one nature, a more stringent policy around staffing capabilities could come to fruition.

Potential mitigators

More lobbying efforts will follow this proposed rule. The Partnership for Quality Home Healthcare CEO Joanne Cunningham believes that this year being an election year will actually bode well for the industry.

Jackson said the same.

“In an election year, we need to be loud,” he said. “We need to be vocal.”

In the past, the industry has had no issue getting measures like The Preserving Access to Home Health Act introduced. The issue has been getting it to move after introductions in the House and Senate.

CMS may again reduce the cut by the time the rule is finalized. But it’s clear that the agency is not budging on its behavioral adjustment thesis.

Despite it being unlikely, Congressional action may be home health providers’ best bet in 2024.

The post ‘Draconian’ And ‘Bewildering’: Inside The 2025 Home Health Proposed Payment Rule appeared first on Home Health Care News.

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.”

The post [Updated] CMS Proposes Over 4% Cut To Home Health Medicare Payments In 2025 appeared first on Home Health Care News.

Home health providers want better rates and arrangements from Medicare Advantage (MA) plans. The plans, on the other hand, sometimes still can’t figure out what they want from providers.

Some of the largest home health companies have begun to make headway with MA plans.

“I think the payers are recognizing that this is not a commodity business; there is a real need to partner with high-quality providers in the communities,” Pennant Group Inc. (Nasdaq: PNTG) CEO Brent Guerisoli recently said.

But a simple recognition of the value of home health care is not always sufficient, particularly within regional or nationwide plans.

Enhabit Inc. (NYSE: EHAB), for instance, has spent the last couple of years diversifying its revenue to include more of a MA mix. But, in doing so, it has had to get better rates from MA plans to ensure its bottom line doesn’t sink too far.

The company has been successful at that, agreeing to dozens of new contracts that have allowed it to inch closer to sustainability.

The negotiations haven’t always been easy.

I wrote last year about how some health plans didn’t even have point people specifically assigned to home health care, an obvious thorn in a provider’s side.

Enhabit CEO Barb Jacobsmeyer also explained Wednesday, at the Leerink Partners Healthcare Crossroads Conference, that even if there is a point person, they’re sometimes incentivized only to keep costs down.

“The most resistance is when you find that they’re siloed within their negotiating departments,” Jacobsmeyer said. “If it is the group that handles just home health, frankly, what we’ve learned is that they have a bonus, or incentive, to keep their unit cost in place. If they’re not talking across the hall with those that are focused on emergency room visit cost, acute care utilization costs, that’s where we see the barrier.”

I also wrote last summer about the leg up that home health-friendly MA plans would have in the future.

In order for there to be more “home health-friendly” MA plans, though, plans need to take a more holistic view of health care costs across the continuum.

Right now, that’s not always happening. And that’s the topic of this week’s exclusive, members-only HHCN+ Update.

A short-sighted view

Earlier this month, I spoke with CareCentrix CEO Steve Horowitz about post-acute care, payers and the friction between the stakeholders involved on each side.

He made something clear: Home health costs going up, generally, is a good thing.

“You actually want more home health,” Horowitz told me. “You want your home health costs to go up. You don’t want to overpay for anything, but you want your home health cost to go up, because it’s a cheaper setting than if you were taking care of the patient in the facility.”

Now a part of Walgreens Boots Alliance (Nasdaq: WBA), CareCentrix is a home-based care coordination platform, as well as a value-based care enabler.

If one department is squeezing down home health costs, they may believe they’re doing their jobs. But, on the other end, as Jacobsmeyer pointed out, emergency care and rehospitalization costs may be skyrocketing.

“I can cut home health costs in a heartbeat, or DME costs, or inpatient utilization,” Horowitz continued. “But every time you squeeze it, something else blows up. That’s the hard part, if you think about it only in a silo.”

To be fair to MA plans, the Centers for Medicare & Medicaid Services (CMS) arguably takes the same approach. Models like the Home Health Value-Based Purchasing (HHVBP) Model have saved Medicare billions, only for CMS to turn around and continue to cut home health payment rates.

That’s part of the reason why home health advocates have urged CMS, The Medicare Payment Advisory Commission (MedPAC) and others to take a more holistic view of home health payment. Advocates urge these groups to consider MA payments rates to home health agencies, but also the savings that greater home health access could bring to the entire health care system.

“As the nation faces a debt ceiling of $34 trillion and climbing, it’s no surprise that the federal government is under pressure to find ways to cut program costs and crack down on overspending,” a dozen home health advocate and provider voices wrote last week in an op-ed for HHCN. “What is surprising is that the program they continually target in budget cutbacks has an impressive record of saving the government billions: Medicare-certified home health care.”

That evoked something Michael Johnson – Bayada’s home health and hospice leader – told me last year, which is that all CMS policymakers have “is a hammer,” meaning that cost-cutting in home health care was their one vehicle to make a difference.

In MA, the little leverage that providers do have is the fact that plans need home health services for their patients, and access is dwindling with fee-for-service rate cuts.

Enhabit has drawn a hard line: It won’t take more than a 25% “discount” on rates from plans. That discount is compared to the fee-for-service Medicare rate. Instead of 40% discounts, Enhabit has achieved either episodic contracts or per visit contracts that are generally 10% to 25% below Medicare fee-for-service rates.

The company still prefers the more value-based, episodic arrangements, but those require collaboration between plan and provider.

“It really aligns their incentives with ours,” Jacobsmeyer said. “We want to be paid better, but we also want to help them where their pain points are, and that is having a timely and efficient movement of patients in institutional settings [back into the] home.”

It seems everyone knows – or assumes – that more responsible home health utilization equals lower costs for a population, whether that’s a small sample size or a nationwide one.

CareCentrix, which is in the middle of these arrangements, should be an authoritative voice on the subject.

But there are other experiments currently ongoing that should bear proof of that assumption. And that lies within the large payer organizations that own home health organizations, like Humana Inc. (NYSE: HUM) and UnitedHealth Group (NYSE: UNH).

Specifically, CenterWell President Sanjay Shetty told me earlier this year that one of his goals is to prove home health care’s worth to Humana – and everyone else.

Although some home health providers are queasy at the idea of these large payers owning top providers, they do offer hope in that way.

“It’s an opportunity for us to continue to evolve the thinking around home health, which is giving home health its due for driving outcomes along the entire continuum of care,” Shetty told me. “I think, hopefully, that proof point will help. The other thing that’s important to keep in mind is that CenterWell will never be able to provide 100% of care to all Humana members, even as big as we are. We are absolutely dependent on a broad payer network and a broad provider network.”

The post Payers Continue To Take Short-Sighted View Of Home Health Care appeared first on Home Health Care News.

Firstly, the timeline of the rule is now clear. Specifically:

– In three years, states must “report on their readiness to collect data regarding the percentage of Medicaid payments for homemaker, home health aide, personal care and habilitation services spent on compensation to the direct care workers furnishing these services.”

– In four years, states must “report on the percentage of Medicaid payments for homemaker, home health aide, personal care and habilitation services spent on compensation to the direct care workers furnishing these services, subject to certain exceptions.”

– Then, in six years, states must “generally ensure a minimum of 80% of Medicaid payments for homemaker, home health aide and personal care services be spent on compensation for direct care workers furnishing these services, as opposed to administrative overhead or profit, subject to certain flexibilities and exceptions.”

The certain flexibility and exceptions are a part of the HCBS payment adequacy provision, which provides states the option to establish “hardship exemptions” and objective criteria for providers that may be facing “extraordinary circumstances.”

There also will be a separate performance level for small providers “meeting state-defined criteria based on a transparent state process and objective criteria.” The adequacy provision also exempts the Indian Health Service and Tribal Health program from complying with certain requirements, CMS said in its fact sheet.

Providers and advocates expressed displeasure with the 80-20 rule being finalized Monday, but there appears to be two parts of the finalized rule that could offer some grace to providers.

The first is a longer runway – six years as opposed to four – and the second is states’ ability to create their own criteria for exemptions, though it is unclear just how much wiggle room they will have under CMS’ watch.

Other provisions included in the rule include the requirement for states to report on Medicaid waiting lists and service timeliness for HCBS, as well as a “standardized set of HCBS quality measures,” which will likely be welcomed news for most providers.

“Ensuring beneficiaries can access covered services is a critical function of the Medicaid program and a top priority of the Department of Health and Human Services, Centers for Medicare & Medicaid Services,” CMS wrote. “The Ensuring Access to Medicaid Services (Access rule) final rule advances access to care and quality of care, and will improve health outcomes for Medicaid beneficiaries across fee-for-service (FFS) and managed care delivery systems, including home- and community-based services provided through those delivery systems.”

The fight to stay in business

After a public comment that drew major feedback – both in volume and in opposition – many top HCBS stakeholders believed that CMS would not go ahead with the Medicaid Access Rule as it was originally proposed in April of last year.

And, while there are certainly added elements and adjustments compared to the proposal, the finalized version is still a disappointing development for the HCBS community.

“Are we surprised? I think disappointed is probably a better word,” National Association for Home Care & Hospice (NAHC) President William A. Dombi told Home Health Care News Monday. “Surprise is probably not what we feel, because this administration has been pretty focused on making this happen from Day One. And when the president references home care in the State of the Union address twice in a row, a lot of signs indicated it was going to be pretty close to the proposed rule.”

Dombi, along with Damon Terzaghi – the director of Medicaid advocacy at NAHC – believed there are parts of the rule that could lead to positive HCBS progress, but that the 80-20 provision will likely overshadow those.

Ultimately, providers’ ability to operate is obviously paramount to greater access to HCBS. With blanket wage mandates, their ability to do so is hindered.

“The reality is, there are all sorts of requirements placed on providers to operate in the Medicaid home care space,” Terzaghi said. “And they are important requirements to protect the health and welfare of participants to ensure quality services are delivered, and to prevent fraud and abuse. All of those are administrative requirements that take money to implement. So, if you’re saying you have to do all of these things to participate in the program, but by the way, you don’t have enough money to perform those required functions, how do you – as a provider – justify continuing to deliver services?”

While the current administration has been supportive of the idea of enhanced home-based care services in the U.S., its strategies to get there haven’t always been backed by providers.

“At its core, the rule is a fundamental contradiction,” Dombi said. “It’s saying, we have all of these things we need to do to improve the quality of care, to improve the lives and the health and safety of individuals. All of those things require administrative expenses to achieve. Yet at the same time, the rule is saying, ‘We’re cutting the available funding for you to implement those same activities we’re requiring.’”

CMS could urge states to raise rates so that providers can keep their heads above water with the 80-20 provision in place.

Without that, there will undoubtedly be agency closures, a warning echoed by many industry advocates Monday.

“This goes to the heart of who decides what a Medicaid program looks like in a state, and how it’s operated,” Dombi said. “The broad parameters that are in the federal law clearly set a standard for the structure. But this goes to unprecedented depths of micromanaging that I think you’re going to find the states concerned that, alright, this is the first chapter of micromanaging. What’s the next chapter? What’s the next chapter after that?”

This is a developing story. Please check back later for more updates at homehealthcarenews.com.

The post What The ‘Fundamentally Contradicting’ Medicaid Access Rule Includes appeared first on Home Health Care News.

Dubbed the ACO Primary Care Flex Model (ACO PC Flex Model), it will provide one-time advanced shared savings payments and monthly prospective primary care payments to Accountable Care Organizations (ACOs) to empower primary care providers, according to a CMS release.

The model was another creation of the CMS Innovation Center.

But here’s the key note for home-based care providers:

“People whose primary care provider participates in the ACO PC Flex Model may get care in more convenient ways, like care based at home or through virtual means, extra help managing chronic diseases, and more preventive health services to keep them healthy,” CMS Administrator Chiquita Brooks-LaSure said in a statement.

The National Association of ACOs (NAACOS) applauded CMS for the move, suggesting this was a step in the right direction for risk- and value-based care.

“The National Association of ACOs (NAACOS) applauds CMS for launching the ACO Primary Care Flex model, which will allow Medicare Shared Savings Program (MSSP) ACOs to offer prospective population-based payments for primary care,” the advocacy organization wrote in a statement. “NAACOS has been advocating for this approach, which will bolster primary care practices in ACOs. Shifting to prospective payments provides primary care practices with stable and predictable cash flow needed to transform care delivery and provide comprehensive, team-based care.”

Primary care providers and home-based care providers currently, and generally, have transactional relationships.

But under a more value- and risk-based lens, they need each other on a higher level.

“When a primary care doctor owns that outcome, these value-based primary care providers – which isn’t the majority of who home health is dealing with – absolutely care whether that patient goes to an ER, goes to a hospital, and would want to be available 24 hours per day to help avoid that outcome, which is great for them and the patient,” CenterWell President Sanjay Shetty recently told Home Health Care News.

Home-based care providers have begun to find success in risk-based care through these ACO and primary care provider setups. They fill the gaps, and are able to see and treat patients where primary care providers cannot.

The ACO PC Flex Model, theoretically, should offer even more of those opportunities for home-based care providers.

The post CMS’ ACO Primary Care Flex Model Could Offer Home-Based Care Providers Risk-Based Opportunity appeared first on Home Health Care News.

Dubbed the At Home Observation and Medical Evaluation (HOME) Services Act, the bill was introduced specifically by Sens. Marco Rubio (R-Fla.) and Tom Carper (D-Del.). Sen. Marsha Blackburn (R-Tenn.) was an original cosponsor of the legislation.

The bill would build off of the Acute Hospital Care at Home (AHCAH) program, which was created by the Centers for Medicare & Medicaid Services (CMS) through a waiver during the height of the COVID-19 pandemic.

As of Feb. 2, 312 hospitals across 131 health systems have been approved to participate. The program was extended past its original expiration date, and the flexibilities associated with it will last through 2024.

While the AHCAH program covers only acute patients, the HOME Services Act would include “observation status patients.” Broadly, an observation status patient is generally someone waiting to hear from a health system on whether they will be admitted to the hospital or discharged.

“Addressing our health care challenges requires innovative solutions,” Sen. Rubio said in a statement. “The HOME Services Act builds on the success of the hospital-at-home program to lower costs and burdens and improve patient outcomes and satisfaction.”

Even outside of the AHCAH program, the hospital-at-home model has grown significantly in prominence over the last few years. Health systems have created their own programs outside of the AHCAH, and select payers have begun supporting the model as well.

The AHCAH program itself has delivered very promising results.

Of the 11,159 patients who received care from November 2021 to March 2023, only 7.2% of patients that were being treated in the home were transferred to the hospital, according to a recent study published by JAMA.

In the past, health system leaders have had gripes with the narrow limits of the AHCAH program, however. The HOME Services Act, if passed, would be significant in expanding those limits, as it would allow health systems to place patients in at-home programs prior to reaching a higher level of acuity.

“The pandemic taught us that meeting patients where they’re at is possible and often preferred,” Sen. Carper said in a statement. “That’s why I worked to increase and expand access to hospital-level care from the comfort of home. These services have seen tremendous success for people across the country, including in Delaware, and the At HOME Services Act would build on these programs to continue reducing costs and improving patient outcomes.”

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Home-based care providers avoiding the shift to value-based care are running out of time and excuses.

The Centers for Medicare & Medicaid Services (CMS) wants 100% of traditional Medicare beneficiaries and the “vast majority of Medicaid beneficiaries” in accountable care relationships by 2030.

Home health providers are already under the Home Health Value-Based Purchasing (HHVBP) Model, which is, by definition, a value-based care model.

Plus, the share of Medicare Advantage (MA) beneficiaries is increasing, while the share of traditional Medicare beneficiaries is declining. MA plans pay less for home-based care services, and value-based arrangements may be the best way for providers to achieve healthy financial relationships with those plans.

Even if providers are not capable of moving fully toward value-based care on their own, there are plenty of partners that can help them get there. They’re not just health plans.

There are value-based payment enablers, risk-bearing delivery organizations and hybrids of the two that can be leveraged by providers.

Healthcare Management Administrators (HMA) recently released a 70-page report on the current value-based care landscape. CMS also recently unveiled a value-based care spotlight webpage to aid providers.

This week’s exclusive, members-only HHCN+ Update pulls from those new resources, as well as recent conversations with home-based care leaders, to paint a picture of what value-based care currently looks like from a home-based care provider perspective.

Value-based care entities

When regulators point toward and acknowledge a trend they’ll be following over the next decade, the private sector generally listens closely.

As value-based care has gone from a pie-in-the-sky term with no real meaning behind it to something legitimate, more opportunities have arisen for providers interested in moving further toward value.

“At the start of the movement, value-based arrangements primarily involved traditional providers and payers engaging in relatively straight-forward and limited contractual arrangements,” HMA’s report read. “In recent years, the industry has expanded organically to include a broader ecosystem of risk-bearing care delivery organizations and provider enablement entities with capabilities and business models aligned with the functions and aims of accountable care.”

It’s worth noting that most home health providers have been making shifts toward value, particularly after the implementation of the Patient-Driven Grouping Model (PDGM), which de-incentivizes volume.

But it’s also worth noting that providers were entrenched in the fee-for-volume cycle for a long time. Whether they would admit it or not, undoing those habits is an ongoing chore.

Luckily, they don’t have to do it all on their own.

HMA identified three different types of entities worth paying attention to in the current value-based care landscape, for instance:

– Value-based payment enablers: “Entities that partner with providers to help them in the transition to value; share responsibility for the cost and quality outcomes; does not own provider asset.”

One example given by HMA here was Caravan Health, which was acquired by Signify Health in 2022. Signify Health is an at-home care solutions enabler owned by CVS Health (NYSE: CVS). It is not a traditional home health provider itself, but does partner with home health providers.

“We talked a lot through this journey about home health,” CVS Health CFO Shawn Guertin said after the Signify acquisition, also in 2022. “And the value-based care capabilities that this brings us is where a lot of the power is, I think, for the long haul. I’m very excited about the opportunity that Caravan could provide us for the future.”

– Risk-bearing delivery organizations: “Entities designed to deliver value-based care from the outset and assume accountability for the cost and quality outcomes of patient populations.”

Oak Street Health, which is now also owned by CVS Health, is one of these risk-bearing delivery organizations. It’s clear what CVS Health is trying to do from a strategic perspective.

Another entity mentioned is CenterWell, the provider organization owned by Humana (NYSE: HUM). CenterWell has three pillars currently: pharmacy, primary care and home health.

Over the next few years, CenterWell President Dr. Sanjay Shetty wants home health care to play an even larger role in the entity’s overall value-based care goals.

“I think the intent, with our pivot into value-based models for the home, is to first prove [things out],” Shetty told me this week. “We are making those investments within the business and within the clinical model, in order to change the way we’re doing things – to orient the teams on the ground towards the outcome. We’re still probably in the early days of that journey, but it’s been exciting.”

– Hybrids: “Entities that own risk-bearing delivery assets and offer VBP enablement services to external providers.”

A prime hybrid, which HHCN has covered extensively, is VillageMD. A primary care provider with a home- and community-based focus, VillageMD is backed by Walgreens Boots Alliance (Nasdaq: WBA). The latter has put up over $6 billion behind the former’s business.

“Home-based care is just going to become even more important,” Dr. Clive Fields, VillageMD’s co-founder and CMO, told Home Health Care News in 2021. “With the use of technology, teams and analytics, we think we can drive the same kinds of results for people who previously just may not have that access, either because of where they lived or because of the transportation that was available to them.”

Where providers stand

Some providers are taking on risk without a partner, through a Program of All-Inclusive Care for the Elderly (PACE), for instance. Some are partnering with PACE programs, too.

Other home-based care providers are partnering with health plans in value-based arrangements, though historically those have been on a more limited basis.

Home-based health care is lower-cost care, and also drives desirable outcomes when delivered correctly. Therefore, the aforementioned three types of value-based entities could all use home-based care providers. At the same time, the providers would also benefit from engaging with organizations already set up to deliver legitimate value- and risk-based care.

The first step is generally a cultural change, which is something I noted in last week’s update as well.

“I think the first relationship that you must establish – and this sounds a little hokey – is a pretty good internal harmony with your employee base, your stakeholders, your board, your governance, structure, whatever that might be,” Chapters Health System Andrew Molosky told me last month. “Because nothing will waylay an organization faster than when you have people viewing the priorities differently.”

CMS’ spotlight on value-based care reaffirms their commitment to the 2030 initiative, but it also proves just how behind many providers still are.

The webpage goes over some of the basics of value-based care – why it matters and how it can be achieved.

“CMS just launched a new Value-Based Care Spotlight page that explains in plain language what we mean by value-based care,” CMS Deputy Administrator and Director Liz Fowler said in a statement. “How it supports patients and providers, and why value-based care is important.”

Even if most home-based care providers are behind, value-based care will have to wait.

Time is of the essence, but health plans, patients and risk-enabled providers need home-based health care to truly provide the value-based care CMS wants.

“As with other healthcare organizations, entities in this segment are expanding their in-home care capabilities to support patients and caregivers in low-cost, convenient settings and a growing cohort of home-based innovators is emerging, each with slightly different approaches to optimizing in-home care,” the HMA report read.

The post In Rapidly Changing Value-Based Care Landscape, Home-Based Care Providers Facing Crunchtime appeared first on Home Health Care News.

A similar trend could be happening in home health care in one major county, U.S. Centers for Medicare & Medicaid Services (CMS) data suggests.

In hospice, the surge of new providers and potentially fraudulent activities has been concentrated in Arizona, California, Nevada and Texas. In home health care, it’s Los Angeles County.

After becoming aware of the data on new hospice openings and following a series of scathing media reports, CMS implemented a Special Focus Program (SFP), effective Jan. 1, while also finalizing a new rule forbidding change in majority ownership during the 36 months after initial Medicare enrollment, including acquisitions, stock transactions or mergers.

In August, the agency additionally announced it was considering administrative action against 400 hospices.

“Unfortunately, hospices are profiting from fraud at the expense of beneficiaries far too often,” CMS said at the time.

Meanwhile, some of the aforementioned states have pushed forward stronger rules and regulations, too. For example, in 2021, California passed two reform laws that included a moratorium on new hospice provider licenses until the state health department weeded out bad actors.

A California Department of Justice (CDOJ) report detailing the state’s history of lax oversight helped fuel that initiative. 

“The state’s weak controls have created the opportunity for large-scale fraud and abuse,” CDOJ indicated in its report.

Back in the spotlight

Hospice fraud and the related oversight efforts were back in the spotlight last week, when ProPublica reported that new hospices in California are still receiving Medicare certification with clear instances of fraud happening in the other states as well.

In one instance last year, 15 new hospices received Medicare certification, all operating from the same two-story building in Los Angeles, according to ProPublica.

In another: A location in Phoenix was approved for three new hospice licenses, all at the same location as dozens of other new providers in the previous two years.

According to a review of Medicare claims data shared with Home Health Care News and Hospice News, California had 102 newly enrolled hospices in 2023. In Arizona, the number of new hospices increased by 25 during the same period, while Texas and Nevada saw 72 and 25 new providers, respectively.

Across the board, no other state experienced an influx of more than 15 new hospices, with most states reporting single-digit enrollment figures.

In total, approximately 69% of all newly licensed hospices in 2023 were situated in Arizona, California, Nevada and Texas.

The review was conducted by an industry source familiar with the Medicare claims data. This source also told HHCN and Hospice News that multiple new hospices had been enrolled in California since the time ProPublica finalized its story.

Industry groups, such as the National Hospice and Palliative Care Organization (NHPCO), are taking notice.

“While CMS has implemented many of our program integrity recommendations to root out bad actors, the data make it clear that more needs to be done, and that the hospice Special Focus Program is not the right tool for fraud prevention,” Ben Marcantonio, NHPCO COO and interim CEO, told Hospice News in an email last week.

The home health connection

The numbers point to something similar possibly happening in the home health industry, largely in LA County.

And if that is indeed the case, it casts doubt on how CMS and the Medicare Payment Advisory Commission (MedPAC) gauge the overall home health market, in terms of size and beneficiaries’ access to care.

From the start of 2019 through June 2023, the number of home health agencies delivering services decreased from 8,838 to 8,280 – a market contraction of about 6%. During this same time, however, Los Angeles County’s number of home health agencies delivering services increased from 896 to 1,309 – a jump of about 46%.

With just LA County’s growth removed, the number of home health agencies delivering services in the U.S. fell 12% over that nearly five-year window.

LA County is muddying the waters when it comes to home health utilization as well. Controlling for LA County, there has been a 16% reduction in home health utilization since 2019, according to the data source who spoke with HHCN and Hospice News.

It’s important to note that the 8,838 figure is for home health agencies actually filing claims. There are more than 11,500 actively enrolled home health agencies, but some never provide services.

A timely discussion

LA County’s home health numbers could mean fraud, waste and abuse happening in that market, similar to what was happening with hospice throughout Arizona, California, Nevada and Texas.

More immediately, though, the data tells a less rosy narrative than the one coming from Medicare officials – and the timing around these two views couldn’t be more important.

As the health care landscape has stabilized coming out of the COVID-19 pandemic, CMS has sought to recalibrate the Patient-Driven Groupings Model (PDGM), the mechanism under which home health agencies are paid. Implemented at the start of 2020, PDGM is supposed to be budget neutral, meaning it can’t distribute more or less money to home health care than the previous payment model.

Broadly, CMS believes PDGM has overpaid home health agencies, so the agency has moved forward with adjustments and cuts in 2023 and 2024. The home health industry disagrees with that view, while also arguing that further cuts would jeopardize medicare beneficiaries’ ability to receive care.

Rejection rates for home health agencies reached a record high, averaging 76%, in December 2022, according to industry data. That’s an increase from the denial rate of about 54% seen in 2019.

CMS has pushed back on the notion that access to care is at risk.

“CMS looked closely at our data to ensure the payment rate adequately covers the costs reported by [home health agencies], without creating unnecessary hardship to providers and maintaining access to quality services for all beneficiaries,” CMS wrote in its 2024 final rule. “Maintaining access is one of CMS’s priorities when making policy decisions.”

For 2021, payments to home health agencies in LA County were $1.2 billion, which was 7% of the national fee-for-service spend, even though only 2% of the traditional-Medicare enrollees reside in LA County, according to the HHCN source.

Additionally, spend per traditional-Medicare enrollee in LA County was $1,577 compared to $449 nationally, when controlling for LA County. LA County increases traditional-Medicare enrollee spend per beneficiary by 5%.

If LA County is skewing how the collective home health market is evaluated, it could have profound effects for years to come.

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On Tuesday, the agency provided further guidance around how states can better support HCBS programs, which are both popular and sometimes hard to navigate.

“For too long, American families have struggled to find and afford reliable high-quality care that enables their loved ones to live independently,” U.S. Department for Health and Human Services Secretary Xavier Becerra said in a statement. “Some people are forced to forgo their careers and stay home to care for a family member, and many caregivers struggle to make living wages. Thanks to President Biden and the American Rescue Plan, that changes today.”

The Biden-Harris Administration has been an ardent supporter of HCBS access throughout the last three years, which personal home care providers have certainly appreciated. There’s been less support for Medicare-certified home health services, however.

“The Biden-Harris Administration has distributed $37 billion from the American Rescue Plan across all 50 states for home- and community-based services,” Becerra continued. “Additionally, we are delivering new guidance to states about how direct worker registries can help ensure more individuals receiving Medicaid-covered services can receive care in a setting of their choice.”

CMS’ new guidance outlines “how states can establish important tools to connect individuals needing care with those qualified to provide it,” according to the agency.

The guidance focuses on the benefits of worker registries and the federal funding available to build out and maintain those registries from American Rescue Plan funds.

“It’s critical that people, particularly older Americans and people with disabilities, are able to receive care in the setting of their choice,” CMS Administrator Chiquita Brooks-LaSure said in a statement. “To achieve that vision, communities need clear links to the qualified professionals best trained provide that care. Helping states build and maintain worker registries will enable more people to find and receive high-quality, affordable, and person-centered care at home and in the community.”

There’s a high demand for HCBS and direct-care workers in the U.S., which help seniors and those with disabilities age in place.

A recent report from the New York-based advocacy and research organization PHI found that more than 900,000 home care workers would be needed to meet demand by 2031. That’s not even considering those that will leave the field during that time period.

CMS’ focus on workforce registries is to ensure that those in need of care – and those qualified to provide care – can more easily find each other.

“This guidance marks another step towards supporting access to quality HCBS so older adults and individuals with disabilities can live safely and independently in their homes and communities,” the CMS release read. “These efforts include enhanced Medicaid funding for HCBS provided through the ARP; proposed rulemaking, including to improve access to care, care quality, and health outcomes, as well as better address health equity issues in the Medicaid program; and work with partners across government, including at the Department of Labor, to improve the type of data available on this workforce.”

Currently, there’s a proposed rule out there from CMS that would force HCBS providers to direct 80% of reimbursement to home care workers. 

The home-based care provider community has responded strongly to that proposed rule, asserting that a blanket wage mandate could adversely affect providers in certain areas.

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