Home Health Providers’ Medicare Advantage Problem Will Be A ‘Generational Battle’

When National Association for Home Care & Hospice President Bill Dombi left a home health care-focused hearing in Washington D.C., earlier this month, he did so on an emotional high.

That’s because, after a long two years for home health providers and advocates, things were finally starting to look up.

The hearing he attended was put on by the Senate Finance Committee’s Subcommittee on Health Care. The attending lawmakers were well educated on home health care, and seemed to sympathize with providers’ current plight.

That – plus other positive developments – has made Dombi more optimistic about the chances that the payment cuts set to be included in the home health final payment rule will be mitigated.

Home Health Care News recently sat down with Dombi during an episode of HHCN+ TALKS to chat about the upcoming final rule, the Medicare Advantage fight that will be a “generational” battle” and much more.

The video and transcript of that conversation are included below.

HHCN: Welcome everyone to another edition of HHCN+ Talks. I am Home Health Care News Editor Andrew Donlan. Thank you for joining us yet again. I am joined by a familiar face, Bill Dombi, the president of the National Association for Home Care & Hospice. Bill, thank you so much for joining me today.

Bill Dombi: Great to be with you. Looking forward to this conversation.

HHCN: Last week, I was listening in live as you were a witness for the hearing put on by the Senate Finance Subcommittee on Health Care. The hearing was specifically about aging in place and home health care. Can you just give the audience a little background on why that hearing took place in the first place?

Dombi: Well, when we were looking into our needs for 2023 advocacy, home health obviously became a big subject area, with the PDGM changes that were around payment rates and the like. We were forecasting what we saw, another significant rate cut, and we knew we needed Congressional support and figured, what would congressional support look like beyond legislation.?

We thought that we really needed to get a better hold within the Senate Finance Committee relative to their awareness and understanding of home health on an overall basis, not just the PDGM payment rates, and that we needed to bring in the effect of the PDGM payment rates. In spending some time with one of our great supporters, Senator Stabenow, the idea came up about doing a congressional hearing.

Senator Stabenow was stepping aside to have Senator Cardin be the chair of the subcommittee on a seniority basis. Senator Cardin has also been a long-standing supporter of health care services at home. We pursued the idea with the senators and their staff and the committee staff about doing the hearing. Somewhere in late spring, they gave it the green light for trying to pull it together. Originally, the game plan was to have it in May.

With all the other things the Senate had to deal with, it got kicked into September, which we think was actually fortunate because to have the hearing at the point when the proposed rule is being developed into a final rule, we think, was good timing. Thanks to some good Senate support, our thinking was we needed the awareness increase and we needed to have them get a better understanding of the issue. Senators, like any member of Congress, have a tendency to have a working area that covers a broad range of things. Having deep knowledge was one of the things we wanted to increase. They gave us that opportunity and we ran with it.

HHCN: Can you also give a little bit of background on what exactly your testimony looked like?

Dombi: I think I actually gave myself a label of sorts of being a historical professor to present some of the things that have gone on in the home health benefit. Among the things I wanted to emphasize was that Congress has been very supportive over the years of increasing access to home health services – recognizing the value, but recognizing some of the barriers as well.

That goes back to as early as 1972. Congress actually eliminated the cost-sharing responsibilities for home health beneficiaries to try to incentivize the use of home health services.

They removed the caps and the like, so I wanted to have that conveyed to show that we are not asking for some newfound support. We’re really asking to learn the lessons of history here that this is a Congress that recognized the value of home health services early on. We need to have that continued as a recognized value within the Medicare program today even more so. The second part of it was to convey that as much as the support has been there, it’s still been a roller-coaster ride in home health. Where we are today this is just another generation of that.

Focusing on where we were in the mid-1990s and where we were with the onset of the prospective payment system and where we were when the Affordable Care Act and all the health care reform happened with big changes in home health — particularly around payment rates at each of those kinds of stages. Then, of course, where we are today, a lot of ups and downs in the context of that historical presentation that Congress has supported home health care services in so many ways.

To really bring out that the roller coaster was mostly related to payment model changes, not to changes of the scope of benefit leaving patients as the prime losers in this roller-coaster ride — getting less than they did in previous times. Then the third element of it in my testimony was to say, “Where are we in 2023?” A combination of home care by the numbers, home health care by the numbers to show we’ve lost 500,000 Medicare beneficiaries using home health services.

The odd thing is that we’re spending in 2023 dollars an equivalent to what we spent in 1997 dollars, which, when you think of inflation, means this has been seriously cut over the years without Congress trying to cut the benefit. Only trying to deal with payment model things leading to benefit cuts. In knowing some of the other witnesses that were there, Judith Stein from the Center for Medicare Advocacy was also going to talk about what beneficiaries have lost over time. That was the three-part approach I took in my testimony to try to then say, “We need your help, Senators. We need your help badly and beneficiaries need your help, too.”

HHCN: I thought the statistics were very telling, both the ones that you presented and also the provider perspective in the room, just how they were being forced to reduce access to patients in the areas that they generally had served over the last decade. The hearing seemed to go very well, at least from my perspective. Do you feel like it went well?

Dombi: I left that hearing on an emotional high, really increasing my respect for the senators in terms of the level of awareness and understanding they had already on home health services — the values that they’ve seen, both personally as well as from their professional side of things. I think that to the degree to which any of the witnesses could have been problematic for us – like Dr. Grabowski – they ended up saying things that we liked.

We really had an opportunity that went into an area that we think has been under-involved and that is the innovation capability within home health. The senators clearly rose to the occasion on the issues of the PDGM payment rate cuts, but to have conversations about hospital-at-home and interoperability of electronic medical records and home- and community-based services under Medicaid and telehealth, all those kinds of things was almost the equivalent of being taken into a candy store of policy discussion.

It turned out to be fun. I thoroughly enjoyed it and I left there, like I said, on an emotional high. At the same time, I’ve been offering maybe an overused metaphor in my own life, but someone once told me after I hit a good tee shot in a round of golf that, “Well, now, you got to do something with it,” meaning all you did was hit the first shot. We have to do something with what came about in the hearing and the opportunities that we think have been triggered.

HHCN: It was striking to me how educated the lawmakers at the hearing were on home health care. One of them even said something to the effect of, “My viewpoint has always been, you cannot afford not to invest in home health care services.” Do you feel like there is a more educated group of lawmakers in Washington, D.C., now?

Dombi: At least of the 13 people in the room who are members of Congress, certainly. We have had those challenges over the years to get them to really have a good working knowledge of home health services. That’s mostly due to the fact that their portfolio is so wide in terms of work — even if it’s just health care alone. We have changes in Congress every year too, particularly in the House of Representatives, so we’re in a constant education campaign with them.

Many of the people who were there at the hearing had been around for a while and so they had accumulated knowledge, but we still underestimated the knowledge level that they portrayed in that event. That was really encouraging. Was it deep into the regulatory weeds? It was close, as compared to simply knowing the difference between home health and personal care services, which sometimes we consider a victory just when we have that degree of understanding of it.

What we’ve found also is that the personal experiences of the members of Congress are a good educational aspect for them. It used to be that we would try to work with the state associations to set up home care visits for the members of Congress so they could be somewhat understanding of it.

Now, most members of Congress, we’re finding, are having their own personal experience. A family member, a parent, a spouse, a child — the wide range of services — having that kind of direct experience. I think that helps gain some understanding at their end of it as well.

The first goal that we had for the hearing was to raise awareness. I think we did raise the awareness to a greater degree, but it started at a higher point than we thought it was going to.

HHCN: As far as the next steps, are there any tangible things that you want to get done in the weeks after to make sure this momentum keeps going?

Dombi: There are multiple phases to it. Obviously, the legislation that’s pending, it would be great to have that passed. But we’re not putting all our eggs in that basket. We don’t have a budget yet in the United States and we’re nearing Oct. 1. To get legislation passed between now and the end of the year will be a very heavy lift. What we’re looking at is some things that have actually started.

Senator Cardin, for example, put out a letter on his website talking about the hearing and talking about home care to broadcast what took place at the hearing to raise awareness of the need for help beyond that. In addition, we’re getting members of Congress to connect with the CMS administrator, the HHS secretary, and the White House to say, “Look, we may not be able to get done what we’d like to about some reforms in home health, but you can help us by putting a pause on these 2024 rate cuts.” CMS has the power to do that on its own.

Our next prime step really is to get that Congressional support to be used in more than one forum. Not just the legislative passage, but also to convince the regulators to step back from their proposal. We did this last year as well, but we think it’s going to be an even heightened kind of engagement coming from a bipartisan group of senators. It is a Democrat administration, so it’s nice to have Senators Cardin and Stabenow, et cetera, on the Democratic side helping to push the White House into a policy position that says we need to back off for 2024 because we’re losing care to people. It’s not theoretical anymore. It’s real.

HHCN: In terms of the current administration, there’s a lot of talk about investment in home-based care but a lot of that has been geared towards home- and community-based services. Is that something that’s had to come into the education process more about how home health care also needs investment and home health care also needs saving in this case in terms of keeping the cuts away?

Dombi: That is a great point. Candidate Biden on the campaign trail was really pushing for home care and he’s mentioned home care in his two consecutive State of the Union addresses, the first time ever from a president to bring about home care. That focus on home care was home- and community-based services, be it Medicaid or otherwise, and a focus also on the workforce. A focus on the direct care workers and their compensation levels and the waitlists for beneficiaries in Medicaid waiver programs for home care services.

We really need to make sure that interest in care at home extends into other areas like Medicare home health services, hospice care, home infusion therapy and how it goes on further into some of those innovative things that I mentioned earlier on as well. That has been a challenge that we think was somewhat shown to be maybe less daunting with the senators in attendance. They knew the difference between home health services and home care in that discussion.

HHCN: One of the points you made during the hearing is that Medicare Advantage often pays far less for home health services compared to traditional Medicare. Therefore, CMS is, to some extent, subsidizing those plans in paying for home health services. In order for providers to survive, they need a lot of traditional fee-for-service business. Is there any ground being made up on that? What do you hear from lawmakers when you bring up that point?

Dombi: We wish we had the pixie dust to do that in a nanosecond. The generational issue for home health today is that Medicare Advantage is growing. In terms of enrollment, the predictions that came out today — another two million people will enroll in Medicare Advantage for 2024.

The proportion of traditional Medicare and Medicare Advantage for the home health agencies has created financial problems because the plans, by and large, don’t pay the cost. They need the subsidization. Hospitals get subsidization for Medicare Advantage and traditional Medicare shortfalls; this comes from commercial insurance, a revenue stream that really doesn’t exist to any degree in home health services.

We have found when conveying those facts and figures to even the regulators, there’s a bit of surprise that’s there. MedPAC has been aware of this for a while. MedPAC is not supportive of traditional Medicare subsidizing Medicare Advantage, but I haven’t seen a single idea coming out of MedPAC on how we change that without disrupting the system for everybody.

We absolutely are behind an eight-ball with the plans, without any leverage. The home health agencies, yes, can say no to Medicare Advantage referrals of patients, but that’s at their own peril because the referral sources are looking for a place to send these Medicare Advantage patients because they can’t handle them financially either.

We need some way to bridge where we are today to a tomorrow where the plans pay their fair share. It’s a label I’ve been using, ‘their fair share,’ because the evidence is also out there that the plans are getting a darn good bargain in terms of quality care from the home health agencies.

The agencies serve patients as if they’re agnostic, but they are influenced by it because they don’t get the same level of care authorization that they may have the license to do under the traditional Medicare program, but they’re getting very comparable outcomes.

If the plans are going to continue to receive those high-quality outcomes, they need to step up to the plate and work with the home health care community to solve this. It’s very difficult to believe that Congress is going to step in and say, ‘Plans, you’ve got to pay more money to them.’ They may get involved in some sort of access standard.

It’s funny to bring back what Dr. Grabowski said when he was helping us on this one, accidentally maybe. When he talked about the number of home health agencies — two per ZIP code for 98% of the population — he then later said when he was questioned by one of the senators about this, “Well, supply does not always equal access.”

You could have three home health agencies in a network, and that doesn’t mean that you have access to care. This is, like I said, the generational battle. The battle we’re having today with PDGM and the payment rates pales in comparison to what needs to be done as the plans continue to grow.

We haven’t seen everything yet. Typically, the home health patient is in their 70s, 75, and later in their enrollment in Medicare. The plans tend to be on the younger side, the patients. Those younger people, when they age into their 70s, will start tapping into home health. That’s where the proportion becomes very scary unless we solve the financial relationship between the plans and the providers.

HHCN: Many home health providers mention Medicare Advantage plans to maintain the same payment rates for years. Balancing patient care with financial sustainability, they find it challenging to deny MA patients. Considering the dedication to patient care over profit, some feel they’re being taken advantage of. Regarding access, do you believe it’s time to shift from the simplistic notion that more home health agencies per ZIP code equate to better access? Especially after the recent hearing and provider testimonies, shouldn’t our understanding of access be more nuanced?

Dombi: Well, part of the legislation that’s pending, both in the Senate and the House bills (which are identical), requires some reforms within MedPAC analysis and reporting. I actually remember having a conversation with a MedPAC official, and they asked, “Why is it that Congress ignores our recommendations on home health?’” Because they’ve been recommending payment rate cuts much greater than we’ve seen for many, many years.

I had a pretty simple explanation for them: that MedPAC does an unreliable job of assessing access to care and looking at margins on an average basis without considering the range and margins to exclude hospital-based providers of home health services that may be the sole providers in some geographic areas. And then to do, as Dr. Grabowski revealed, a very, I’d have to say, silly test on access. How many providers exist on paper in a ZIP code area?

One of our board members was in Montana. He lives in Montana. He operated in Montana at that time, and lived in a ZIP code that was 25,000 square miles. If you have two home health agencies or one in a 25,000-square-mile ZIP code, what does that mean for access? You could have it as well within metropolitan New York City. There are parts of New York that might have plenty of home health access and parts of New York City that do not have the same access.

There are absolutely issues out there in terms of access to services. I think it may move us towards better information coming out of MedPAC and others as a result, perhaps, of this hearing. That’ll make our job at NAHC harder because we won’t have all the flaws that MedPAC has in its current analysis. When you look at average margins, for example, in terms of defining access to care, we look at the range of margins. We run these reports that show that 20% plus of all providers today have margins below zero on traditional Medicare, let alone way below zero on an overall financial status.

We have providers who have margins in the 40-50% range. Why aren’t we dealing with that issue there? Why isn’t MedPAC centering on how it is that you could have a reimbursement model that distributes payments so poorly that some people could be underwater and other people could have a 40% plus margin? It’s only a few, but it tells you a tale, I think, about just the flaws within a reimbursement system that allows that as an outcome.

HHCN: Even if there were seven providers within a four-block radius if none of them could accept new patients due to financial constraints preventing them from hiring additional staff, resulting in patient rejections, the number of agencies becomes inconsequential.

Dombi: Exactly. You look at [Mary Lanning Healthcare’s home health division]. They went from a 60-mile radius to a 25-mile radius. They still exist as a provider of services, but they’ve cut the patient population that they serve by more than half. That doesn’t translate to access to me. That translates to an access problem.

We presented the data on conversion rates, where 55% of referrals are rejected by the home health agencies for a variety of reasons, staffing, availability included within that. This has been an obvious issue for years that the existence of the home health agency does not mean access. There are hundreds of home health agencies that submit no claims at all in a given year. They’re paper home health agencies rather than operational ones.

HHCN: The hearing went very well. You’re happy about that. October is coming up and that’s obviously when we’re expecting the final rule. What are you expecting right now of that final rule and what are you ultimately hoping comes to fruition between now and, let’s say, Halloween?

Dombi: Let me answer the second question first. Between now and Halloween, we expect a flurry of activity coming from members of Congress, in addition to our grassroots efforts and our internal actions. An army of people is coming together to push closer to the finish line with some positive results. Noise in Washington matters. The more noise we make, translated by way of emails from constituents to Congressional offices, letters to the editor, op-eds in newspapers, and wider media attention, will help us gain some traction.

What does that translate to, and what do we expect? Surprisingly, even to myself, I declared I was a professor of history at the hearing. However, history just 12 months ago indicated to us that this kind of noise has mitigating results. The administration last year took the proposed 2023 cut and split it in half, which is why we’re dealing with some of it now for 2024. CMS has the power to mitigate it or eliminate it completely for 2024. An expectation, actually (and I don’t think this is an irrational expectation because of that historical action and because of the inroads that we’ve made here), would be for CMS to back off the cut, hopefully entirely, but at least in some partial fashion.

You may recall that at the hearing, one of the things we raised was the forecasting error in the inflation update, over 5% between ’21 and ’22. Other health care sectors had the same kind of effect in their forecasting error on that inflation update. We think CMS fully understands that they came up way short in that forecast, and that has an impact today and going forward. While they may not want to address the forecasting error for home health, at least they could back off of the rate cuts.

HHCN: So, it sounds like things are looking up, at least much more than they may have been just a few months ago. Which is great news.

Dombi: No one will ever accuse me of being Pollyannaish. Whether they even accuse me of being an optimist, I don’t know. I’m not trying to put on a phony face of positivity here. I seriously believe there is a good expectation for the mitigation of the cuts. It’s pedal to the metal, though, from our end of it relative to pushing on the advocacy side to try to see that happen.

If that happens, if they back off a portion of the cut for 2024, there’s a lot of work to be done because it’s still hanging over our heads. We really need to get out from underneath this dark cloud of these cuts on a permanent basis.

HHCN: The clawbacks too, obviously. You don’t want that hanging over your head.

Dombi: No. Just envisioning the word “clawback” sounds pretty violent, doesn’t it?