The CMS' proposed payment rule for home health agencies is under fire from the industry and advocates who say it will put an unwarranted financial burden on providers and threaten patient access to care.
The proposed 2016 home health prospective payment system includes the third year of a four-year rebasing of the standardized 60-day home-care episode rate under the 2010 healthcare reform law. The phased-in reductions were designed to recover several years of excess payments.
The draft rule, released earlier this year, also called for an additional 1.72% cut to the standard episode rate in 2016 and 2017 to reflect what CMS said was lower-than-expected growth in case severity, the so-called case-mix index. The agency concluded that providers billed Medicare for delivering services at rates that surpassed the actual growth in patient acuity.
The rule would slash Medicare home health costs by $350 million next year. The agency received over 100 comments on the proposal. The final rule is due in November.
The proposed rule has rattled an industry wrestling with its potential implications for patient access. In their comments, major players like Kindred at Home, a division of Kindred Healthcare, which represents 412 home health sites in 41 states, accused CMS of using outdated data to reach its 1.72% proposed reduction.
“We believe the data and rationale behind the case-mix cut is unsound,” Kindred said in its comments. “Rather than supporting the development of home health services that is instrumental to new care models, the proposed case-mix adjustment would serve to erode the base to the detriment of future home health needs.”
The chain said its internal analysis of more than 678,000 patients served over four years found patients initiating care in 2014 had greater needs for ambulation, transferring, grooming, and toilet transferring aid than patients starting care in 2011.
Dignity Health also rejected CMS' analysis. “Home health agencies must have the resources to build infrastructure for data- and information-sharing and internal quality improvement efforts,” the health system said. “The significant cut to reimbursement may prevent some HHAs from taking the more medically complex patients and shifting them to higher levels and more expensive care.”
Some providers are already dropping out of the program. CMS estimated there were 349 fewer home health agencies caring for Medicare beneficiaries in July than the 11,781 in the program last year.
Senior citizen advocates are also concerned about the value-based purchasing demonstration project included in the proposed rule. Similar to the rewards and penalties given hospitals based on their performance on a suite of quality indicators, the home health agency program would apply a 5% annual payment reduction or increase to agencies in nine randomly selected states. The payment adjustment would increase to 8% in later years.
“We are concerned that the demonstration could reduce access to home healthcare for some beneficiaries, either because HHAs leave the market and there is not sufficient supply, or because HHAs avoid beneficiaries whom they think will reduce their performance scores,” AARP said in its comments.
The Medicare Payment Advisory Commission has also called for adjusting the demonstration project. The advisory body believes the CMS should lower the number of quality measures to make the program simpler to administer and to focus operators' attention on issues of most importance to beneficiaries.
“The proposed model includes too many quality measures, diluting its focus and increasing the burden of operation,” MedPAC said.
