Providers push for payment parity for hospital-at-home programs

When Intermountain Healthcare considers a patient for hospital-at-home care, caregivers assess their living situation. In one case, the evaluation solved a mystery.

The patient felt dizzy and had low blood pressure. He was otherwise in stable condition and a good candidate for hospital-at-home care. Ideally, it could free up bed space at the integrated system’s hospitals and boost his recovery.

During the assessment, Intermountain staff found blood pressure medication that no one knew he was taking. Nurses cleaned up his medication box and got him back on track, said Dr. Nathan Starr, director of home services for Intermountain at Home.

“These are issues we don’t see in the hospital,” said Starr, an internal medicine physician who also leads Intermountain‘s telehospitalist program. “We fundamentally believe in not just preventing readmissions to reduce costs, but investing in a cheaper model of care to produce cost savings that should be shared by more than the health system.”

Many health systems are building out the infrastructure to bring more acute treatment into patients’ homes as they look to free up inpatient capacity, bridge care gaps, improve quality and reduce costs. But their philosophies differ.

Some argue that they have a moral obligation to pass the cost savings on to payers and patients by reducing their charges. Others believe that fewer readmissions and better outcomes will drive cost savings, not necessarily changing what they bill payers.

Mirroring current fee-for-service reimbursement would perpetuate healthcare cost inflation, given that hospital-based care accounts for about a third of the nation’s annual $4.1 trillion healthcare bill, industry observers claim.

About half of the health system executives Modern Healthcare interviewed said they weren’t sure if they would charge insurers facility fees, which are meant to offset hospitals’ costs associated with providing around-the-clock care, stricter licensing and regulations, and specialized equipment. While there are upfront costs to set up the technology and coordinate services for hospital-at-home programs, charging a potentially $1,000-plus facility fee is disingenuous, some experts argue.

“If you are not truly replacing hospitalizations, you are just adding cost to the overall system,” said Starr, adding that Intermountain is designing bundled payments for hospital-at-home care. “This is not a soft landing spot for a patient that an emergency physician is worried about; it’s meant to replace an episode of care with services at home.”

Mayo Clinic, which invested $100 million in Medically Home to scale its hospital-at-home program with Kaiser Permanente, said that it was not currently charging commercial insurers facility fees for its hospital-at-home care. While most of its hospital-at-home patients are Medicare beneficiaries, Mayo is working with the Centers for Medicare and Medicaid Services and commercial insurers to develop sustainable alternative payment models, said Dr. Michael Maniaci, the physician lead for Mayo’s Advanced Care at Home program.

“There is a cost to bring the technology to a patient’s home, set up transportation and the right staffing model, but there is also huge cost savings due to the fact there is no billion-dollar hospital, laundry, electricity, cleaning costs and other overhead,” he said. “But there is no consistent, standard model for electronic billing—it is piecemeal and quite cumbersome.”

Paid in full

The results for hospital-at-home programs have thus far been promising. While many believe that moving more acute care into people’s homes can lower healthcare costs and help patients recover quicker, the ventures’ success hinges upon billing and reimbursement strategies, observers said.

Stable patients recovering from heart failure, gastrointestinal issues, cellulitis, COPD and pneumonia are common hospital-at-home candidates. More progressive health systems are trying out new use cases, potentially delivering significant savings.

“We are in line with the national studies of hospital-at-home care being 20% to 40% cheaper, but getting the same DRG payment as a traditional inpatient stay would mean the cost to payers and patients would be the same,” said Christine Lipson, director of home services at Castell Health, a population health company that Intermountain spun off. “We would want the right flexibility that facilitates lower costs. The waiver doesn’t allow for that.”

Out of Intermountain’s around 700 hospital-at-home patients, the health system hasn’t had any significant safety event that led to a patient “coding,” Starr said. The 30- and 90-day readmission rates have been lower than those discharged from the hospital, and patient satisfaction has surged, he noted.

While the efficacy evidence has been clear, some providers have been reluctant to invest in the technology because reimbursement from commercial insurers has varied.

Many are hoping that a clear sign from CMS will spur change, which is why nearly 50 healthcare organizations, including large health systems like CommonSpirit Health, Ochsner Health and Hackensack Meridian Health, wrote a letter to congressional members advocating for an extension of the hospital-at-home waiver for Medicare beneficiaries. They aim to guarantee payment parity across traditional inpatient and hospital-at-home settings beyond the COVID-19 public health emergency.

Paying hospitals the same rate was the right decision, as COVID-19 overwhelmed hospitals and limited access, said Jeremiah McCoy, a spokesperson for Moving Health Home, the coalition of healthcare companies pushing for the extension. But that is not sustainable and they are advocating for a permanent expansion of the waiver that incorporates lessons learned during the pandemic, he said.

“For example, as part of the permanent program, Congress may want to consider incorporating value-based care components used in other markets and removing barriers to participation experienced with the (Acute Hospital Care at Home) waiver to realize the full benefits of home-based models,” McCoy wrote in an email.

Some health systems pay for acute care at home through their integrated health plan or partner with third parties to mitigate the financial risk. CommonSpirit and others have adopted bundled payments, where hospitals take on the financial risk and would be rewarded for improved outcomes, at less cost to health plans and employers.

CommonSpirit partners with Contessa to help coordinate its hospital-at-home care. The patient has access to 24/7 telehealth visits with caregivers, virtual check-ins with physicians and two daily in-person visits with nurses.

The 140-hospital system offers infusions, phlebotomy, imaging and constant remote monitoring, among other services. Then-Dignity Health’s hospital-at-home program started in 2019 as a value-based initiative with private payers serving Medicare Advantage beneficiaries, said Robin Shepherd, the chief nursing officer for CommonSpirit’s southwest division. The provider has since pushed to change legislation in Arizona and partner with the state’s health department to add more Medicare codes for acute home-based care.

“Hopefully we can expand that care under the Medicare fee-for-service waiver, with the ultimate goal of entering value-based arrangements across a range of payers,” she said. “We see this as an innovation in healthcare access—not only does the patient get a level of care consistent with hospital-level care, it also frees up inpatient beds for other patients.”

Intermountain, which started its hospital-at-home program in 2020, chose not to pursue the waiver because it makes providers replicate the hospital experience, limiting its cost effectiveness, Lipson said.

For instance, the waiver requires hospitals to prepare and deliver the meals it would offer in the hospital even though patients prefer eating their own food, she said.

“We want to push beyond that 20% to 40% cost-saving benchmark,” Lipson said. “As our CEO believes, we need to find ways to reduce the cost of care.”

Some providers have charged facility fees associated with telehealth, justifying it based on the doctor’s location. The fee, which can add hundreds of dollars or more to a patient’s bill, shouldn’t be levied on patients who don’t receive care in hospitals, patient advocates argue.

Hospital facility fees have been the sticking point of site-neutral payment policies, where hospitals argued that their outpatient departments—unlike independent physician offices—should be able to charge a facility fee to offset their respectively higher overhead. That argument hasn’t held up in court.

“We feel pressure to realize the potential of this model because it truly can change healthcare,” Lipson said.

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Thinking big

The COVID-19 pandemic accelerated the adoption of home-based, acute care as hospitals reached capacity.

Philadelphia-based Jefferson Health enrolled about 600 COVID-19 patients in its emergency department at-home program. About three-quarters of the patients had successful follow-up visits at home without any additional intervention.

In the future, Jefferson would like to treat higher-acuity patients at home, but given the fragmented reimbursement system and underdeveloped regulatory framework, that program is best suited for observation-level patients, said Stephanie Conners, Jefferson’s chief operating officer.

“It is going to take a major shift in the mindset of payers and regulators to enable us to do this at the scale we can do it,” she said.

The regulations for hospital-at-home programs are lacking, Mayo’s Maniaci said. There should be more guidance as to the scope of practice for advanced practice practitioners, traveling nurses and paramedics, he said.

“There are different licenses for each state. Why can’t there be a national license?” Maniaci asked. “That’s why we’re partnering with academic institutions so we can come up with a set of rules to weed out bad actors.”

Cost and staffing have also been barriers, experts said. The startup expenses are often more than anticipated, said Cheryl Warren, senior managing director at FTI Consulting.

“The programs I have seen set up are so costly from the standpoint of staffing, equipment and the sheer burden of receiving calls from patients 24/7,” she said.

“Staffing is the No. 1 issue right now, and you can’t just hire a home health agency to provide acute-level inpatient care without any additional training,” said Monica Hon, vice president at healthcare consultancy Advis.

Those costs will likely come in the form of a facility fee, be baked into alternative payment models or result in a higher, place-of-service differential for the non-facility fees, like there is now with the resource-based relative value scale physician fee schedule, industry observers said.

Jefferson and Hackensack Meridian Health, which recently set up a hospital-at-home pilot program in Edison, New Jersey, don’t know if they would charge a facility fee, executives said.

“Hospital-at-home programs can really help in terms of improved outcomes and enhanced patient experience, which have the potential to bend the cost curve and make healthcare more affordable,” Hackensack CEO Bob Garrett said.

“Until we have established payment and reimbursement structures, there remains a lot of unanswered questions,” Jefferson’s Conners said.

Outlook

While the technology, reimbursement and regulatory framework is in its infancy, hospital-at-home programs are expected to grow.

Use cases are evolving. Mayo, for instance, has been testing out the use case for bone marrow transplant patients, kidney transplant patients and knee surgery rehabilitation.

Mayo’s hospital-at-home patients’ 30-day mortality rate is less than 1%, which is less than the average national inpatient mortality rate of between 2% and 3%, Maniaci said. Its hospital-at-home program has a 30-day readmission rate between 8% and 12%, while the national average is around 20%. Patient satisfaction for those patients is between 92% and 95%, he said.

“We’re trying to quantify the value equation—what is the value for opening up a bed for an advanced chemotherapy patient or the savings of reducing ED visits,” Maniaci said.

More health systems are interested in hospital-at-home and remote monitoring devices, particularly diagnostics, equipment manufacturers and distributors said.

Equipment designed for in-office use tends to be much more robust, whereas equipment for the home, especially around diagnostics, is designed around cost, convenience and simplicity, said Mike Casamassa, vice president of solutions and planning for medical equipment supplier Henry Schein Medical.

“We expect this market to shift dramatically in the next couple of years,” Casamassa said.

Hackensack, similar to other systems, is in discussion with national vendors that have partnered with other providers on hospital-at-home programs, Garrett said.

“We see that as a pathway to scale the model to commercial payers,” he said. “Once you get some experience, you can certainly gear up not just outside of Medicare, but expand the program to patients with more complex issues.”