In the News

2023 Home Health Final Rule Released

The 2023 Home Health Final Rule was released yesterday, making it a scarier than usual Halloween. The news, which was originally heralded by some news outlets as a victory for home health, is not as great a cause for celebration as first purported. APTA Home Health will have a deeper analysis of the rule in the next House Call, but below is a quick analysis.

The overall permanent adjustment is worse than proposed (i.e., 7.85% vs. 7.69%). However, to help mitigate the impact of the cuts during the first year of implementation, the 2023 cuts will be 3.925% (half of the full cuts). That's the bone that CMS is throwing the industry. Additionally, the Market Basket update (MB) was increased by .7% to 4.0% instead of the proposed increase of 3.3%.

Bottom Line:  We got some relief for calendar year CY2023 only (but they increased the overall permanent adjustment from 7.69 to 7.85%) and the temporary adjustments (“clawback”) still loom. CMS has NOT changed their methodology regarding behavioral assumptions at all. Without further legislation, this rule will set in motion massive cuts that will have long term negative consequences for HH.

However, this is far from being over. There will still be a push for legislation and an omnibus bill to stop the clawback following the national elections and before the end of the year and moving into 2023 if necessary – which is the most likely scenario.

Important text from the rule:

“…we are finalizing our proposed behavioral adjustment methodology to reflect the impact of differences between assumed behavior changes and actual behavior changes on estimated aggregate payment expenditures under the HH PPS. We are also finalizing a -3.925 percent permanent payment adjustment for CY 2023 (half of the proposed - 7.85 percent adjustment), as we recognize the potential hardship of implementing the proposed full permanent adjustment in a single year…

“The overall economic impact related to the changes in payments under the HH PPS for CY 2023 is estimated to be $125 million (0.7 percent). The $125 million increase in estimated payments for CY 2023 reflects the effects of the CY 2023 home health payment update percentage of 4.0 percent ($725 million increase), an estimated 3.5 percent decrease that reflects the effects of the permanent behavioral adjustment (-$635 million) and an estimated 0.2 percent increase that reflects the effects of an updated FDL ($35 million increase)…

“. . . we considered other potential methodologies recommended by commenters to determine the difference between assumed versus actual behavior change on estimated aggregate expenditures in response to the comment solicitation in the CY 2022 HH PPS proposed rule (86 FR 35892). However, most of the recommended alternate methodologies controlled for certain actual behavior changes (for example, the reduction in therapy visits or LUPA visits) and this is not in alignment with our interpretation of the statute at section 1895(b)(3)(D)(i) of the Act, which requires CMS to examine actual behavior change and make temporary and permanent adjustments to the standardized payment amounts…

“Therefore, any method that would control for an actual behavior change affecting payment would be contrary to what is required by the Social Security Act. Additionally, we considered alternative approaches to the implementation of the permanent and temporary behavior assumption adjustments. As described in section II.B.2. of this rule, to help prevent future over or underpayments, we calculated a permanent prospective adjustment of - 7.85 percent by determining what the 30-day base payment amount should have been in CYs 2020 and 2021 in order to achieve the same estimated aggregate expenditures as obtained from the simulated 60-day episodes and are finalizing half of the determined adjustment which is - 3.925 percent for CY 2023. One alternative to the -3.925 percent permanent payment adjustment included taking the full -7.85 percent adjustment for CY 2023. However, due to the potential hardship to some providers of implementing the full -7.85 percent at once, we decided it would be more appropriate to take half the adjustment resulting in a -3.925 percent permanent payment adjustment for CY 2023…

“However, we note the permanent adjustment to account for actual behavior changes in CYs 2020 and 2021 should be -7.85 percent. Therefore, applying a -3.925 percent permanent adjustment to the CY 2023 30-day payment rate would not adjust the rate fully to account for differences in behavior changes on estimated aggregate expenditures during those years. We would have to account for that difference, and any other potential adjustments needed to the base payment rate, to account for behavior change based on data analysis in future rulemaking. Another alternative would be to delay the full permanent adjustment to a future year. However, we conclude that delaying the full permanent adjustment would not be appropriate, as this would further impact budget neutrality and likely lead to a compounding effect creating the need for a much larger reduction to the payment rate in future years.”

We’re still in this fight and member advocacy will continue to be as important as ever! Voices need to be heard when methodology is being applied improperly at the expense of patients/clients and those who serve them, and all of our voices count. The responsibility of advocacy can't be left to the administrators of agencies only. Stay tuned! 

 

APTA CSM Rates & Registration

2023 APTA Combined Sections Meeting - February 23-25, 2023 | San Diego, California

Register by Nov. 9 for the best rates. You'll also be entered for a chance to win a $250 Visa gift card, courtesy of HPSO, and more prizes. View complete list of prizes and contest rules. Don't wait to reserve your room.

Students: Explore two exciting opportunities:

Deferred Registrants: Due to Omicron, APTA offered APTA CSM 2022 registrants the opportunity to shift their in-person registration to On Demand 2022 with CEUs or to in-person APTA CSM 2023 in San Diego. Those who deferred will be automatically registered for APTA CSM 2023 with the same registration type as selected for APTA CSM 2022 and will receive a confirmation email within 30 days of registration opening in mid-September. After the confirmation is received, registrants can make additions, such as preconference courses and ticket purchases (cancellations aren't allowed). Look for an email sent Aug. 30 for additional details.

Questions? Contact MCI, APTA's registration partner, at 800-809-9565 or [email protected]

Cancellation Deadline and Policy: Cancellation requests for preconference and/or full conference registrations received by January 23, 2023 will receive a full refund minus a $60 administration fee. There will be no refunds for no-shows or cancellations after January 23, 2023. Cancellation requests must be submitted in writing to the APTA Registration Center, [email protected].

 

Fixing the ‘Toxic’ Home Health-Medicare Advantage Relationship

Home Health Care News | By Andrew Donlan

The home health industry’s battle with Medicare Advantage (MA) plans for fair rates has gone from a few stakeholders saying “the quiet part out loud” earlier this year to nearly every major provider in the country talking about the issue with regularity.

My colleagues and I have covered the topic extensively. But we’ve moved beyond the question of how providers feel about MA rates for home health and moved onto the next: How can the problem be solved?

Taking a step back, here are a few of the certainties we know:

  • All signs point to MA being the dominant insurer type among Medicare beneficiaries by the end of the decade.
  • MA pays far lower rates for home health services compared to fee for service (FFS). Encompass Health Corporation (NYSE: EHC) said this week that MA rates are at a 40% “discount” compared to FFS. Intrepid USA Healthcare Services confirmed that number was about in line with its experience – and even suggested the rates were sometimes lower than that.
  • Two companies with significant market share in MA – Humana Inc. (NYSE: HUM) and UnitedHealth Group (NYSE: UNH) – have already – or are in the process of – acquiring two of the largest home health providers in the country in Kindred at Home and LHC Group Inc. (Nasdaq: LHCG), respectively.
  • Some have described MA as the federal government’s “darling.” But the Office of Inspector General (OIG) recently published a report condemning MA organizations for limiting beneficiaries’ access to necessary care and denying payments to providers for services that are covered under Medicare and MA billing rules.

“It’s been a challenge because, not only is the rate lower, but the processing of the claims is 6 to 8 times harder for your back office revenue cycle,” Intrepid USA CEO John Kunysz told me. “They just put in so many hurdles.”

Based in Texas, Intrepid USA providers home health and hospice services, with over 60 locations spanning across 17 states.

In this week’s exclusive, members-only HHCN+ Update, I explore the tumultuous relationship between the home health industry and MA, and also try to highlight some potential solutions for the road ahead.

 

Notice of Proposed Rule: Employee or Independent Contractor Classification Under the Fair Labor Standards Act, RIN 1235-AA43

On October 13, 2022, the U.S. Department of Labor published a Notice of Proposed Rulemaking (NPRM) to revise the Department’s guidance on how to determine who is an employee or independent contractor under the Fair Labor Standards Act (FLSA). The NPRM proposes to rescind a prior rule, Independent Contractor Status Under the Fair Labor Standards Act (2021 IC Rule),  that was published on January 7, 2021 and replace it with an analysis for determining employee or independent contractor status that is more consistent with the FLSA as interpreted by longstanding judicial precedent. The Department believes that its proposed rule would reduce the risk that employees are misclassified as independent contractors, while providing added certainty for businesses that engage (or wish to engage) with individuals who are in business for themselves.

The initial deadline for interested parties to submit comments on the NPRM was November 28, 2022. On October 26, 2022, the Department published a notice in the Federal Register, extending the deadline to submit comments by 15 days. The Department encourages interested parties to submit comments on this proposal by December 13, 2022 (the new deadline). The full text of the NPRM, as well as information on the deadline for submitting comments and the procedures for submitting comments, can be found at Federalregister.gov. The NPRM’s comment period closes at 11:59 p.m. ET on December 13, 2022.

Anyone who submits a comment (including duplicate comments) should understand and expect that the comment, including any personal information provided, will become a matter of public record and will be posted without change to www.regulations.gov. The Wage and Hour Division posts comments gathered and submitted by a third-party organization as a group under a single document ID number on www.regulations.gov, including any personal information provided.

 

Revised Guidance for Staff Vaccination Requirements

The Centers for Medicare & Medicaid Services (CMS) released QSO-23-02-ALLRevised Guidance for Staff Vaccination Requirements. CMS is revising its guidance and survey procedures for all provider types related to assessing and maintaining compliance with the staff vaccination regulatory requirements.

To learn more and view the memo, visit the Policy & Memos to States and Regions website

 
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