'We Can't Compete' if Behavioral Cuts Continue, Home Health Providers Tell CMS
McKnight’s Home Care | By Diane Eastabrook
A routine Centers for Medicare & Medicaid Services webinar Wednesday with home health providers put the CMS on the hot seat over an upcoming behavioral adjustment for home health next year.
During the virtual overview of the proposed home health final rule, agency owners and stakeholders excoriated CMS Home Health and Hospice Division Director Brian Slater over the 7.85% behavioral cut, which partially went into effect in the current year. They argued the second half of the cut should be shelved due to rising inflation and labor costs.
It doesn’t seem like the rate update addressed all the massive cost increases that have been occurring since 2021 and even in 2022,” Steven Landers, MD, president and CEO of Visiting Nurses Association Health Group, said during a question-and-answer session following the presentation. “For example the IRS mileage rate that we use to reimburse our clinicians — and home health clinicians drive tens of millions of miles a year — went up 12% from last year to this year. Labor costs for nurses and home health aides are up and in some places you can’t even find folks.”
In January, CMS implemented a 3.925% behavioral rate cut, a $635 million decrease, for calendar year 2023. The reduction represented half of the full permanent adjustment of -7.85%. Slater explained that an actuary estimates the costs of inputs that will help determine home health rates and CMS “adopts what number” the actuary puts forward.
Partnership for Quality Home Healthcare CEO Joanne Cunningham urged CMS officials following the presentation to get more robust information about how rising inflation and staff shortages are affecting home health agencies. Cunningham told McKnight’s Home Care Daily Pulse staffing shortages due to rising labor costs are making it harder for hospitals to release patients to home health, driving up overall healthcare costs.
"We are seeing a larger percentage of home health firms increasingly denying cases,” Cunningham said. “We are seeing an uptick each quarter of home health agencies that are not able to take those cases largely because of staff.”
The National Association for Home Care & Hospice weighed in on the webinar. It criticized CMS for failing to demonstrate how changes in provider behavior affected spending under the Patient-Driven Groupings Model (PDGM) and the calculation of revised payment rates for calendar year 2023.
“CMS must withhold any further rate cuts to avoid the flaws of PDGM combining with uncontrolled cost inflation to destroy access to one of the few Medicare benefits that brings savings to the Medicare program,” NAHC President William Dombi said in a statement.
Cunningham said imposing the additional cut would not be a “wise policy position” given constraints on home health agencies already. However, she was doubtful CMS will shelve the cut.
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President Biden: Home Health Care ‘Extends Lives’ And Is ‘Less Expensive’
Home Health Care News | By Andrew Donlan
Home-based care is arguably getting more attention from the U.S. president now than it ever has before.
So much so, in fact, that home health providers and advocates may start looking at President Biden himself as an ally in their fight against payment rate cuts from the Centers for Medicare & Medicaid Services (CMS).
Biden’s comments during an event celebrating the 13th anniversary of the Affordable Care Act included more support for home health care and its ability to increase patient satisfaction while reducing costs.
“People with disabilities could lose access to home health care and, with it, the ability to stay in their homes — which, by the way, shows it extends life of the people,” Biden said, ribbing his Republican counterparts. “People would much rather stay, if they could, just with a little bit of help in their own homes rather than go to a home. And it’s less expensive.”
Under Biden’s appointees in the Health and Human Services (HHS) department, however, CMS did implement a rate cut to home health Medicare payments in 2023, and plans to implement another one in 2024.
On the Medicaid side, though, the Biden administration has tried to commit more dollars to home- and community-based services (HCBS). The administration’s 2024 proposed budget, announced earlier this month, included $150 billion for HCBS over the next 10 years.
“Medicaid also pays for nursing home care for about two thirds of all Americans who live in nursing homes,” Biden said Wednesday. “Well, it’d be different if they were able to stay home.”
The $150 billion would support both state Medicaid programs and the caregivers conducting the care. HHS Secretary Xavier Becerra said it would help the U.S. recruit the next 1.3 million additional home care workers that the country needs “to meet the rising demand in America.”
Whether it’s through Medicare or Medicaid, home-based care does seem to be in Biden’s favor. |
Senate Votes to Overturn COVID-19 National Emergency Order
Roll Call
Biden opposed measure but plans to sign it, White House official says
The Senate voted Wednesday to terminate a COVID-19 pandemic national emergency order implemented by former President Donald Trump in 2020 that was due to be terminated in May anyway.
The 68-23 vote on the measure came after the House voted 229-197 in February, with 11 Democrats joining 218 Republicans in support.
A statement of administration policy issued in January that covered House measures to end both the national emergency and a related public health emergency said "an abrupt end to the emergency declarations would create wide-ranging chaos and uncertainty throughout the health care system — for states, for hospitals and doctors’ offices, and, most importantly, for tens of millions of Americans." It did not, however, include a direct veto threat if Congress passed the measures.
President Joe Biden will sign the resolution, even as the White House continued to say he is opposed.
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MEDPAC Recommends Substantial Reduction to Home Health Payments
The Health Group, LLC
MedPAC’s March 2023 Report to Congress included the following recommendation:
“Our review of payment adequacy for Medicare home health services indicates that access is more than adequate in most areas and that Medicare payments are substantially in excess of costs. Home health care can be a high-value benefit when it is appropriately and efficiently delivered. Medicare beneficiaries often prefer to receive care at home instead of in institutional settings, and home health care can be provided at lower costs than institutional care. However, Medicare’s payments for home health services are too high, and these excess payments diminish the service’s value as a substitute for more costly services. On the basis of these findings, the Commission recommends that, for calendar year 2024, the Congress should reduce the 2023 base rate by seven percent (7%)."
The recommendation is largely justified by MedPAC on the basis that in 2021 the average cost of a thirty (30) day episode of care decreased by 2.9%, Medicare’s payment per in-person visit increased by 17.6%, and the Medicare margin for freestanding agencies averaged 24.9%, a historical high.
MedPAC acknowledges that home health care can be provided at lower costs than institutional care; however, the excess payments diminish the service’s value as a substitute for more costly services.
Amazingly, the number of home health agencies continues to decline as follows:
- 2018 11,699
- 2019 11,569
- 2020 11,556
- 2021 11,474
Since 2013, the number of home health agencies has decreased by over 10%. In fact, not only have the number of agencies declined, the number of Medicare fee-for-service (“FFS”) beneficiaries using home health services has declined as well. MedPAC describes the reduction as follows:
“More Medicare beneficiaries are enrolling in Medicare Advantage, reducing the demand for FFS Medicare services. In addition, aggregate and per capita hospitalizations, which are a common source of referrals to home health care, have declined in recent years.”
The Report briefly discusses the increase in the use of telehealth services. CMS is now requiring agencies to report telehealth services.
In 2023, CMS implemented a permanent reduction to the thirty (30) day period base rate of 3.925%, half of the amount calculated to maintain budget neutrality. Even if the base rate is reduced by an additional 3.925%, MedPAC believes additional decreases to the base payment rate are needed due to the margins being reported by agencies.
The MedPAC Report is available here. |
New Research Shows Hospice Care Reduces Medicare Costs - Member Toolkit
Joint Letter from NAHC and NHPCO
Dear Friends,
We are writing to you together as leaders from NAHC and NHPCO to let you know about important new research conducted by NORC at the University of Chicago that shows patients’ use of hospice care contributed to $3.5 billion in Medicare savings in 2019. This confirms what many of us have always believed – that hospice not only improves the lives of patients and their families, but also provides excellent value for the taxpayer.
The report, the Value of Hospice in Medicare, is the most comprehensive analysis of administrative and enrollment claims data for patients in Medicare and Medicare Advantage. It will be published tomorrow, March 22, at 5 a.m. ET, and we wanted to give you a sneak peek.
Key findings from the report include:
- Medicare spending for those who received hospice care was $3.5 billion less than it would have been had they not received hospice care.
- Hospice is associated with lower Medicare end-of-life expenditures when hospice lengths of stay are longer than 10 days.
- Hospice stays of six months or more result in savings for Medicare.
- Hospice care is associated with increased satisfaction and quality of life, improved pain control, and reduced physical and emotional distress.
Again, the report will go live tomorrow morning at 5 a.m. ET. At that point, you will be able to find a full suite of resources at: www.nahc.org/hospiceworks or www.nhpco.org/hospiceworks, including:
- Full Report: Value of Hospice in Medicare, March 2023
- Joint NAHC/NHPCO press release, March 2023
- Executive Summary: Value of Hospice in Medicare, March 2023
- Report Slides: Value of Hospice in Medicare, March 2023
- Infographic: The Value of Hospice: Better Care, Lower Cost
- Member Toolkit (NAHC and/or NHPCO members only)
The toolkit includes a sample letter to the editor, sample social media posts, and more, so you can help spread the word about the Value of Hospice. We encourage you to read the included materials carefully and determine how best you can make use of them for your organization and for the millions of Americans who depend upon and provide hospice care.
Warm regards,
Ben Marcantonio, NHPCO Interim CEO
Bill Dombi, NAHC President
Additional Resources:.
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