Home Health Providers Must Lean Into Mitigation Strategies To Combat CMS Cuts

Home Health Care News | By Joyce Famakinwa
 
It’s been almost a month since the U.S. Centers for Medicare & Medicaid Services (CMS) released the CY 2024 home health payment rule, and providers and industry stakeholders are still critical of the federal agency’s misconceptions about home health.
 
With cuts coming, operators must lean on mitigation strategies to prepare. That’s one key takeaway from a recent webinar hosted by home-based care technology company Axxess. 
In the wake of the final payment rule, industry players made waves for calling out what they viewed as CMS’ “dismissive” position when it comes to data and evidence provided by home health companies and advocacy groups.
 
Along these lines, some in the industry also believe that CMS has a distorted view of the home health’s profits based on faulty data. 
 
“They have a very clear picture of an industry that they believe is getting significantly overpaid, and is just rolling in the profits, which is why they don’t seem to care about the rate cuts,” Robert Markette, a health law attorney with Hall, Render, Killian, Heath and Lyman, said during the webinar. “Their data doesn’t reflect reality, and their data comes out of flawed cost reporting, primarily, and then whatever MedPAC does to get their numbers.”
 
Markette noted that CMS data paints a picture of reimbursement on Medicare exceeding home health costs by 45%. The federal agency’s data also has home health costs in 2022 decreasing by 2.9%, and average margins across the industry checking in at 24.9%.
 
“Last year, they did not impose the entire permanent cut, which means they’re going to have to consider a temporary cut in the future, and each year they tell us that temporary cut will get larger, and they don’t see that as a problem because they think we’re making these huge profits,” Markette said. “We have to deal with that math problem.” 
 
Although providers are still reacting to the final rule, it’s important to begin strategizing to lessen the impact of potential headwinds…

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Beyond The Cuts: What Else Home Health Providers Need To Know About CMS’ 2024 Final Rule

Home Health Care News | By Patrick Filbin
 
Nearly a month after the U.S. Centers for Medicare & Medicaid Services (CMS) released its CY 2024 final payment rule, the ins and outs of it have become more apparent. And there’s more to delve into than just blanket rate cuts.
 
Aside from the headline-grabbing 0.8% aggregate payment increase and the permanent prospective adjustment of -2.890%, there are dozens of other notable changes to home health care that providers should be aware of.
 
HHVBP program
 
More changes to the Home Health Value-Based Purchasing (HHVBP) model are in order.
More specifically, CMS is attempting to simplify performance scores.
 
“They’ve replaced the two normalized composite measures around self-care and mobility with a discharge function score,” Joseph Brence, head of clinical strategy for MedBridge, told Home Health Care News. “Additionally, the discharge community measure has been replaced with the discharge to community post-acute measure. These changes should make it easier for agencies to understand their performance without waiting for internal performance reports.”
 
Another positive change in value-based purchasing Brence laid out is replacing the acute care hospitalization measure – during the first 60 days of home health use – with the potentially preventable hospitalization measure.
 
By shifting to the latter, CMS is instead putting the focus on hospitalizations and ED usage that a home health agency would have been able to avoid. Today, an agency would be penalized every time a patient goes to the emergency room or is admitted to the hospital.
 
This change is narrowing the focus to what home health agencies can actually prevent, Brence said.
 
“That is a win for home health agencies,” Brence said. “So the attention and changes to how value-based purchasing is assessed does benefit the home health setting.”
 
Wage index, labor portion updates
 
From a revenue perspective, agencies can’t take the 0.8% increase at face value. One of the major updates every year in the final rule is the wage index value updates.
 
The wage index determines Medicare payments for home health services and is part of the calculation used by CMS to adjust payments based on regional variations in labor costs.
The wage index reflects the relative wage levels in the area where a home health agency is located.
 
There are over 450 Core-Based Statistical Area (CBSA) codes that get updated every year.
A majority of those codes — 59% — had a negative change in the final rule. Of those, 22.7% had a negative impact of over 3%.
 
“If you’re looking at agencies that are thinking, ‘Alright, we’re at least going to have a higher rate for next year, so we should be in the black when we do an apples-to-apples comparison,’” Nick Seabrook, managing principal and SVP of consulting at SimiTree, told HHCN. “Well, that might not necessarily be the case, based on the fact that the wage index values are going down.”
 
On the flip side, there were 38% that had a positive change — 10.8% had a change of 3% or higher…

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Home Health Industry Unscathed In Latest CMS Improper Payments Report

Home Health Care News | By Andrew Donlan
 
The Centers for Medicare & Medicaid Services (CMS) released its improper payment report last week. It was another win for the home health industry, which has become less of a culprit in the reports over the years.
 
Overall, the Medicare fee-for-service (FFS) estimated improper payment was 7.38%, or $31.2 million. That was the seventh consecutive year it has been below the 10% threshold established by improper payment statutory requirements, according to the agency.
 
In 2022, the improper payment rate was 7.46%.
 
“While CMS’ improper payments reporting programs are designed to protect the integrity of CMS programs, not all improper payments are fraud or abuse. It is important to understand that improper payments are payments that do not meet CMS program requirements,” CMS wrote in a corresponding fact sheet on improper payments. “They can be overpayments or, underpayments, or payments where insufficient information was provided to determine whether a payment was proper.
 
From 2016 to 2020, home health improper payments decreased by $5.9 billion. Then, in 2020, the industry had a 9.3% improper payment rate. In 2021, it had a 10.24% estimated improper payment rate.
 
In the latest report, home health was not included as one of the sectors contributing most to overall improper payments.
 
Those sectors were skilled nursing facilities, outpatient hospitals, inpatient rehabilitation facilities and hospice.
 
Review Choice Demonstration (RCD) could be helping the home health industry improve on payments, at least in Illinois, Ohio, North Carolina, Florida and Texas.
 
CMS did mention RCD’s expansion within the report.
 
“HHS announced expansion to the Review Choice Demonstration for Home Health Services to Oklahoma, starting December 1, 2023,” the agency wrote. “This demonstration is also ongoing in Illinois, Ohio, North Carolina, Florida, and Texas. It offers Jurisdiction M providers three initial options: pre-claim review, post-payment review, or minimal post-payment review with a 25% payment reduction for all home health services. A provider’s compliance with Medicare billing, coding, and coverage requirements determines their subsequent steps in the demonstration.”

Fact Sheet: Nondiscrimination on the Basis of Disability Proposed Rule Section 504 of the Rehabilitation Act of 1973

U.S. Department of Health and Human Services

The Department of Health and Human Services (HHS) has issued a proposed rule to advance equity and bolster protections for people with disabilities.  The proposed rule, Discrimination on the Basis of Disability in Health and Human Service Programs or Activities, updates, clarifies, and strengthens the implementing regulation for Section 504 of the Rehabilitation Act of 1973 (Section 504), the statute that prohibits discrimination against otherwise qualified individuals on the basis of disability in programs and activities that receive Federal financial assistance or are conducted by a Federal agency.

The historic proposed rule provides robust civil rights protections for people with disabilities in federally funded health and human services programs. It advances the promise of the Rehabilitation Act and helps to ensure that people with disabilities are not subjected to discrimination in any program or activity receiving funding from HHS just because they have a disability.  This proposed rulemaking is consistent with Section 504 statutory text, congressional intent, legal precedent, and the Biden-Harris Administration’s priority of advancing equity and civil rights and protecting Americans’ access to health care and human services programs and activities.  

Read the full Proposed Rule

[The first 50 pages are the rationale and students that support changes that are relevant to in-home providers; Pages 340-400 are the actual proposed rule]

Read a Summary of the Rule