Providers Take Aim at Proposed Home Health Medicare Cuts, Hospice SFP in CMS Comments

McKnight’s Home Care | By Liza Berger
 
Presenting detailed arguments about the impact of a 2.2% Medicare payment cut on the home health industry, providers asked the Centers for Medicare & Medicaid Services to not implement temporary or permanent behavioral adjustments next year.
 
“We strongly recommend that CMS … withhold any such adjustments in 2024 to provide the opportunity for a full and deep review of the direction of the home health benefit, its impact on access to care and options to preserve a longstanding benefit …,” the National Association for Home Care & Hospice said in its 36 pages of comments to CMS.
 
All the major home care associations and many individual providers and supporting firms weighed in on the controversial proposed rule. Comments were due to the agency on Tuesday.
 
At issue is the total 2.2% Medicare payment reduction proposed for 2024. This includes a 5.653% permanent cut to Medicare’s home health agency rates. The latter follows a 3.925% permanent reduction put in place for 2023.
 
Providers argued that this loss in Medicare funds hurts access to home health. One reason: Agencies must reject cases due to staffing shortages, and the industry already is struggling with this problem thanks to the COVID-19 pandemic. LeadingAge in its comments cited a CarePort survey that found that there was a 40% increase in home health agency referral rejection rates between its 2022 and 2023 reports. And Homecare Homebase reported that the percentage of referral rejections due to the staffing shortage rose from 3.8% at the beginning of 2020 (when the Patient-Driven Groupings Model payment system was implemented) to 12.1% at the beginning of 2023.
 
“The staffing crisis is a perfect storm — the competition for staff has never been stiffer due to the pandemic,” LeadingAge said in its comments. “Home health agencies had difficulty competing for staff with hospitals, insurance companies and other opportunities prior to the pandemic; that competition is even fiercer now. The continued downward pressure on payment could not come at a worse moment — the result is going to be decreased access to care, especially for those who need it most.”
 
The Partnership for Quality Home Healthcare, which represents home health agencies, echoed these concerns in its comments.
 
“CMS must assess the on-the-ground realities for patients, clinicians and HHAs and finalize a 2024 HH PPS that allows the sector to stabilize, rather than perpetuating a downward spiral,” the Partnership said. “Finalizing the rule as proposed will continue the demise of the home health benefit, to the detriment of beneficiaries, particularly the most vulnerable.”
 
Rate cuts over the years have resulted in home health agency closures, reduced service areas, reduced admissions and reduced scope of services, NAHC said. Home health agencies with current negative Medicare margins would face significant financial difficulties in absorbing the proposed additional 5.653% rate cut for 2024. Some 52.7% of freestanding home health agencies would be “underwater” with overall margins below 0% assuming no change in costs compared to 2022, according to NAHC.
 
Providers also pointed out that Medicare helps to subsidize programs that don’t pay as handsomely, namely Medicaid and Medicare Advantage.
 
“Changing payment rates in traditional Medicare has a ripple effect on the entire patient population of an HHA,” NAHC said. “That is particularly the case when the other payers are highly unlikely to step up and improve their payment rates as we have here in home health with Medicare Advantage and Medicaid, both having rate setting power that is sanctioned by CMS.”

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Why Accurate Cost Reporting Could Be Key To Higher Rates In Home Health Care

Home Health Care News | By Patrick Filbin
 
Regardless of what the U.S. Centers for Medicare & Medicaid Services (CMS) decides to do with its home health final payment rule, industry experts believe providers need to drastically improve their cost reporting data.
 
“CMS seems to think there are too many of us and we’re making too much money,” Robert Markette, an attorney with the law firm Hall, Render, Killian, Heath & Lyman, said during an Axxess panel. “If you look at the data they’re relying upon, we’ve somewhat done that to ourselves with cost reporting. The reason they think we have a 45% profit margin, which is essentially what they’re saying, is because our cost report data is off.”
 
Prior to the implementation of PPS at the turn of the century, home health providers were accustomed to spending months on cost reports. At the time, providers would have to submit accurate data and were paid based on those cost reports.
 
Because of that, home health agencies got accustomed to spending a lot of money on those cost reports to make sure they were accurate and thorough.
 
“What happened with PPS is that CMS came out and said, ‘Well, you still have to submit cost reports, but we’re really not going to look at the data,’” Arlene Maxim, SVP of clinical services with Axxess said on the panel. “Well, they have done something. MedPAC now takes that data from the cost reports and gives that to Congress. Therein lies the problem.”
 
Over the years, Maxim said she has seen providers cutting corners firsthand when hiring accountants to put together cost reports. As the industry has evolved and demand has risen, those cost reports have taken a back seat to other operational priorities.
 
Now is the time to change that, she said.
 
“I believe that’s where our industry has gotten ourselves into a major problem,” Maxim said. “I think we’ve looked at the cost of preparing cost reports and have not looked ahead to what might possibly happen as a result of that. CMS is seeing a huge range of profit margins. I work with a lot of agencies and I know no one who is working at a 45% margin, let alone 5%. That would be generous.”
 
To make sure CMS is getting as clear of a profit picture from agencies, Maxim said hiring CPAs and other legal and financial experts with experience in the home health space is critical moving forward.
 
At the same time, Markette believes CMS is too far removed from the actual day-to-day realities of home health and hospice care.
 
“CMS still views hospice like it’s 1979,” he said. “With a lot of this stuff, they don’t understand that our cost structure today is not the same as it was in 1985. And yet, when we cry poor, they don’t believe us.”
 
Some of that onus is still on the providers, however.
 
“We have failed to give them good data,” Markette continued. “They rely on the cost report. When they look at our cost reports, they see an industry whose data shows our costs aren’t real.”
 
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How Emerging Hospice Regulations Could Impact Providers

Hospice News | By Holly Vossel

Increased hospice oversight aimed at curbing fraud in the industry could come with a mixed bag of financial and operational impacts for providers.

The U.S. Centers for Medicare & Medicaid Services (CMS) has honed in on hospice program integrity, rolling out a swath of new measures to reduce fraud, waste and abuse in the space. During the past two years, CMS has introduced new regulations, updated survey process, increased auditing activity and enhanced reviews of providers’ claims, patient eligibility and quality data.

Hospice regulation has taken a winding path in recent years, representing both a push and pull in terms of quality hospice care delivery, according to William Dombi, president of the National Association for Home Care & Hospice (NAHC).

“Hospice has come under increasing fire over recent years, initially from reports about hospices that perform poorly on health and safety standards and endanger vulnerable patients, and more recently with respect to dramatic growth in the number of hospice providers in some western states that have raised program integrity concerns,” Dombi said in a statement emailed to Hospice News. “All concerned have a part to play in addressing these concerns.”

Patient safety concerns came to the forefront in hospice in 2019 following a report from the U.S. Department of Health and Human Services Office of the Inspector General (OIG). The report rocked the industry when it found that roughly 20% of hospices surveyed by regulators or accreditors between 2012 and 2016 had a deficiency that posed a serious safety risk.

Meanwhile, a swathe of newly licensed providers emerged in Arizona, California, Nevada and Texas that have caught the attention of regulatory watchdogs. Evidence suggests that potentially hundreds of these hospices were established with the purpose of selling the license at a profit or committing fraudulent acts. In some instances, multiple hospices have been operating out of the same address without a corresponding increase in the population of eligible patients.

The proliferation of new hospices being “flipped” for profit prompted new regulations to address these concerns. CMS in its proposed home health rule for 2024 introduced a requirement that would prohibit hospice owners from selling their businesses within 36 months of Medicare enrollment to curb illegal or unethical activity.

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Medicaid HCBS Fails to Promote Patients’ Independence, Study Finds

McKnight’s Home Care | By Adam Healy
 
A senior in HCBS care is comforted by a family member
Home support services are intended to help patients live independently in their communities, but new research has found that it may actually have the opposite effect.
 
The reason, according to the Health Affairs study, is that home- and community-based services (HCBS) are predominantly based on fee-for-service (FFS) payment models, which prioritize quantity, and not quality, of care. Specifically, FFS models reimburse providers based on the number of hours of service they provide. As a result, many patients and providers rely on home-based services that promote dependence on caregivers. Value-based models, on the other hand, incentivize care quality, according to the study, which can promote independence. 
 
“Medicaid HCBS is stuck in a fee-for-service world that rewards more hours instead of the outcomes that matter most to beneficiaries — namely, independence and community inclusion,” the study said. “In fact, HCBS providers are disincentivized to support independence, as it reduces billable hours and provider payments.”
 
One way to fix this problem is to invest in supports that allow patients to live without reliance on caregivers. More than 80% of FFS expenditures for high-cost HCBS users go toward in-person support services, and less than 1% is for home modifications and other technology that encourages independence, according to the study. Shifting this ratio will reduce billable hours and better integrate people into their communities. As examples, durable medical equipment such as bathroom hand rails, assistive technology like dressing aids, and wearable devices like fall detectors help people live independently — a cheaper alternative than some personal caregiver services.
 
Spending on long-term services and supports has gradually shifted away from institutional care toward HCBS. Ultimately, to create a system that promotes independent living, the researchers recommend utilizing person-centered, value-based models that focus on quality measures rather than billable hours.
 
“It will take time for the HCBS system to embrace an independence first approach,” the study said. “We must start now to rebuild a system where independence and community integration is prioritized, supported, valued and rewarded.”