In The News

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.”

 

Veterans Affairs Community Care Network Update

For those contracted with TriWest to serve veterans in VACCN Region 4, the claims processor had a programming issue that is causing some claims to be paid at 75% of the billed amount. The HCAOA VA Advisory Council is in contact with TriWest leadership, and the claims processor, PGBA, is implementing a fix. We understand the frustration these payment issues cause. Members are recommended to watch payment records for July and August claims carefully to ensure any underpaid claims are rectified over the coming weeks.

For those serving veterans in the VACCN in any state, this is a reminder that TriWest and Optum need to verify the current credentials (re-credential) for all network providers every third year around the anniversary of the provider's contract. Email from Optum or TriWest should not be considered spam. The re-credentialing process will require submission of a current W-9, insurance, biographical info and, if applicable, a current home care license. This is standard procedure to maintain a current provider network for the VA.

 
 

 Exclusive: CMS Study Sabotages Efforts to Bolster Nursing Home Staffing, Advocates Say

Kaiser | By Jordan Rau
 
The Biden administration last year promised to establish minimum staffing levels for the nation’s roughly 15,000 nursing homes. It was the centerpiece of an agenda to overhaul an industry the government said was rife with substandard care and failures to follow federal quality rules.
 
But a research study the Centers for Medicare & Medicaid Services commissioned to identify the appropriate level of staffing made no specific recommendations and analyzed only staffing levels lower than what the previous major federal evaluation had considered best, according to a copy of the study reviewed Monday by KFF Health News. Instead, the new study said there was no single staffing level that would guarantee quality care, although the report estimated that higher staffing levels would lead to fewer hospitalizations and emergency room visits, faster care, and fewer failures to provide care.
 
Patient advocates said the report was the latest sign that the administration would fall short of its pledge to establish robust staffing levels to protect the 1.2 million Americans in skilled nursing facilities. Already, the administration is six months behind its self-imposed deadline of February to propose new rules. Those proposals, which have not been released, have been under evaluation since May by the Office of Management and Budget. The study, dated June 2023, has not been formally released either, but a copy was posted on the CMS website. It was taken down shortly after KFF Health News published this article.
 
“It’s honestly heartbreaking,” said Richard Mollot, executive director of the Long Term Care Community Coalition, a nonprofit that advocates for nursing home patients in New York state. “I just don’t see how this doesn’t ultimately put more residents at risk of neglect and abuse. Putting the government’s imprimatur on a standard that is patently unsafe is going to make it much more difficult for surveyors to hold facilities accountable for the harm caused by understaffing nursing homes.”
 
For months, the nursing home industry has been lobbying strenuously against a uniform ratio of patients to nurses and aides. “What is clear as you look across the country is every nursing home is unique and a one-size-fits-all approach does not work,” said Holly Harmon, senior vice president of quality, regulatory, and clinical services at the American Health Care Association, an industry trade group.
 
Nursing home groups have emphasized the widespread difficulty in finding workers willing to fill existing certified nursing assistant jobs, which are often grueling and pay less than what workers can make at retail stores. Homes say their licensed nurses are often drawn away by other jobs, such as better-paying hospital positions. “The workforce challenges are real,” said Katie Smith Sloan, president and CEO of LeadingAge, an association that represents nonprofit nursing homes.
 
The industry has also argued that if the government wants it to hire more workers it needs to increase the payments it makes through state Medicaid programs, which are the largest payor for nursing home care. Advocates and some researchers have argued that nursing homes, particularly for-profit ones, can afford to pay employees more and hire additional staff if they forsake some of the profits they give investors.
 
“Certainly, facilities haven’t put all the dollars back into direct care over the years,” said David Grabowski, a professor of health care policy at Harvard Medical School. “But for certain facilities, it’s going to be a big lift to pay for” higher staffing levels, he said in an interview last week.

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