Home Health & Hospice Week

Report ignores home health access problems discussed in MedPAC meetings.>

The Medicare Payment Advisory Commission thinks home health and hospice agencies should tighten their budget belts in 2023, and it’s not afraid to tell Congress.

MedPAC commissioners voted in the Commis­sion's January meeting to recommend cuts for HHAs and hospices (see HCW by AAPC, Vol. XXXI, No. 4). MedPAC issued the official recommendations in its annual report to Congress released March 15.

HHAs: “For calendar year 2023, the Congress should reduce the 2022 Medicare base payment rate for home health agencies by 5 percent,” MedPAC recommends. And HHAs should report telehealth visits on Medicare claims, MedPAC also urges.

Hospices: “For fiscal year 2023, the Congress should eliminate the update to the 2022 Medicare base payment rates for hospice and wage adjust and reduce the hospice aggregate cap by 20 percent,” MedPAC recommends. And hospices should also report telehealth visits on Medicare claims, the advisory body says.

MedPAC often recommends cuts and rate freezes, and Congress ignores them. But lawmakers may look at fraud cases, profit margins, and more and decide to listen more closely this year, observers worry.

The report, as it has done historically, maintains that access to home health services is good. “Almost all beneficiaries have access to home health services,” MedPAC insists.

But that assertion contradicts first-hand accounts and concerns raised by MedPAC members in the Commission’s meetings in December and January.

“We have an incredible problem getting access to home health,” reported Commissioner Lynn Barr in the Dec. 10 meeting. Barr heads up Caravan Health. “I have no alternatives in post-acute care in most of my rural communities, which is a real disconnect with what you’re seeing,” Barr told MedPAC staffer Evan Christman in response to the access stats (see HCW by AAPC, Vol. XXXI, No. 2).

Some information included in the report may be tacit acknowledgment of this discussion, by opposing the notion that access is limited. “In 16 states, per capita home health care use in rural areas exceeded use in urban areas,” MedPAC insists.

“Beneficiaries residing in frontier rural areas had lower use than other beneficiaries,” the report does admit. But “frontier areas are concentrated in relatively low-use states such as Montana, North Dakota, and South Dakota,” the report says, implying that the lower use shouldn’t count against access in that case.

Plus: More stringent fraud enforcement may actually mean access is better in rural areas, the report contends. “Past efforts to combat fraud, waste, and abuse in home health care have focused on high-use urban areas, so the gap between some urban and rural areas may in part reflect fraudulent or low-value provision of home health care services in urban areas,” MedPAC says.

“Access is more than adequate in most areas,” MedPAC concludes. And whatever the current level of access is, it should remain the same under a 5 percent cut, MedPAC predicts. “Beneficiaries’ access to care should not be affected,” according to the report.

Do You Consider A 7% Reduction In Spending ‘Slight’?

MedPAC, as usual, also includes a laundry list of statistics about home health spending and utilization (see box, p. 75). But it spends a lot of its report discussing why the numbers don’t show what they seem to show, or arguing against the inferences readers would commonly draw from them.

For example: Home health users were down a sharp 7 percent and spending a significant 5 percent in 2020 while HHA costs were up 3 percent. But MedPAC frames the reductions as “slight.” The report points out “total Medicare spending also fell by 4.7 percent in the same period.”

And “the PHE, not Medicare’s payment levels, likely explains much of the decline observed in 2020,” MedPAC contends. “In aggregate, the demand for home health care services recovered in the remainder of 2020,” the report adds.

MedPAC points out that the number of in-person visits fell (see box, p. 75). “In-person therapy visits declined by more than in-person nursing visits, likely reflecting the impact of the PDGM,” the report says. But “the decline in in-person visits could also reflect … the reluctance of beneficiaries to receive services in the home and growth in the use of telehealth” during the PHE, the Commission allows.

A large part of MedPAC’s argument for cuts comes down to profit margins, which were a high 20.2 percent in 2020. “Medicare margins will remain high in 2022,” the report adds.

Bottom line: “Medicare’s payments have always been in excess of cost under prospective payment,” MedPAC argues.

“Home health payments should be significantly reduced,” MedPAC tells Congress. “We anticipate that payments in 2022 will substantially exceed costs.”

Home care’s popularity with patients and cost-saving ability over inpatient settings shouldn’t distract lawmakers, the report exhorts. “Medicare’s payments for home health services are too high, and the excess payments diminish the service’s value as a substitute for more costly services,” MedPAC emphasizes. “In addition, broad geographic variation in the use of the home health benefit indicates inefficiencies in some areas of the country.”

“A 5 percent reduction in 2023 would represent a significant action to address the magnitude of the excess payments embedded in Medicare’s home health payment rates,” MedPAC says.