Home Health & Hospice Week

Are bundling, nationwide VBP inevitable?

You may be just getting used to payment changes made in 2016, but lawmakers are already setting their sights on the next fiscal year — and its budget. President Obama issued his last budget proposal on Feb. 9, and as usual it contained a smorgasbord of cuts aimed at home health providers.

Because the president will be finishing his last term this year and Congress is controlled by Republicans, the budget is generally considered moot as an entire document. But law- and policymakers who will be hammering out budget details as the year wears on will look at the proposal for ideas on how to cut budget dollars.

As usual, many of those ideas pertain to home health agencies. The Obama Administration proposes a 1.1 percent reduction to HHAs’ payment update in 2017, and 2019-2026. “For 2018, the statute requires an update of 1 percent,” a Department of Health and Human Services budget summary notes.

Together with similar reductions for inpatient rehab facilities, long-term care hospitals, and skilled nursing facilities, the reduction would strip $86.6 billion from Medicare spending from 2017- 2026.

Also as usual, the president proposes a copayment for home health. The $100 copay would apply only to episodes that lack a preceding inpatient stay and do not have Low Utilization Payment Adjustments (LUPAs).

“Home health services represent one of the few areas in Medicare that do not currently include some beneficiary cost-sharing,” according to the summary. “This proposal aims to encourage appropriate use of home health services while protecting beneficiary access.”

Imposing a copay would cut $1.3 billion from Medicare home health spending over 10 years, the administration estimates.

“Congress should oppose any copay proposal for Medicare home health services and prohibit Medicare Advantage plans from charging a home health copay,” the National Association for Home Care & Hospice insists in its Legislative Blueprint for Action. “Reinstating the copay today would directly conflict with the goal of Congress to modernize the Medicare program.”

Other home health topics in the budget proposal include:

• PAC bundling. The issue of bundling payments for post-acute care providers isn’t going to go away. The Medicare Payment Advisory Commission is hard at work formulating a unified PAC prospective payment system recommendation and has been testing various PAC PPS models, according to recent MedPAC meetings. And House Ways & Means Chair Kevin Brady (R-Texas) is pushing his bill (Medicare Post-Acute Care Value-Based Purchasing Act — H.R. 3298) that would implement a unified Value-Based Purchasing system across PAC sites.

The budget proposal includes a PAC bundling initiative covering long-term care hospitals, inpatient rehabilitation facilities, skilled nursing facilities, and home health. “Payments will be bundled for at least half of the total payments for post?acute care providers” under the system, according to the budget.

The proposal would cut $9.9 billion from Medicare spending over 10 years.

• Value-Based Purchasing. The budget proposal gives a shout-out to the newly implemented Home Health Value-Based Purchasing model taking place in nine states, but calls for a national VBP program for HHAs to begin in 2018. The VBP program would be budget-neutral.
• CMPs. “This proposal allows CMS to retain and invest civil monetary penalties assessed on home health agencies for activities to improve the quality of care of patients receiving home health services,” the budget says. “The Affordable Care Act provided this authority for Skilled Nursing Facilities.” The program would cost Medicare $10 billion over 10 years.

Note: See the HHS summary at www.hhs.gov/about/budget/index.html — click on the “HHS Budget in Brief” link.