Home Health & Hospice Week

PAC PPS remains a popular idea.

There’s a long way to go before lawmakers pin down the details of Medicare legislation for 2020, but President Trump’s recently released budget proposal may give some idea of the budget-cutting items that could eventually show up in it.

The Trump administration wants to “establish a unified payment system for post-acute care providers,” according to a “Major Savings and Reforms” budget summary document issued by the White House.

Old way: “Medicare uses separate prospective payment systems to pay for stays in the four main post-acute care settings: skilled nursing facilities; home health agencies; inpatient rehabilitation facilities; and long-term care hospitals,” the budget document explains. “Non-partisan experts have repeatedly found that payment rates significantly exceed the costs of care in these settings, that payments do not align well with patients’ clinical needs, and that patients may go to sites of care that provide more intensive services than are clinically necessary.”

New way: “The Budget would transition payment for post-acute care to site-neutral payments over five years,” it says. “It would reduce the growth rate of post-acute care payment during the transition period. The proposed payment system is based on the anticipated clinical needs and risk factors of the patient, rather than the site of service. All types of facilities would remain available, and patients with their doctors, would determine the right site of care.”

The problem: The Centers for Medicare & Medicaid Services, the Medicare Payment Advisory Commission, and others have been trying to figure out a workable way to implement a Post-Acute Care Prospective Payment System for quite a while, without making much progress. In a September 2018 meeting, MedPAC commissioners noted that home health isn’t a great fit for the payment system anyway (see Eli’s HCW, Vol. XXVIII, No. 33).

Nevertheless, with the idea’s popularity, keep an eye on potential developments leading toward implementation.

And there’s a bigger problem. “The President’s budget proposal presents serious concerns for Medicare home health services, as it includes deep rate cuts for all of post-acute service sectors totaling over $111 billion over 10 years,” warns National Association for Home Care & Hospice President William Dombi.

“We are open-minded in considering a unified post-acute payment model reform,” Dombi tells Eli. But “including significant reductions in Medicare support, both in advance of that reform and during it, is not the path to successful reform,” he emphasizes.

Quick RCD Expansion?

The budget proposal doesn’t hold a lot of details, but does spend some time on fraud- and abuse-fighting areas. “The Budget includes several legislative proposals and administrative actions to reduce monetary loss from improper payments and strengthen the integrity and sustainability of Medicare, Medicaid, and CHIP,” according to an overview document released by the White House. “Combined with additional funding investments in the Health Care Fraud and Abuse Control program, these policies provide CMS with additional resources and tools to combat waste, fraud, and abuse and to promote high-quality and efficient healthcare.”

Watch out: “The Budget proposes to expand the Medicare program’s authority to conduct prior authorization on items or services at high risk of fraud and abuse,” it says. That may indicate rollout of the Review Choice Demonstration may happen quicker than you think.

“The proposal helps ensure that the right payment goes to the right provider for appropriate services and saves taxpayer dollars from paying for … services that are not medically necessary,” it says.

The inclusion of this language “is a clear indication that the administration favors that type of program integrity measure throughout the Medicare program,” according to Dombi. Other provider types should watch out for “spreading the concept to other sectors in Medicare,” he says.

The budget proposal also calls for expanding benchmarking, presumably through Comparative Billing Reports and PEPPER reports.

And “the Budget proposes to strengthen CMS’s ability to partner with States to address improper payments and ensure Federal recovery of incorrect eligibility determinations,” the budget document says. “In addition, the Budget allows States flexibility to more frequently assess beneficiary eligibility, ensuring resources are available for the millions of Americans who depend on Medicaid’s safety net.”  

Note: The budget proposal overview is at www.whitehouse.gov/wp-content/uploads/2019/03/budget-fy2020.pdf.