Home Health & Hospice Week

Hospices generally get a pass in White House budget for 2014.

As the opening salvo in this year’s federal budget negotiations, President Obama’s proposal released April 10 places some familiar threats on home health agencies’ horizon.

As he did last year, the president proposes instituting copayments for home health episodes (see Eli’s HCW, Vol. XXII, No. 13). Under the blueprint, Medicare beneficiaries would pay a $100 per episode copay starting in 2017, according to the budget.

Exceptions: The copay wouldn’t apply to all episodes. It would affect only non-LUPA episodes that lack a qualifying inpatient stay preceding them.

The measure would cut $730 million from Medicare’s home health spending from 2017 to 2023, according to the budget.

Copays have been an increasingly popular proposal from a number of law- and policymakers in recent years. For example, the Medicare Payment Advisory Commission once again recommended home health copays in its March report to Congress, although it floated a $150 amount.

"The high rate of volume growth for these types of episodes," without a qualifying hospital stay preceding them, "which have more than doubled since 2001, suggests there is significant potential for overuse," MedPAC says in its report. "The addition of a copayment would allow for beneficiary cost consciousness to counterbalance the permissiveness of the benefit’s use criteria and the volume-rewarding aspects of Medicare’s per episode payment policies."

In other words, a copay would encourage "appropriate utilization," MedPAC concludes.

Influential: The President’s budget cites MedPAC’s recommendation.

Industry Opposes Copay Measure

But curbing home health utilization may not be good for the health system as a whole, insists the National Association for Home Care & Hospice. "A home health copay will take Medicare spending in the wrong direction — forcing patients out of high-quality, cost-effective care into much more costly care settings such as hospital, ER and assisted living-based treatment," says NAHC’s Val Hala-mandaris in a statement. "Health care that is cost effective for taxpayers, preferred by patients, and results in positive health outcomes should be encouraged and incentivized — not punished with additional payment cuts and a misguided ‘sick tax.’"

The Visiting Nurse Associations of Amer-ica is "disappointed" in the President’s copay proposal, it says in analysis of the initiative.

"Proposals that would … increase deduct-ibles and co-pays … must be rejected," urges Medi-care Rights Center president Joe Baker in a release.

"The proposed budget released by the White House [April 10] unfortunately shifts the burden to seniors," says lobbying group The Partnership for Quality Home Healthcare in a release.

Remember: "Upon the Medicare program’s establishment in 1965, home health was subject to a copayment," the Partnership recalls. "But Congress repeal-ed it in 1972 because it had proven to be ineffective in driving down costs, limited patient access to clinically advanced, cost-effective care, and forced patients to seek care in higher-priced inpatient settings."

More Cuts Up For Consideration

The President also proposes to reduce the inflation update factor for a number of post-acute care providers, including HHAs, by 1.1 percent starting in 2014. "Over the years, MedPAC has noted that expenditures for post-acute care have increased dramatically, and payments are in excess of the costs of providing high-quality and efficient care, placing a drain on Medicare," the White House says in the budget.

Stats: HHAs had a profit margin of 14.8 percent in 2011, MedPAC notes in its March report to Congress. And the number of agencies increased to about 12,200, an all-time high.

"NAHC strongly opposes home health co-pays and any further cuts to home health payments — particularly with rebasing on the near horizon," the trade group says. Rebasing is set for 2014.

The White House also "proposes to restructure payments for post-acute care services using a bundled payment approach, saving about $8 billion over 10 years," the budget notes.

Home health agencies have long feared that other providers will be given control over home health payments in a bundling scenario. "Bundling of home health payments with payments to other providers … could cause a major disruption to the health care industry, would be anti-competitive, would increase the federal regulatory burden, and would erect a new and unnecessary barrier to beneficiaries’ access to quality care," NAHC maintains.

The President’s budget doesn’t mention MedPAC’s other two home health recommendations this year: removing therapy utilization from the home health PPS case mix system, and targeting medical review in areas with aberrant home health utilization.

The budget proposal makes no mention of hospice.

Note: The budget is at www.whitehouse.gov/sites/default/files/omb/budget/fy2014/assets/budget.pdf . The MedPAC report is at www.medpac.gov/documents/Mar13EntireReport.pdf