Home Health & Hospice Week

HHAs may say goodbye to payment model's temporary status.

While lawmakers are still hammering out a deal to settle the federal budget for the year we’re currently in, the blueprint for next year’s budget is already in the works — including some surprising implications for home health and hospice providers.

On March 11, President Joseph Biden released his $7.26 trillion spending plan for the federal government in fiscal year 2025, which starts on Oct. 1. Mainstream attention may be going to drug pricing negotiations, tax increases, and reproductive health rights, but many issues important to HHAs and hospices are included as well.

The staggering budget total includes $130.7 billion in discretionary and $1.7 trillion in mandatory spending for the Department of Health and Human Services, which includes the Centers for Medicare & Medicaid Services, HHS notes on its website.

Of course, the Biden administration’s proposal is far from the last word on the budget.

“Historically, the president’s budget request kicks off the congressional budget process, serving as a starting point for lawmakers to determine funding levels and national spending priorities,” notes the George Washington University in a release analyzing the proposal.

“Congress is under no obligation to adopt all or any of the president’s budget,” point out attorneys Emily Felder and Deema Tarazi and policy advisors Adam Steinmetz and Lauren Mish with law firm Brownstein Hyatt Farber Schreck. “Instead, the president’s budget request is used to indicate the president’s recommended spending and revenue levels along with policies the administration wants to prioritize,” Felder, Tarazi, Steinmetz and Mish explain in online analysis of the proposal.

“The fiscal year 2025 budget request is just the first move in a long and complex set of discussions and negotiations that will determine the actual budget for the federal government next fiscal year,” trade group LeadingAge concludes.

Do You Think You’d Qualify?

That said, one of the most pressing elements in the budget for home health and hospice providers may be related to value-based purchasing programs.

The administration lists “create a permanent Medicare Home Health Value-Based Purchasing program” in its overall budget summary overview.

Reminder: CMS implemented the original nine-state Home Health VBP Model in 2016. The agency then expanded the model starting in 2022 with the first performance year in 2023. Home health agencies and their representatives have criticized CMS for changing model elements such as the base year and quality measures as it has launched the nationwide version (see HHHW by AAPC, Vol. XXXII, No. 39-40).

Now, the administration wants to make the expanded demonstration model more lasting. The VBP model “successfully improved the quality of home healthcare at lower cost without evidence of adverse risks,” HHS maintains in its 182-page “Budget In Brief” document. “This proposal converts the expanded model into a permanent Medicare program, similar to value-based purchasing programs already in place for other Medicare providers,” HHS says.

It also lists “implement value-based purchasing and quality programs for Medicare facilities” in the overview.

That somewhat surprisingly refers to a proposal to spread the VBP program to eight other provider types — including hospices — starting in calendar year 2027, HHS specifies in its brief. The program would include “incentives and penalties to improve quality and health outcomes,” the agency elaborates.

“HHS may grant hardship exemptions,” HHS allows. But the agency offers no hints on which providers would qualify for them.

“No further details are provided about this VBP-for-hospice program, or the other sectors’ VBP programs, other than that they would be budget-neutral,” notes the National Association for Home Care & Hospice in its budget analysis.

Wait and see: But “just last week, [the CMS Center for Medicare & Medicaid Innovation] decided to terminate the Value-Based Insurance Design (VBID) hospice ‘carve-in’ demonstration at the end of CY2024 (the demo had been set to run through CY2030),” NAHC reminds. “Over the years, various policy stakeholders have floated different Medicare hospice benefit (MHB) payment reforms, and 2010’s Affordable Care Act legislation called on CMS to pilot test a VBP program for hospices, which it has not done to-date,” the trade group adds in its member newsletter.

The feds’ ongoing struggle with how to accurately gauge hospice care quality, in light of the sector’s unique attributes, may also slow down this process, observers predict. Interested parties including the Medicare Payment Advisory Commission have commented on the shortcomings of the current hospice quality measures in the past.

Note: The HHS “Budget in Brief ” is at www.hhs.gov/sites/ default/files/fy-2025-budget-in-brief.pdf.