Home Health & Hospice Week

Add-on equivalent, wage index revamp would help.

The rural reimbursement add-on may be eliminated by law, but Medicare can find other ways to give strapped agencies relief, commenters on the 2023 home health proposed rule are telling the feds.

The steep payment cuts proposed for home health agencies are going to hit rural providers especially hard, threatening beneficiaries’ access to care (see story, p. 263). Home health providers and their representatives suggest the following solutions to the problem.

Resurrect Rural Add-On

The rural add-on which Congress has long provided will be phased out entirely in 2023 according to federal law, commenters acknowledge. But that’s not the end of the story.

“While we understand that [the Centers for Medicare & Medicaid Services] is compelled to follow the tiered rates mandated by Congress, we urge CMS to closely monitor the adequacy of the Medicare HHPPS payment so that agencies can continue to provide important care to Medicare beneficiaries in rural areas,” advises Patrick Conole with the Home Care Association of New York State in the trade group’s comment letter. “We also urge CMS to seek Congressional authority, if necessary, to extend and modify the rural add-on as necessary to appropriately reflect access-to-care and labor conditions.”

There may still be options if Congress doesn’t cooperate. The Visiting Nurse and Hospice for Vermont and New Hampshire “is disappointed that the Medicare home health rural add-on payment continues to be phased out,” says VNH CEO Johanna Beliveau in the agency’s comment letter. “For over 20 years, Congress has recognized the challenges of operating home health care in rural America and has instituted a Medicare rural add-on for home health services. VNH supports the rural add-on, and recommends that CMS utilize all authority it has to provide a similar reimbursement mechanism to bolster both home care and hospice agencies that are treating patients in rural settings,” Beliveau exhorts.

“We ask CMS to consider implementing or creating a way to reestablish the rural add-on percentage,” says officials from Gundersen Health System in LaCrosse, Wisconsin. As travel costs skyrocket, “the rural add-on was a way to help compensate staff for those costs,” they note.

Address Wage Index Disparities

Rural HHAs are the big losers when it comes to Medicare wage index. (See details of the system’s inequities in HCW by AAPC, Vol. XXXI, No. 33.) Thus, many commenters ask CMS to right this wrong.

National chain LHC Group Inc. “provides approximately 35 percent of its home health services to beneficiaries residing in rural areas, and is sensitive to issues affecting rural providers,” LHC CEO Keith Myers tells CMS in the company’s comment letter. “Rural areas are disproportionately affected by artificially reduced rural hospital wage indices,” Myers stresses.

“The current method of adjusting labor costs using the hospital wage index does not accurately account for increased travel costs and lost productivity in serving rural areas,” Myers continues. “CMS should consider establishing a floor for home health wage indices, as it did for hospice in 1983, to establish equity in geographic adjustment among provider types,” he suggests.

“We continue to believe that the pre-floor, pre-reclassified hospital wage index is wholly inadequate for adjusting home health costs,” HCANYS’ Conole says. “Unlike the hospitals nationally who are given the opportunity to appeal their annual wage index, HHAs do not have appeal rights with regards to their wage index. This lack of parity between different health care sectors further exemplifies the inadequacy of CMS’s decision to continue to use the pre-floor, pre-reclassified hospital wage index to adjust home health services payment rates,” he criticizes.

And of course, shelving the projected 4.2 percent cut for all HHAs will help rural HHAs survive, many providers tells CMS in their letters.

Stay tuned to the 2023 final rule, expected in late October or early November, to see whether CMS implements any of the commenters’ recommendations.