Home Health & Hospice Week

Influential advisory body to Congress points to historic differences.

Wondering why MedPAC seems to have it in for home health agencies year after year, recommending reimbursement reductions over and over? Take a look at the 2013 statistics the Medicare Payment Advisory Commission cites in its latest report to Congress:

• Medicare gained 302 agencies in 2013, totaling 12,613 — a 2.5 percent increase over the previous year. “Most new agencies were concentrated in a few states, and for-profit agencies accounted for the majority of new providers,” the Commission noted in its newest annual report.

• Concentration of agencies varied widely. For example, Texas averaged 10.5 agencies per 10,000 beneficiaries, while New Jersey averaged less than 1 agency per 10,000 beneficiaries.

• Episodes per user and payments per user were down (see story, p. 82), but those decreases “follow several years of rapid increases,” MedPAC notes. Between 2002 and 2013, the total number of episodes increased by 65 percent, and the number of episodes per home health user increased from 1.6 to 1.9.

• Likewise, Medicare home health spending declined by about 0.5 percent in 2013. However, spending “has increased by 87 percent since 2002,” MedPAC highlights.

• And while the average profit margin fell, “for more than a decade, payments have consistently and substantially exceeded costs” under PPS, MedPAC says. Medicare margins for freestanding agencies averaged 12.7 percent in 2013 and averaged 17 percent between 2001 and 2013.

• Admissions from the community, rather than the hospital, have more than doubled since 2001.

• Home health spending of $17.9 billion continues to outstrip the pre-interim payment system (IPS) high of $17.7 billion.

• But home health users are down from pre-IPS — 3.5 million in 2013 versus 3.6 million in 1997.

• The ratio of visits by discipline has changed greatly under PPS. In 1997, nursing comprised 41 percent of visits, aide 48 percent, therapy 10 percent and social work 1 percent. In 2013, that was nursing 53 percent, aide 13 percent, therapy 36 percent, and social work 1 percent.

• Visits per user was 33, versus 73 in 1997.

• The share of Medicare beneficiaries using home health was up slightly to 9.2 percent.

• The number of episodes was the same as the previous year at 6.7 million.

• Episodes not preceded by a hospital or PAC stay grew from 53 percent in 2001 to 66 percent, while episodes preceded by such stays fell from 47 percent to 34 percent in the same timeframe.

• Utilization may be down, but the decline “has been concentrated in states with the highest utilization rates: Texas, Louisiana, Oklahoma, Mississippi, and Florida,” according to MedPAC. Volume declined by 11 percent in Texas, but the volume of home health services in the state had increased 289 percent between 2001 and 2013.

• Even after the recent declines, Texas, Louisiana, Oklahoma, Mississippi, and Florida had the highest utilization rates on a per beneficiary basis in 2013, MedPAC says. “As a group, they averaged 33 episodes per 100 beneficiaries, more than twice the average of all other states.”

• Thirty-four states had an increase in volume in 2013.

• Episodes consisting of five or fewer therapy visits increased by 1 percent in 2008 through 2013, while those with six or more therapy visits increased by 26 percent.

• Since 2011, the number of non-therapy episodes has fallen while the therapy episodes have increased, “suggesting that the shift toward therapy may be accelerating,” MedPAC says.

• Seventy-six percent of the episodes that received the add-on payments in 2013 were in rural counties with utilization higher than the median utilization for all counties.

• Rural counties with the lowest utilization per beneficiary, those in the bottom fifth of utilization, accounted for less than 4 percent of the episodes eligible for the rural add-on payment.

Source: MedPAC 2015 Report To Congress.