Home Health & Hospice Week

Reducing a money-saving service was always a losing proposition for Medicare.

Vociferous opposition to the unfairness of Medicare Advantage payments has been a hallmark of the home health industry for decades, and has only intensified as MA market penetration has ramped up. But unlike the hospice carve-in, home health hasn’t been able to disentangle itself from the MA payment structure.

Why? Taking a look at the MA program’s history may help illuminate the issue.

Reason 1: Medicare started running demonstration projects with managed care organi­zations in the late 1970s and 1980s. In 1985, some of those demos started converting into regular programs. The Balanced Budget Act of 1997 created the Medicare Part C or Medicare+Choice program, and it was renamed Medicare Advantage in 2003’s Medicare Modernization Act. The hospice benefit had been excluded from the MA program up until the Value-Based Insurance Design (VBID) Model’s Hospice Benefit Component demonstration project that first took effect in 2021.

In contrast, home health has been part of the Part C/MA program for decades at this point.

Reason 2: The traditional Medicare fee-for-service hospice benefit already has been demonstrated in multiple studies to save the program money, points out the National Association for Home Care & Hospice. In fact, a 2023 study from NORC at the University of Chicago showed billions in such savings a year while delivering high-quality care, NAHC highlights in its statement about the carve-in’s termination. (See more on the study at HHHW by AAPC, Vol. XXXII, No. 11.)

“From many providers’ and patients’ points of view, it’s been very difficult for Medicare Advantage Plans to shift from their usual mode of limiting care to a hospice mindset which tends to value more readily available care,” notes heatlhcare attorney Elizabeth Hogue. “To many, this model looked like a non-starter from the beginning because of key differences,” Hogue tells AAPC.

Reason 3: CMS acknowledges in its statement about the carve-in’s abrupt conclusion that the program has had “operational challenges and limited participation.”

In fact, “it appears that the major obstacle to the hospice component of VBID was the lack of participation,” judges The Health Care Group in Morgantown, W. Va. “In fact, participation was declining from previously experienced low-level participation,” the accounting and consulting firm points out in its electronic newsletter.

“I suspect that participation problems held at least equal weight in the CMS decision to fold,” says consultant Sue Lyn Schramm with Schramm Consulting in Aldie, Va. “If there aren’t enough participating agencies to give you good data, then it’s not really an effective demonstration, is it?” Schramm asks in a blog post about the termination.

Reason 4: MA plans didn’t like the carve-in either, it appears.

In addition to the low participation, “payers were … complaining that the logistics of network formation and service quality were a problem,” Schramm notes.

Plans find the carve-in “extremely burdensome,” NAHC says (see related story, p. 66).

Medicare adding safeguards to the program to combat hospice access issues probably didn’t help in that area, observers expect.