Home Health & Hospice Week

Accurate prediction of behavior changes is irrelevant, according to webinar speakers.

Home health agencies gave officials from CMS and its PDGM contractor an earful on problems ranging from access to technical calculations in a March 29 webinar.

Background: The Consolidated Appropriations Act (CAA), 2023 enacted last December requires the Centers for Medicare & Medicaid Services to issue “a description of actual behavior changes … including behavior changes as a result of the implementation of [the Patient-Driven Groupings Model] that occurred in calendar years 2020 through 2026,” as well as electronic files with related data. And it tasks CMS with using “an open door forum, a town hall meeting, a web-based forum, or other appropriate mechanism to receive input from home health stakeholders and interested parties on Medicare home health payment rate development,” including the data and behavior changes “with respect to the home health prospective payment system rate for calendar year 2023,” according to the law.

CMS has followed through, issuing a statistics spreadsheet, LDS files, and finally holding the “Medicare Home Health Prospective Payment System (HH PPS) Calendar Year (CY) 2023 Behavior Change Recap, 60-Day Episode Construction Overview, and Payment Rate Development Webinar” with speakers from PDGM contractor Abt Associates on March 29. In the session, Abt speakers and CMS officials went over technical aspects of the topic, answered some presubmitted questions, and opened the floor to live Q&As.

Perhaps most concerning to many webinar attendees was a statement buried in one of the 68 slides: “While CMS includes in this presentation, to the extent practicable, identified behavioral changes, it need not link every dollar of decreased estimate aggregate expenditures to a particular behavior change.”

Why? “We describe how all behavior change together impacts aggregate expenditures and therefore the budget neutral payment rate,” the presentation reads. “That is, the Permanent Adjustment was developed by considering all behavior change collectively, as opposed to individually,” CMS says.

In the live Q&A, one attendee noted that it was “discom­forting” to hear CMS isn’t concerned with the accuracy of the behavioral assumptions on which it bases such significant cuts.

Initial estimates of how behaviors would change are no longer relevant to ongoing payment updates, one of the Abt presenters explained in response.

“What I heard in the webinar was that behavior changes weren’t that important,” observes M. Aaron Little with FORVIS in Springfield, Mo. “They were really just a means to an end. They were used at the beginning of PDGM to anticipate how spending could potentially change under PDGM compared to PPS, but the real goal was to keep the change from PPS to PDGM budget neutral,” explains Little

Bottom line: “The CMS analysis showed that PDGM spending was more than what would have been spent under PPS, so there was a statutory requirement to reduce payments,” Little tells AAPC.

One of the pre-submitted questions worked into the body of the presentation asked CMS how it expects HHAs to absorb such significant cuts.

The Abt presenters pointed to high profit margin figures calculated by the Medicare Payment Advisory Commission and a finding that HHA 2021 payments were more than 30 percent in excess of their costs.

Attendees had a lot to say on the topic in the live Q&A section. For one, the latest rate update failed to address “massive cost increases” HHAs have incurred for mileage reimbursement, labor, PPE, and more, one nonprofit provider said.

“It’s just not viable” to operate an HHA and hospice under such low reimbursement rates, another nonprofit provider told CMS and Abt. “I don’t know how the industry is going to survive,” she said.

Due to wage index and other payment-related inequities, hospitals can pay nurses, therapists, and others double what HHAs can, the agency executive stressed.

The market basket update is not up to CMS, an agency official responded. And wage index problems are set out in law, so CMS’ hands are tied on the issues, he added.

Access Crisis Has Already Arrived

HHA numbers have been dwindling for years, but the end result of sustained cuts is going to be a serious access crisis, multiple providers predicted.

“Because of compression on the community … access is already being compromised,” one attendee warned. Agencies are having to turn away referrals, including from hospitals, leading to longer hospital stays and higher Medicare bills.