Home Health & Hospice Week

Home health agencies that made the decision in 2007 to be P4P guinea pigs are reaping the rewards today.

The results are in from the first year of Medicare's pay for performance demonstration, and agencies that participated and were put in the intervention group are now splitting up a cool $15.4 million in savings.

Background: Back in 2007, Medicare P4P contractor Abt Associates touted the two-year demo that ran in seven states as a risk-free way to try out the new payment structure. HHAs' Medicare payments were not docked for poor performance, so the worst case scenario was receiving regular Medicare reimbursement, Abt's Henry Goldberg told the industry (see Eli's HCW, Vol. XVI, No. 37, p. 282).

And now 166 agencies are seeing the best case scenario, a Centers for Medicare & Medicaid Services official says -- allocation of the overall Medicare spending savings the intervention group's patients showed versus the control group's patients in 2008. The 166 HHAs are about 58 percent of the intervention group, the CMS staffer tells Eli.

The demo agencies were judged on seven publicly reported outcomes and could earn incentive payments both by being a top performer and a top improver.

CMS hasn't yet released specifics of the rankings, but Goldberg tells Eli the 2008 demo data looked comparable to Abt's historical analysis. That evaluation found that about 61 percent of agencies ranked as top performers on at least one measure.

CMS will distribute more P4P money to the participating HHAs for 2009, if the last year of the demo shows overall Medicare savings again, the CMS official explains. Expect those calculations to come by this fall, Goldberg offers.

What's ahead: CMS doesn't plan to expand the demo in the future, the CMS staffer notes. Congress will have to decide how and when to implement a P4P component to Medicare payment.

"Eventually ... some type of P4P program will be instituted nationwide for Medicare home health services," the National Association for Home Care & Hospice anticipates.

The millions in savings the first year showed seem "promising," Goldberg notes. But CMS likely will wait for the final demonstration evaluation report before moving forward on P4P, he expects. That evaluation will determine whether the P4P incentives changed providers' behavior.

The demonstration ran from January 2008 to December 2009 in Connecticut, Massachusetts, Alabama, Georgia, Tennessee, Illinois, and California. In those states, 567 agencies participated -- about half in the control group, half in the intervention group, the CMS official says.

The outcomes used and their weights were incidence of acute care hospitalization (25 percent), incidence of any emergent care (15 percent), and improvement in bathing (10 percent), ambulation/ locomotion (10 percent), transferring (10 percent), urinary incontinence (10 percent), oral medications management (10 percent), and status of surgical wounds (10 percent). Unlike Home Health Compare, the P4P demo calculated measures based only on Medicare patients.