Home Health & Hospice Week

Demo funding drawn from reduced hospital, ER use.

Home health agencies got some good news and some bad news in the special Open Door Forum on the home health pay for performance demonstration project.

Good news: Incentive payments under the P4P demo won't come from general home care funding. Instead, the Centers for Medicare & Medicaid Services and its P4P contractor, Abt Associates, plan to calculate the savings to the overall Medicare program for demo patients and use that money for incentive payments.

Thus, if the demonstration patients have lower hospitalization and emergency room use than a control group of patients, CMS will pay out the reimbursement difference to P4P demo HHAs, Abt explained in the Dec. 13 forum that drew a whopping 984 callers.

"This methodology assures that no agencies will face payment reductions as a result of participating in the demonstration while maintaining budget neutrality," Abt noted in its slide presentation for the forum.

Bad news: If demo patients don't cost the Medicare program any less overall than the control group patients, participating HHAs won't receive any extra payments, no matter how well they performed.

And agencies won't know if they will receive any money until almost a year after the demonstration project year closes, admitted Abt's Alan White. "There's a lag," White said in the forum.

The long wait for payment--if it comes at all--may turn some agencies off, notes consultant Judy Adams with LarsonAllen based in Charlotte, NC. "Having to wait for more than a year for any incentive certainly will not be a good recruitment tool for participation," Adams tells Eli.

CMS will reward providers who are the top perfomers and the most improved, Abt's Henry Goldberg explained. Sixty percent of incentive funds will go to top performers while 40 percent will go to most improved. HHAs in the top 20 percent of each category will be eligible for payments.

The plan to reward greatest improvement as well as top performers gives incentive to some agencies that otherwise would be totally cut out out of the P4P running, Adams lauds.

Payment floor: Agencies will have to meet as-yet-unspecified minimum outcome thresholds to receive any reward, White noted. But Abt isn't planning to have a cap set on payments.

"What if there are enormous demonstration savings?" asked American Association for Homecare's Ann Howard in the forum. "We have seen some enormous self-recorded savings from home health agencies that have implemented programs to reduce hospitalization."

Large savings will equal large rewards, Goldberg predicted.

One at a time: CMS and Abt plan to base payments on individual outcomes, not all the outcomes together. So if a participating HHA excels on one measure, it could receive a reward for that measure alone, Abt said in response to a caller question. Medicaid Patients [...]