Home Health & Hospice Week

If you thought the Medicare Payment Advisory Commission would back off home care in the face of big payment cuts and regulatory changes set to take effect in January, think again.

Medicare's home care payments are very vulnerable to fraud and abuse at worst and overutilization at best, said the influential advisory body to Congress in its Sept. 14 meeting in Washington, D.C. That's because while a physician prescribes the services or equipment, other providers furnish them, noted MedPAC staffer David Glass in the meeting.

Another risk factor: Home care, including home health agency and hospice services and durable medical equipment, is generally furnished in the home instead of in a facility environment. That means there is little supervision and home care providers usually don't need much capital to enter the program, Glass explained.

The complete lack of patient cost-sharing for HHA services, very small cost-sharing for just some hospice services, and relatively modest costsharing for DME is another problem, Glass said in the presentation, "Accountability for Home Health, DME, and Hospice Use."

The extreme variation between regions shows the benefits' vulnerability, Glass said. While spending on the three sectors comprises 14 percent of Medicare spending overall, it makes up 24 percent of Medicare spending in the 10 highest-homecare-using MSAs, MedPAC found.

For example: DME spending in Miami Dade county in 2006 was $2,200 per person, while spending in nearby Collier county was just $220 per person. And in some counties, more than 35 percent of beneficiaries use home health and average four episodes a piece. That leads to more episodes that benes in those counties, Glass explained. Some instances of overutilization are complex.

For example, in 2006 Iowa had a rate of 48 percent for decedants using hospice -- 9 percent over the national average. But the state saw a rate of just 13 percent for live discharges. In contrast, Mississippi had a below-average rate of 35 percent for decedants using hospice, but a live discharge rate of 55 percent.

The government's crackdown on fraudulent providers has seen some success, Glass noted. For example, DME claims in Miami decreased 63 percent in one year after the Department of Justice and HHS Office of Inspector General launched their HEAT initiative there.

MedPAC is considering endorsing these ideas to help curb overuse and abuse:

• Moratorium on entry into the program.

• Reducing payments "closer to cost" to make the benefits less attractive to fraudsters.

• Accountable Care Organizations, which would be held accountable for home care spending.

• Bundling of payments, such as to hospitals.

• Cost-sharing for beneficiaries (a per-visit or per-episode copayment for HHAs and hospices).

• Increased regulatory standards in the Medicare Conditions of Participation.

• Increased physician responsibility for prescribing home care services or items.

The data shows that something needs to be done about the potential overutilization in some areas, commissioners agreed in the meeting.

But there are risks to taking a broad-brush approach, warned MedPAC Commissioner Thomas Dean, a family practice physician in South Dakota. While other areas are seeing overutilization, rural areas like South Dakota, Minnesota, and Montana see numerous counties with no home health access at all. "In the whole upper Midwest area, the access to these services has been declining rather than increasing," Dean said in the meeting.

"Clearly we don't have the prices right," Dean said. "We're losing services in some areas,we've got an over-supply of services in other areas." Beyond the bottom line: "The bad providers might be lower cost," cautioned MedPAC Commissioner Michael Chernew, a professor at Harvard Medical School. "We very much run the risk of driving out the good providers and just keeping the bad providers."

MedPAC needs to take care to avoid harming non-profit home care providers, said the Visiting Nurse Associations of America's Kathleen Sheehan. "Sometimes the providers that are not doing the right thing may have lower costs," Sheehan cautioned in the public comment portion of the meeting. "Look carefully at preserving a nonprofit delivery system" which serves all types of patients, including charity care, she urged commissioners.

MedPAC may want to consider certificate of need (CON) requirements for states, Sheehan added. And they should beware fallout from bundling, which could restrict patients' choice of providers.

Many of the fraud, abuse, and utilization concerns shown by the 2006 data have been tackled by enforcement measures put in place since then, such as HEAT fraud strike forces and Recovery Audit Contractor and Zone Program Integrity Contractor audits. Many provisions in the health reform law (Patient Protection and Affordable Care Act) also address the issues, notes the National

Association for Home Care & Hospice. Those include physician face-to-face encounter requirements, PECOS physician enrollment for claims processing, etc.

Promising: NAHC praises the commission's acknowledgement of access problems and other complexities. "New commissioners and some of the continuing ones expressed a solid knowledge of home care and hospice," NAHC cheered.