Home Health & Hospice Week

If an influential advisory body to Congress has any say, your patients will be subject to $150 copayments starting next year.

That's the recommendation approved by the Medicare Payment Advisory Commission in its Jan. 13 meeting in Washington, D.C. The vote followed intense discussion of the proposal in MedPAC's December meeting (see Eli's HCW, Vol. XX, No. 2, p. 10).

The copayment that MedPAC will endorse in its March report to Congress would apply per episode, but only to those episodes that don't follow a hospital or post-acute stay. The copay also would not apply to low-utilization payment adjustment (LUPA) episodes of four visits or less.

That means the copay, which MedPAC will suggest be set at $150, would apply to about onethird of Medicare's home health episodes, noted MedPAC staffer Evan Christman in the meeting. The $150 figure, which was scaled back from the $300 amount discussed in the December meeting, would be 5 percent of the average home health episode's cost.

MedPAC predicts the copay would cut Medicare home care spending by $250 to $750 million in 2012 and $1 to $5 billion over five years, Christman noted.

While commissioners quibbled about details of the copay, they overwhelmingly supported the idea in general. That's likely due to their perception that home health agencies run on high profit margins and that the industry is riddled with fraud and abuse, judging by their comments in the meeting.

HHAs' margins are "eye-popping," noted commissioner Karen Borman, a surgeon at Abington Memorial Hospital in Abington, Penn.

The industry has seen "obscene behavior in certain quarters," said commissioner Mitra Behroozi, executive director of the 1199SEIU Benefit and Pension Funds.

"This is a benefit that is careening out of control," claimed former CMS staffer Robert Berenson, now with the Urban Institute.

Even South Dakota physician Thomas Dean, who has been supportive of rural agencies' fight against difficulties, joined the fray. "The program appears to be out of control," Dean said in the meeting. "The spending is out of control and we need to restrict it."

Commissioners seem particularly vexed with fraud and abuse in the program, with one commissioner pointing a finger at the entire industry. "I'm really concerned about the fraud and abuse, extraordinarily concerned about that," said consultant and former hospital executive George Miller. "The industry and the peers have an equal responsibility to this. This is absolutely shameful, this amount of fraud and abuse."

Ultimatum: "There are ways to deal with it if the industry won't take care of it itself, and we shall do that," Miller warned.

Of course, home care providers have long complained of regulators and authorities turning a deaf ear to their reports of fraud and abuse.

Commissioners did admit to some problems with copays, however. "Copays reduce utilization, but they reduce appropriate care and inappropriate care in roughly equal amounts," acknowledged MedPAC chair Glenn Hackbarth. "They're crude tools, and I think to pretend otherwise is not to be forthcoming about it."

The $150 copay is "a cliff" for some lowincome beneficiaries, warned Behroozi.

And HHAs' average 17.7 percent profit margin for 2009 isn't really accurate, Dean pointed out. That margin leaves out "90 percent of the state of South Dakota," he said. "We simply don't have any freestanding providers in the vast portion of the state." The margin excludes data from providerbased agencies.

But those reservations weren't enough to prevent commissioners from approving the copay recommendation, which will go into MedPAC's March report to Congress.

MedPAC also approved four other HHA recommendations for its report, which would increase fraud and abuse-fighting tactics in high utilization areas, speed "rebasing" cuts to prospective payment system rates, revamp case mix to exclude therapy service as a factor, and tinker with the PPS formula to reincorporate some cost-based elements.

Commissioners seemed most eager for a case mix revamp to combat the wide profit margin variances seen in the industry. "Good providers ... could be whacked by rebasing before there is the revision to the case mix adjustment," Behroozi worried.