Home Health & Hospice Week

Copays should be a component of the unified payment system, report suggests.

As home health agencies are waiting to see what Medicare has in store for them in the 2018 Home Health Prospective Payment System proposed rule expected any day, more payment changes could be looming further out on the horizon.

In a June report to Congress, the Medicare Payment Advisory Commission urges lawmakers to require a transition to a Post-Acute Care PPS, covering HHAs, skilled nursing facilities, inpatient rehab facilities, and long-term care hospitals, starting by 2021.

A start date that close would require a proposed PAC PPS rule by 2018 or 2019 at the latest, points out the American Hospital Association in its analysis of MedPAC’s recommendations.

Reminder: The IMPACT Act doesn’t set out a required start date for a PAC PPS, but says if it is implemented, it would be proposed no earlier than 2024, MedPAC notes in its report. Beta testing of IMPACT Act items in the cognitive status, mental status, medical conditions, impairments, care preferences, and medication reconciliation domains will begin in October 2017, the Centers for Medicare & Medicaid Services said in a March national provider call on the topic. Medicare will randomly select 210 PAC facilities, including 70 home health agencies, in 14 geographic areas, for testing (see Eli’s HCW, Vol. XXVI, No. 22).

MedPAC contends that the implementation should be faster than what’s set out in the IMPACT Act, to curb unnecessary spending. MedPAC’s proposal is light on specifics, but it does contain these elements:

• waiver or modification of certain “settingspecific regulatory requirements;”
• standardized cost-sharing requirements across PAC settings (i.e., likely a home health copay);
• higher reimbursement for medically complex payments and lower reimbursement for patients receiving therapy;
• a payment adjustment for HHAs, since they don’t have to cover a patient’s room and board costs.

PAC PPS May Boost Patient Census

PAC PPS could have benefits for HHAs, MedPAC notes. For many agencies, PAC PPS payments would be higher than HH PPS payments, the advisory body says (see box, p. 187).

Also, HHAs could see more patient referrals as the PAC PPS system encourages lower-acuity settings for beneficiaries.

But there are many drawbacks to a PAC PPS, or at least serious question marks. For example, in addition to recommending a quick implementation timeline, MedPAC also pushes for a 5 percent across the-board payment cut under the system. The justification is that all PAC providers have high profit margins — 14 percent on average, MedPAC contends.

MedPAC also claims that PAC PPS would significantly reduce payment for patients who receive a lot of therapy, but don’t clinically need it.

The devil will be in the details, says attorney Robert Markette Jr. with Hall Render in Indianapolis. “This strikes me as a terrible idea and one that will likely have a much larger negative impact on home health,” Markette says.

For example: After being in place more than 17 years, CMS still hasn’t figured out how to account for therapy need, “other than the visit-based thresholds,” in the Home Health Prospective Payment System, Markette highlights. “How will they have a unified payment model across the board? The details of this model will be important.”

Too Many Unknowns Preclude Early Adoption

MedPAC’s recommendations contain many problems. The advisory body’s data and analysis is shallow and may not indicate what would really happen under the system, say the AHAand the National Association for Home Care & Hospice.

There are too many missing details for CMS to move forward with PAC PPS implementation, the trade groups also agree. For example, a combined assessment form hasn’t even been solidified yet, AHA notes.

The MedPAC recommendations don’t spell out how home health patients who aren’t discharged from an acute care facility before admission would be affected, NAHC says.

Bottom line: A PAC PPS proposal just needs more time, the AHA urges.

“MedPAC encourages a ‘rush to reform’ while post-acute care is a moving target given the numerous reimbursement system changes underway in many of the PAC sectors, the application of value based purchasing innovations, PAC bundling, and other systemic reforms that may completely change the PAC environment,” NAHC stresses.

Before implementation, CMS “must complete a list of activities that is, admittedly, long but we believe achievable since CMS has deep experience with prior payment systems that have required identical actions,” MedPAC says in the report.

Markette predicts that there will be more problems than MedPAC acknowledges when it comes to making PAC PPS site-neutral. “How will this be done to have a uniform model across the spectrum? Costs are very different across the various models,” he says. “Facilities have buildings to deal with. Home health has employee overtime and driving, as just two examples. They both use nurses, etc., but they are not providing exactly the same care. This is not a case of the government contracting to purchase widgets.”

MedPAC claims that since many HHAs will see higher payment under a PAC PPS, they will want a faster transition to the payment system.

But Markette suspects that the industry will end up losing reimbursement under the eventual PAC PPS model. And that’s despite the fact that home health spending is very low, and saves the Medicare program money by keeping patients out of pricier institutions. MedPAC just “keeps trying to reduce home health,” Markette tells Eli. “They just don’t seem to see the forest for the trees.”

Markette continues, “the 80s and 90s are behind us and HHAs really are not getting rich off of Medicare.”

NAHC notes that at least Congress has shown no enthusiasm so far for adopting an earlier PAC PPS.

“I would assume 2021 is unlikely,” Markette adds. “But given how adept CMS is at implementing really bad ideas, it might happen.”

Note: See MedPAC’s June report, Medicare and the Health Care Delivery System, online at www.medpac.gov/docs/default-source/reports/jun17_reporttocongress_sec.pdf.