Home Health & Hospice Week

It will be IPS all over again if CMS moves ahead with rate slashing, commenters warn.

The feds seem intent on undercutting one of their most cost effective services, judging from the prospective payment system proposed rule for 2015.

So say numerous commenters on the rule, which was issued back in July (see Eli’s HCW, Vol. XXIII, No. 24). The Centers for Medicare & Medi-caid Services is expected to release the final rule within a few weeks.

In the rule published in the July 7 Federal Register, CMS proposes to reduce home health PPS payment rates by 0.3 percent — a $58 million decrease. “The proposed decrease reflects the effects of the 2.2 percent home health payment update percentage ($427 million increase) and the rebasing adjustments to the national, standardized 60-day episode payment rate, the national per-visit payment rates, and the non-routine medical supplies (NRS) conversion factor ($485 million decrease),” CMS notes in a fact sheet about the rule.

The cut will result in a base episode payment rate of $2,865.57, down from $2,869.27 for 2014. The rate includes wage index and case mix weight budget neutrality factors.

Under the Affordable Care Act, rebasing can occur over a four-year period, with the rebasing reduction capped at 3.5 percent per year. Last year, CMS made nearly the full 3.5 percent cut. But this year, CMS proposes a 2.75 percent rebasing reduction for the base rate and 2.82 percent for nonroutine supplies, after wage index and case mix changes.

Industry Blasts More Cuts

“The 2015 proposed rule includes the second year phase-in of the most significant change in payment rates since the inception of the Home Health Prospective Payment System in October 2000,” the National Association for Home Care & Hospice says in its comment letter on the rule. “The rate rebasing would decrease payment rates by nearly 14 points over 2014-2017 with the 4-year phase-in of rebasing.”

Warning: “Our analysis demonstrates that over 57 percent of existing home health agencies (HHAs) will be paid less than the cost of care with this NPRM by 2017,” NAHC tells CMS in its letter. “Rebasing as instituted in the 2014 rule and further implemented by this NPRM will have the natural and foreseeable effect of eliminating access to care in much of the country.”

“The rebasing is inconsistent with the rate rebasing authority delegated by Congress to CMS, counter to the publicly available data set out in Medicare cost reports, and a vast regulatory overreach if the goal is to reset payment rates while maintaining access to essential services,” NAHC argues.

Numerous other commenters agree with the trade group in their letters. “The industry will not survive the cuts that are currently proposed by CMS in rebasing payment rates,” warns Kathy Lowe of Florida in her letter.

“The proposed cuts to rates shall only serve to destabilize agencies and ultimately have a negative impact on access to home care,” says a representative from the Visiting Nurse Home Care & Hospice of Carroll County in New Hampshire. “The proposed cuts do not reflect the true costs of providing care to beneficiaries.”

The rebasing policy is short-sighted, commenters insist. “In a time where home health is becoming more and more important to the transition of care for the ever increasing complex patient, we continue to cut reimbursement,” protests Melissa Mahaney in Kentucky in her letter. “I understand [the need] to balance budgets and cut health care spending. As a part of a fairly large ACO, I understand the importance of Medicare saving[s]. How-ever, CMS is cutting the very provider that can make the biggest difference in hospital, nursing home, and emergency department spending. Home care when done right can produce high quality results at a low cost,” she maintains.

If CMS continues on this path, the industry will see closures of IPS-era proportions. “I worked during the mid-1990 [interim payment system] cuts in home care and it was tough times,” relates Denise Wilks in North Carolina in her comment letter. “But with the current rebasing that has occurred and continues to occur, it will be even tougher,” she predicts.

Policymakers need to consider the bigger picture, she urges. “With the large population of Baby Boomers aging … the most economical way to manage this from a medical standpoint is to keep them at home with services,” Wilks tells CMS. “It is a proven fact that people improve when in [the] home environment. It also is a more economical means for managing their medical needs rather than [the] state having to pick up the bill with funds to pay for room, board and care.”

Bottom line: “With the cost of living continuing to climb upwards, I don’t know how agencies will be able to continue to operate with cuts in reimbursement for home health services,” Wilks stresses. 

Note: The proposed rule is at www.gpo.gov/ fdsys/pkg/FR-2014-07-07/pdf/2014-15736.pdf.