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Home Health & Hospice Week

Reimbursement:

HHAs To Medicare: Don’t Kick Us While We’re Down

Published on Fri Aug 26, 2022

Program is drastically underestimating agencies’ costs of doing business, rule commenters tell CMS.

Home health agencies commenting on the drastic payment cut in Medicare’s 2023 proposed rule took the chance to give Medicare officials an earful on the proposal, with letters ranging from angry to pleading to data-focused.

Recap: The Centers for Medicare & Medicaid Services published the rule in the June 23 Federal Register (see HCW by AAPC, Vol. XXXI, No. 22-23) and took comments on it through Aug. 16. In the rule, CMS proposes a -7.69 percent permanent behavioral assumption adjustment that would contribute to an overall 4.2 percent cut to Medicare home health payment rates, compared to this year’s rates.

At press time, 900 commenters had submitted their feedback to CMS via the public comment process. That compares to just 207 letters last year, but is well shy of the 1,350 comment letters submitted in 2017. (See HCW by AAPC, Vol. XXXI, No. 29 for annual comment letter statistics in recent years.)

Many commenters were furious with CMS for proposing such a steep pay cut.

“The proposed reduction ... of 7.69 percent is an absolute disgrace and puts patients in harm’s way,” rails Dina Ossa from California in her comment letter. “How do you believe any HH agency can survive and/or provide services with the current inflation rate and then an additional cut?” Ossa asks. “We are living and working in a totally different work environment since COVID,” she stresses.

“To ask providers in the home health sector to treat higher acuity and higher complexity patients with a 6.9 percent reduction in reimbursement is irresponsible and frankly, unethical,” blasts Julie Rhoades, a home health physical therapist in Pennsylvania, in her letter. “The healthcare system will continue to fail, with more people continuing to deal with the cycle of minimal treatment in a hospital setting and minimal treatment in home health and outpatient settings, by continuing to reduce reimbursement,” Rhoades warns.

HHAs can barely keep up with demand since COVID hit, points out nurse Kristy Barrett in Ohio in her comment letter. “As home health care is in high demand, it would be a devastating blow to have a reduction in our reimbursement,” Barrett emphasizes.

“The proposed payment rule … will devastate access to home health services for patients all across the nation, but especially in rural and underserved areas,” Kay Findlay in Kansas predicts in her letter.

“Cutting payments to home health does not make any logical sense,” chastises the A Quality Agency consulting firm in its letter. “With a lack of home health services, emergent care and rehospitalizations will increase and costs to Medicare will be higher than funding home health properly,” the firm points out.

“As costs go up, you all continue to hurt patients … with long slow cuts that do not keep up with inflation,” an anonymous commenter from Nevada accused. “We should be getting a 6 percent raise for inflation,” the writer added.

“As a director of home health for the past 23 years, I have to say that this is the most challenging time I have ever faced in my career, and CMS is now wanting to make it even more challenging,” Findlay criticizes.

“Why don’t you cut your own budget by that amount first,” Ossa challenges CMS.

Double-Digit Increases In Staff Salaries Go Unrecognized

Hundreds of HHAs say CMS is failing to take the high cost of doing business into account in this rule — particularly when it comes to staffing.

“In my over 20 years of healthcare experience, I have never seen a time where the financial challenges were so severe as this past couple of years,” John Bradshaw in Idaho tells CMS. Costs “have increased to the point that it is very difficult to provide the care the patient needs and to even stay staffed,” Bradshaw relates.

“Healthcare workers are leaving, which is creating a staffing shortage,” Bradshaw continues. “As a result we have seen wage increases as much as 70 percent. We are struggling with this reality, which is magnified by the fact that CMS will pay us even less in the future to provide home health services,” he laments.

“To stay competitive in our fractured healthcare landscape, we have raised our salaries by 12 percent,” one anonymous commenter reports. “Our margins are very tight,” they say in their letter.

“Labor is the largest expense for home health agencies,” notes University of Pittsburgh Medical Center (UPMC) Home Healthcare President Paula Thomas in the hospital-based agency’s comment letter. “Over the past 2.5 years, the impact of COVID-19 on the workforce has been staggering,” Thomas stresses. “It has resulted in employee burnout, higher employee turnover rates, increased patient acuity, and higher demand for care. Increased expenses have been realized for employed nursing, therapy staff, and ancillary staff.”

To combat these issues, “UPMC Home Healthcare has found it necessary to utilize employee bonuses and incentives, retention, and sign-on bonuses, and significantly increasing rates of pay and enhancing employee benefits,” Thomas reports. “This has resulted in increased employed staff cost by 11.6 percent annually, relative to pre-pandemic levels.”

And the problem is far from over. “On a go-forward basis, we project labor and benefit costs to increase at least 7 percent each year,” Thomas adds.

For nurses, the staffing crunch “is only going to get worse in coming years, since there is a shortage of nurse educators which will translate to worsening nursing shortages in coming years,” warns Melissa Nelson from Utah in her comment letter.

CMS has created problems specifically for HHAs that compete for staff with hospitals, multiple commenters highlight in their letters. “Home health agencies are struggling to hire staff and compete with huge increases in pay by hospitals who have received huge amounts of COVID money,” one anonymous commenter blasts. “Our local hospital system furloughed all their regular staff and were given FEMA nurses during the height of COVID,” they relate. “They saved huge amounts of money and … now they are recruiting nurses with huge bonus[es].”

HHAs “cannot compete with offers with as much as $30,000 sign-on bonuses, and now CMS wants to cut our reimbursement,” the commenter fumes.

“We can’t be competitive with pay for skilled staff, especially with travel assignments garnering all time high wages,” says Melanie Keller in Tennessee in her comment letter. “We have an aging nursing workforce, many of whom retired during the pandemic,” she points out.

“We already have a staffing shortage crisis that we see no end to,” laments Michelle Neyrey, the director of nursing for a small home health agency in the greater New Orleans area. “These proposed cuts will make clinicians leave home health altogether,” Neyrey predicts in her comment letter.

“The expectations and patient needs in home health nursing are the most complex of any [setting], requiring extensive knowledge across many specialties,” says Roberta Conti in Florida, who says she has been a practicing nurse for more than 50 years and holds a PhD in healthcare adminis­tration. “I would not be able to do home health nursing if I had to depend on what I make on a weekly basis,” Conti says in her comment letter. “I’m in the twilight of my career with other financial assistance and love meeting the needs of these elderly patients who … deserve to be treated holistically, with compassion, continuity, effectiveness and efficiency.

“Should rates be decreased, the victims will be the patients, families, and the nurses who are the backbone of home health care,” Conti stresses. “Without nurses, there is no home health care,” she emphasizes.

“With the economy experiencing nearly full employment, this situation is not going to get better in the near future,” warns Joan Doyle, CEO of Penn Medicine at Home, in the hospital-based agency’s comment letter. “The only way home health agencies are going to be able to ensure that they are adequately staffed to meet their patients’ needs is to pay higher starting salaries and increase the wages of those they already employ. Inflation and the effects of the COVID-19 pandemic are not going away in the near future, so the need to pay home health workers more will not go away, either,” Doyle tells Medicare.

“I am currently working in an urban area, but even here, we have open positions that have been posted for a year and are unable to find staff to fill them,” Findlay relates. “Our agency has served four counties in the Kansas City area for over 28 years and has never struggled as much as we have in the past year,” she tells CMS.

Note: The proposed rule is at www.govinfo.gov/content/pkg/ FR-2022-06-23/pdf/2022-13376.pdf.

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