Home Health & Hospice Week

The fate of your Medicare reimbursement may rest on decisions made this week in Washington, D.C.

In its Jan. 13-14 meeting, the Medicare Payment Advisory Commission's 17 members will vote on five recommendations for home health agency payment (see box, this page).

One of the recommendations unveiled in December's meeting urges Congress to institute a home health copay. The copay was the topic of intense discussion.

MedPAC staff recommended a per-episode, rather than per-visit, copay. "Given the incentive that providers have to deliver more episodes, a per episode copay seems most appropriate," MedPAC staffer Evan Christman said in the meeting.

Instead of the 20 percent copay required in other parts of Medicare, a copay of 10 percent per episode might work better, Christman suggested. That would put the payment at $300 for the average episode that pays $3,000.

Beneficiaries dually eligible for Medicare and Medicaid and benes going straight into home care after a hospital stay would be exempt from the copay under MedPAC's draft recommendation. So would episodes with few visits.

The copay would aim to accomplish multiple goals, noted MedPAC chair Glenn Hackbarth. A copayment could curb unnecessary utilization and decrease Medicare spending. And instituting a copay would put home health on more equal footing with other Medicare services, said Hackbarth, former deputy administrator of the Health Care Financing Administration (now the Centers for Medicare & Medicaid Services).

Many commissioners endorsed the idea of a copay in the meeting. But many also voiced a concern that a $300 copay would be too high and would drive beneficiaries to refuse necessary care.

Under a copay, "providers would experience some decline in demand," Christman predicted.

In addition to recommending the copay, MedPAC should urge Congress to test it before implementing it, suggested commissioner Mary Naylor, a professor at the University of Pennsylvania School of Nursing. "We would really want to make sure that we were not in any way hurting lowincome beneficiaries who absolutely need access to these services and who will absolutely look at that $300 as just a barrier that they can't overcome," Naylor said in the meeting.

The National Association for Home Care & Hospice vehemently opposes institution of a copay. "Studies have shown that copayments dissuade individuals from receiving necessary care," the trade group argues. "We are prepared to do battle on this front once again."

All the commissioners, of course, could agree on taking anti-fraud measures. And most prioritized the fraud-fighting recommendation at the top of MedPAC's list.

"A 17-percent margin ... attracts a lot of people that you don't necessarily want to have in the business," observed commissioner Nancy Kane, a professor and associate dean at the Harvard School of Public Health. Shady providers have low entry costs, "and then it's like gravy," Kane worried.

Using anti-fraud tools like an appropriate, targeted moratorium might be OK, NAHC concedes. But "Medicare has significant power to arbitrarily suspend payments to providers of services and has exercised it in the past in a manner that effectively destroys a home health agency without due process," NAHC protests.

Most commissioners also were enthusiastic about revamping home health PPS's case mix system, given the wide range of profit margins in the industry. "The case-mix is a no-brainer," Kane declared.

MedPAC's suggestion: CMS should remove therapy as a case mix indicator to remove agencies' incentive to over-provide the service, MedPAC plans to tell Congress in its March report.

But the accuracy of the case mix system is much higher with the therapy services in it, NAHC points out. "The current model far outperforms the proposed revised model," the trade group cautions.

The revised case mix would put more money toward rural and non-profit providers, MedPAC's Christman pointed out.

Most commissioners also agreed on stepping up and shortening the rebasing timeline, due in part to visit utilization differences and HHAs' profit margins (see box, this page).

"We expect that some providers may choose to withdraw from the program, but that remaining supply should be adequate to provide adequate access to care," Christman noted.

Reaction was more mixed about the recommendation to re-institute some cost-based reimbursement elements in PPS, by using "risk corridors and blended payment." The recommendation is a carry-over from last year's report.

"To have a prospective payment system you need a well-defined product, and home health is not a well-defined product," Hackbarth pointed out. Thus home health is "ill-suited to a fully prospective payment," he concluded.

"NAHC has long opposed this concept, arguing that it essentially returns home health to cost reimbursement -- an era that most would hope to forget," the trade group says.