Home Health & Hospice Week

Don't overlook another blow to your pay.

Home health agencies have high hopes that the Home Health Groupings Model will be withdrawn, or at least delayed, in the proposed payment rule for 2018. But the same doesn't go for the rate cut proposed for next year.

Reminder: In its 2018 Home Health Prospective Payment System proposed rule released in July, the Centers for Medicare & Medicaid Services floated a 0.4 percent payment decrease for home health agencies. That would translate to cutting $80 million from current spending levels. (See more details in Eli's HCW, Vol. XXVI, No. 26-27).

CMS proposes an episode base rate of $3,038.43, which compares to last year's $2,989.97 rate. But case mix changes mean there still will be an overall payment decrease on average. That case mix recalibration also makes it difficult for HHAs to see how next year's payments will compare to this year's.

The vast majority of the 1,350 comment letters CMS received about the proposed rule hammered the agency for its HHGM proposal, scheduled for 2019 implementation (see Eli's HCW, Vol. XXVI, No. 36). But many commenters also took time to remonstrate the agency for its smaller payment cut slated for January 2018.

"CMS is proposing to reduce reimbursement for home health for the fourth straight year," blasted Ray Darcey, president of Aurora at Home based in Milwaukee, Wisconsin, in the hospital based agency's comment letter. "The Medicare home health sector has experienced more rate cuts over the last decade than any other health care sector in the Medicare program and is the only provider type that has not had an increase in Medicare reimbursements since 2009. Any new cuts ... seriously risk the financial and clinical viability of this important low-cost way of delivering care and could result in the loss of home health services in many parts of the country, including Wisconsin," Darcey said.

Many commenters pointed out that CMS is shooting itself in the foot with these continued rate cuts. "The need for home health services is rising due to the baby boomer generation," said Sean Hagey of Missouri in his comment letter. "A rate cut will do nothing to improve quality of care. Home health is vital for helping to keep costs down."

The reduction will translate to a payment cut of nearly $240,000 for VNA Home Health Hospice in South Portland, Maine, said the agency which includes Visiting Nurses of Aroostook, Bangor Area Visiting Nurses, and Hancock County Home Care amongst its branches. Serious underfunding of Medicaid patients compounds the repeated Medicare pay reduction impact, VNA said in its letter.

"The proposed 0.4 percent reduction must be replaced with an overall payment increase that reflects the critical role of home-based care in valuebased health care delivery models," urged ElevatingHOME, the advocacy organization formed by the Visiting Nurse Associations of America. "The home-based care industry has sustained years of payment changes that have not kept pace with the cost of providing high quality care. At the same time, it has been required to invest in burdensome and expensive reporting requirements. This path is unsustainable and further payment reductions will negatively impact home health patients and create barriers to accessing care."

Home care providers face increased costs for things ranging from recruiting and training staff to health IT, ElevatingHOME said. "The proposed 0.4 percent cut will have the unintended but inevitable effect of reducing investment in infrastructure, thus compromising the future viability of providers," the advocacy group told CMS. "Cutting rates to the extent proposed will ensure that home health providers cannot be successful in the proposed value-based purchasing program or other health care system transformation. It will also ensure that patients and communities are not provided the advantages of new technologies such as telehealth."

Consider These Provider Subsets

The California Hospital Association urged CMS to look at the toll these reductions are taking on hospital-based providers, particularly. "They will be disproportionately felt by hospital-based HHAs, who historically have operated at lower margins than free-standing HHAs and whose services are often integrated with the larger acute care hospital," CAH said in its letter. "During this time of unprecedented change in the health care system, our home health providers must remain in a position to aptly assist their acute and post-acute partners in care transitions and provide services that keep beneficiaries out of costlier acute care settings. As post-acute care payment reform continues, CHA urges CMS to consider the negative Medicare margins experienced by hospital-based HHAs and consider alternative reimbursement policies that take into account ongoing changes in care delivery."

CMS needs "to preserve this critical component in our continuum of care," CAH continues. "If we are to be successful in meeting beneficiaries' need as they age, while still striving to meet CMS's goals in moving from volume to value, HHAs must have adequate resources to make the necessary changes."

Many commenters also noted cuts' unequal impact on providers in rural areas, contributing to potential access problems for a home care services as a whole, or therapy services in particular. Multiple letters expressed support for an extension of the 3 percent rural add-on, although Congress, not CMS, controls that issue.

Note: See the proposed rule at www.gpo.gov/fdsys/pkg/FR-2017-07-28/pdf/2017-15825.pdf.