Home Health & Hospice Week

Advisory body hammers therapy problems.

The Medicare Payment Advisory Commission doesn’t limit itself to a straightforward reimbursement cut recommendation. It also touches on these topics in its annual report to Congress released March 15:

• Therapy. MedPAC makes no bones about the fact that it wants therapy out of the prospective payment system case mix methodology. Episodes that qualify for increased PPS payments due to therapy have increased faster than those that do not, the influential advisory body to Congress notes. “The higher profitability and rapid growth in the number of these episodes suggest that financial incentives are causing agencies to favor therapy services when possible.”

MedPAC acknowledges that the Centers for Medicare & Medicaid Services has developed a new case mix system that eliminates therapy as a factor. (See more details of the Home Health Groupings Model in HCW, Vol. XXV, Nos. 32 and 44.) But “this recommendation would direct the Congress to establish a deadline for implementing this change,” MedPAC urges in the report.

• Rural add-on. MedPAC is not a fan of the 3 percent rural add-on for HHAs. “The current rural add-on payment is poorly targeted and most of the funds are paid to rural areas with high utilization levels,” the report says. “The add-on should not be extended. Overall margins for rural providers were 13.2 percent, indicating that, like urban providers, on average these HHAs are paid well in excess of costs and generally do not need an additional subsidy. The untargeted higher payments in all rural areas do not create value for the beneficiary or the taxpayer. Future efforts to address the needs of rural areas should identify specific access problems and develop targeted policies that focus on the identified problems. The design of the current rural add-on payment does not fulfill this principle, and extending the policy appears unwarranted and inefficient.”

Eliminating the rural add-in would be the wrong call, argues consulting firm The Health Group in Morgantown, W. Va. “The rural add-on is important to help in offsetting the additional costs incurred to provide services in certain areas as well as enhance access,” the group says in its newsletter. “The rural add-on remains a high focus area for the home health industry.”

• Surety bonds. Fraud and abuse are continuing challenges in Medicare home health, MedPAC insists. Actions taken to date such as establishing moratoria and pursuing criminal prosecutions help deter fraud, but CMS needs to do more. Requiring surety bonds for HHAs may help, as well as expanding fraud and abuse-aimed initiatives like Pre-Claim Review, the advisory body suggests.
• PAC payment reform. Post-acute care payment systems “do not encourage efficient care and are not equitable across different patient stays,” MedPAC contends. PAC payments “should be based on patients’ different care needs and provide consistent incentives across settings.”

“The Congress and CMS must act to reform PAC payments,” MedPAC insists. The home health and skilled nursing facility PPS methodologies and payment amounts need revision, particularly, according to the report. A unified PAC PPS should shoot for “closer alignment of costs and payments, more equitable payments across different types of patients, and outcomes-based quality measures (with payment tied to performance).”

Note: See the PAC chapter at http://medpac.gov/docs/default-source/reports/mar17_medpac_ch7.pdf.