Home Health & Hospice Week

Industry faces suspicions of care skimping.

The home care benefit has undergone a major transformation under the prospective payment system that took effect in October 2000, and the differences could be smearing home health agencies with an unfair reputation for poor care.

The Medicare Payment Advisory Commission is examining the accuracy of home health PPS. "We have some evidence that suggests with three years of data under this system, that it might not be working optimally for all patients," MedPAC staffer Sharon Cheng said at a March 10 MedPAC meeting.

HHAs have recorded "over-adequate," double-digit profit margins under every year of PPS, Cheng claimed. And patients in the same HHRG require significantly different costs to care for them, she added. That means profit per patient varies widely, and so does profit per agency, industry observers point out.

Furthermore, utilization has changed significantly under PPS, Cheng noted. In 1997, agencies furnished 36 visits per episode, 1,500 minutes of care per episode and 9 percent of visits were for therapy. In 2002, those statistics changed to 19 visits per episode, 945 minutes of care per episode and 26 percent of visits were for therapy, Cheng reported in the meeting. And agencies treat patients for a shorter amount of time under PPS, she maintained.

The range of the margins concerns Commissioner Bill Scanlon, he said in the meeting. "The idea of getting a patient and then not providing enough services is a possibility. And when I look at this range of margins, I say to myself that's not all efficiency. Some of that is stinting," continued Scanlon, formerly with the Government Accountability Office.

Due to the number of HHAs increasing, Scanlon fears abuses. "I worry that we will see some of the same kind of abuse developing over time that we saw under the old system," he said. PPS, Not Agencies, Drives Changes But PPS incentives have created the change in utilization, not agency abuse, industry reps insist. "Why should [providers] be punished when they respond to financial incentives?" asks Chicago-based regulatoryconsultant Rebecca Friedman Zuber. "Part of the goal of PPS was to reduce visits - should you be punished for doing so if outcomes are as good or have improved?"

Patient outcomes have improved slightly since PPS began, says MedPAC's March report to Congress.

"It's important to remember that the intended incentive of the episode-based PPS system was to eliminate excess services that were driving payment," notes Bob Wardwell, the architect of the PPS system when he was with the Centers for Medicare & Medicaid Services.

Even if HHAs are engaging in unscrupulous behavior, they are not likely to be stinting on care, argued Commissioner Carol Raphael in the meeting. "If I wanted to do very well, I would be very [...]