Home Health & Hospice Week

‘Many agencies don’t even know where to start,’ expert says of VBP prep.

“The most common misconception I hear is ‘VBP won’t really affect us if we just do the best we can,’” relates industry veteran Pam Warmack with Clinic Connections in Ruston, Louisiana. “I don’t think that will be enough,” the consultant emphasizes. “Providers need to study their performance now and determine which areas they are not doing well in and how to begin changing that now,” Warmack urges. (See upcoming issues of HCW by AAPC for preparation tips.)

Home health agencies should factor in the payment model’s many challenges when preparing for its Jan. 1, 2023 implementation:

•  VBP’s complexity. “The biggest challenge for HHAs will be developing a working understanding of the components of the VBP program and how their day-to-day processes need to be modified to meet the challenges,” Warmack tells AAPC. “How can they work on navigating a program successfully if they don’t understand the program?”

For example: “The Linear Exchange Function is difficult to understand,” criticizes Julianne Haydel with Haydel Consulting Services and The Coders in Baton Rouge, Louisiana. (See story, p. 116, for LEF and other VBP definitions.)

“VBP is, in my opinion, very complicated,” Warmack believes. “I have watched multiple webinars and read [Centers for Medicare & Medicaid Services] information and I feel like I need to be a statistician to figure it all out,” she protests. “I don’t know how a provider will know their standing under the program if they don’t have a data metrics analysis software of some kind. Very few providers can afford the type of employee one would need to do the actual calculations and interpret the data,” she observes.

“Some of the terms utilized and scoring methodologies are complex, new and certainly overwhelming,” notes Angela Huff, a consultant with BKD in Springfield, Missouri.

• What’s at stake. Over protest, CMS finalized a pay adjustment of up to positive or negative 5 percent for VBP.

“The typical home health agency would really struggle financially if they received a 5 percent reduction in their Medicare rates,” notes reimbursement expert M. Aaron Little, also with BKD.

“I don’t know how an agency would sustain getting hit with a 3 to 5 percent cut,” emphasizes attorney Robert Markette Jr. with Hall Render in Indianapolis. “It’s going to be pretty fatal,” Markette warns.

“Most providers I deal with are relatively small companies,” Warmack relates. “The profit margins reported by MedPAC are not the reality of my provider friends. A 5 percent loss would be very difficult to weather,” she predicts.

However, the good news is that adjustments shouldn’t be that steep for most agencies right off the bat, experts predict. “I would expect many agencies not to have much movement up or down the first payment year, 2025,” says Sherri Parson with consulting firm McBee.

“The VBP model is designed to push more agencies towards median performance rather than extremes of the full +/-5 percent, so I think that’s really a good thing,” Little says.

• Winners & losers. “VBP does demand focus because of the zero-sum nature of the program,” cautions Linda Scott of Scott Solutions in Arlington, Virginia. “There is a finite pool of money … and for every winner, there are losers,” Scott says.

CMS structured the VBP pilot project that ran for four years in nine states the same way, Markette points out. It appears “CMS liked what it saw,” including the balance of winners and losers, he notes.

• Action items. In addition to figuring out where they stand and how all the data leads to that position, HHAs must then apply that information to figure out how to improve their performance under the program. HHAs have to “determine which areas they are not doing well in and how to begin changing that,” Warmack says.

The problem is that there is just so much data, and so many possible actions agencies could take to affect it. “The elements that make up VBP across OASIS data scoring, hospitalizations and CAHPS survey responses have agencies’ heads spinning about what to tackle first and how to implement plans that will have true impact on outcomes,” Huff laments. “Many agencies don’t even know where to start.”

• Resources. Part of the difficulty in pinning down current performance and mapping strategies for improvement is the sheer amount of time and money it will require.

“It’s hard for a lot of providers to manage the chaos of daily operations, let alone dedicate time in 2022 preparing for VBP to start in 2023,” Little says.

“How much bandwidth do agencies have?” Markette asks. In addition to pressures that have persisted since the COVID-19 public health emergency began, HHAs also have compliance issues such as the employee vaccination mandate that took effect earlier this year, he points out.

And OASIS-E will be hitting at the same time as VBP, on Jan. 1, Huff reminds. OASIS-E and VBP education and training for staff “will take both time and money,” she points out.

“There’s only so much you can do in a day,” Markette protests.

• Maintaining focus. Extra resources aren’t just required at the start, either. After initial preparations, HHAs must “then stay focused in 2023, knowing it will be 2025 before the payment adjustment will apply,” Little says. “The reality is in 2025, many agencies are likely going to wish they have been more prepared back in 2022/2023,” he expects.
• Hospitalization. Acute Care Hospitalization will count for a big chunk of your VBP score at 17.5 percent. That can go up to 25 percent if an agency doesn’t meet CAHPS-based measure volume thresholds. (See 12 VBP and their quality measures in HCW by AAPC, Vol. XXXI, No. 14.) ACH is a “larger scoring item towards an agency’s Total Performance Score (TPS),” so it would be “a big benefit for agencies if they could lower their hospitalization rates,” Parson observes.

But many HHAs have found that needle particularly hard to move for a variety of reasons. “Finding some care planning ideas and pathways to decrease our hospitalization rates” is a big challenge, Parson tells AAPC.