Home Health & Hospice Week

Large risk pool menaces small providers.

Home health agencies hoping to see big corrections to Value-Based Purchasing’s problems were disappointed with the 2016 HH PPS final rule released Oct. 29.

In the rule, the Centers for Medicare & Medicaid Services gives its justifications for retaining the 8 percent reward/penalty amount, sticking to the 2016 timeline, and keeping some of the program’s most protested measures (see story, p. 307).

Providers may have been most eager to see the risk/reward pool reduced. “The percentages are what makes this program so unworkable,” insists attorney Robert Markette Jr. with Hall Render in Indianapolis. CMS says it wants to experiment with larger incentives, “but my suspicion is that this is simply a test run for another way to shut down providers,” Markette maintains.

Tom Boyd with Simione Healthcare Consultants in Rohnert Park, Calif., agrees. “The HHA Medicare profit margins cannot support the adjustments of up to 8 percent,” Boyd tells Eli. “The smaller HHAs will be hard pressed to survive. That does seem to be some of the intention of the VBP… to weed out some providers.”

If CMS wants “to experiment with larger incentives, they should have looked at providers that have more resources,” Markette protests. “Few home health providers can afford additional cuts on top of the cuts CMS has imposed” in recent years.

CMS says it doubts providers will actually receive the maximum penalty. But the agency estimates that, at the 8 percent level, 10 percent of the HHAs could see a rate reduction of 3 percent or greater, points out the National Association for Home Care & Hospice.

“The 3 percent penalty level … is extremely burdensome,” Markette warns. “I do not see a purpose to a VBP program that will potentially close down quality providers.”

The slightly more gradual implementation isn’t much help, Boyd contends. “The phase-in over time just prolongs the misery.”

VBP also retains another of its biggest problems — shutting the doors of quality providers, Markette believes. “Agencies are not scored in an absolute sense, but relative to the other agencies in their cohort. This means that no matter how well agencies score, there will be winners and losers,” Markette tells Eli. “Unless something changes along the way, by the final years of this program, you will see agencies scoring well in absolute terms (meaning they are providing quality care), but still being penalized for ‘poor performance.’”

The result: “The scale is so broad for HHAs, that this could result in quality agencies being forced out of business,” Markette predicts.

Also: VBP does not necessarily mean overall care will improve, Boyd suspects. “Some providers will adapt to maximize the scoring and not pay as much attention to other factors,” he forecasts. It’s like “studying to pass the test and not to learn the subject matter, as we all did in college or in taking any exam,” he adds.

Winners: Large providers such as chains in the VBP states “will gain market share and have economy of scale,” Boyd says. They “must be dancing in the streets.”

Losers: “The small independent providers will be hard pressed to survive given the VBP and the other cuts also,” Boyd expects.

Note: Sign up for Robert Markette Jr.’s audioconference, “Home Health PPS 2016 Final Rule and Other Regulatory Developments — Here We Go Again!” at www.audioeducator.com/homehealth.html.