September 8, 2015
Time Will Tell
A cut in the Home Health Prospective Payment System proposed rule for 2016 threatens to once again reduce Medicare funding for the vital home healthcare services upon which 3.5 million homebound seniors depend. As a result, lawmakers are taking action that, if successful, will secure a key component of the Medicare program.
By way of background, the Centers for Medicare & Medicaid Services recently proposed to cut an additional $350 million from the Medicare program’s home healthcare benefit. This benefit serves a population of senior citizens and disabled Americans who are documented as being older, poorer, sicker and more likely to be disabled, a member of an ethnic or racial minority, or female than all other Medicare beneficiaries – combined. Due to the significant healthcare needs of this population, the Medicare home healthcare benefit delivers clinically advanced care in the most cost-effective setting available: seniors’ homes.
While any cut of such magnitude would be of great concern, what has really captured the attention of lawmakers and the home healthcare community alike is that it appears to be based on outdated data that does not reflect the true costs of delivering skilled home healthcare services today.
In this proposed regulation, CMS is also proposing a Home Health Value Based Purchasing program that appears to be out of step with the VBP initiatives passed by Congress for hospitals and skilled nursing facilities. Unlike the hospital and SNF VBP programs, which cap total annual penalties at 2 percent, such penalties in the proposed home health variant would start at 5 percent and rise to 8 percent.
Unless modified or set aside in favor of other models, such as a comprehensive post-acute care VBP program recently introduced by the Ways and Means Committee, the HHVBP would impact nine states – Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee and Washington – beginning this January 1. In short, seniors living in those states could soon see yet another threat to the home health delivery system on which they depend.
When CMS released its home health rebasing regulation in 2013, it projected that “approximately 40 percent” of all home health agencies would be operating at a loss by the end of 2017 as a result of that cut. With CMS now proposing an additional reduction of $350 million on top of rebasing, even more agencies will be impacted, placing an even greater percentage of Medicare beneficiaries, providers and jobs in harm’s way.
Adding to lawmakers and advocates’ concern is the risk that America’s underserved and rural communities will feel the brunt of these proposed changes. Indeed, a recent analysis by Avalere Health revealed that more than 600,000 Medicare home health beneficiaries live in rural areas, which are served by some of the most at-risk providers in the US. If left unchanged, CMS’ proposed rule could force many rural seniors out of their communities and into more costly institutional facilities far from home.
In light of these factors, a bipartisan group of lawmakers have authored a ’sign-on’ letter to CMS that calls for important corrections to this regulation before it is finalized. Dozens of lawmakers – Democrats and Republicans alike – are adding their names to this letter, delivering a strong bipartisan message to CMS.
Time will soon tell whether their message is heard.
Eric Berger is CEO of the Partnership for Quality Home Healthcare.