What Does the Home Health Rule Really Mean?

CMS released the final 2014 home health payment rule on the quiet Friday before Thanksgiving week. As you have no doubt heard, the final payment rule implements a 14 percent payment reduction for home health providers across the years 2014-2017. Estimates show that by 2017, 43 percent of all home health agencies in the U.S. will have negative Medicare margins as a result of this payment rule. VNAA, along with other allied organizations, continues to analyze the rule and to educate and activate Congressional allies.

Meanwhile, I had the opportunity to speak with a high level White House official this morning at a conference focused on care transitions. Many of the earlier presentations had stressed the importance of relationships among providers and availability of "community based organizations" (CBOs). The White House official outlined many of the ACA-created programs to support innovative new care models and then asked for feedback and comments on how they could continue to advance these models and how to address any challenges. In my conversation with this official, I noted the importance of non-profit home health providers in these models and the dichotomy presented by the recent home health payment rule. He responded with two essential points: 1) Congress mandated the payment reductions; and 2) if CMS stopped reducing payments to "fragmented" models, it would dramatically slow transition toward the new and more innovative models currently in testing.
And THAT, folks, is what this is really about.  
No one believes that fragmented delivery or payment models support effective care delivery and quality outcomes. Certainly, a key and laudable goal of the ACA is to improve care delivery and outcomes through coordinated, longitudinal and preventive care. We know that successful achievement of this goal requires a team-based approach that brings together the patient, family and other caregivers, primary care, specialty and acute care providers. For nearly one-third of Medicare patients, this team includes home health providers of skilled nursing or rehabilitation therapy services.
Yet, the home health industry was not included in the models envisioned by the ACA, other than as a revenue raiser for the legislation. What we see now, as reinforced by this White House official, is a concerted effort to eliminate a payment structure that supports a care model that is less expensive than other institutional models and, more importantly, directly aligns with strategies to prevent initial hospitalizations and to avoid unnecessary readmissions. Congress, however, does not agree with this White House official as evidenced by the fact that over fifty-one senators and 142 representatives signed two letters to CMS raising serious concerns about the home health benefit and its proposed implementation of the rebasing provision.   
Many VNAA member agencies have developed successful partnerships with primary and/or acute care providers to provide home health services. Both public and private organizations and systems are spearheading and funding these models. VNAA and our members recognize that these models can provide higher quality care at lower costs to achieve better outcomes. Yet, we will continue to strongly question policies that jeopardize access to community-based home health services for the goal of driving care delivery innovation. 
So, what does the home health payment regulation really mean for non-profit providers?  I see at least four lessons:
1) We must accelerate efforts to demonstrate the value of home health providers in new care delivery models to support our nonprofit providers as they engage in larger community-based programs or health systems.
2) We must more clearly map real home health costs associated with specific patient populations, clinical conditions and quality measures.
3) We must begin conversations to move away from the traditional 60-day episode.
4) We must prepare for a similar conversation on hospice payment rates.
We have our work cut out for us. 


By: Michael Hamaker
On: 12/04/2013 14:55:56
Every agency should be creating a value report that includes agreed upon value for certain cost avoidance to payers and health systems. How many dollars does one reduced ED visit equate in cost avoidance? Avoided reshospitalization? Palliation care? Perhaps we could all work together to work on a value report - I know we have it on our radar screen.

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