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New Study Finds Medicare Home Health Payment Reform May Jeopardize Access for Clinically Complex and Socially Vulnerable Patients

A study published in the June 2014 issue of Health Affairs found mandated updates to the Medicare payment system, known as rebasing, will greatly impact patients with clinically complex conditions and social vulnerability factors, as they have substantially higher service delivery costs than other home health patients. This means vulnerable patients with complex conditions represent less profit for home health agencies and could reduce such patients' access to care as Medicare payments decline and agencies operate on smaller margins.

The study, authored by representatives from the Visiting Nurse Service of New York, (VNSNY) CenterLight Healthcare and the Visiting Nurse Associations of America (VNAA) identifies considerable variation in Medicare margins and service use across a consistent set of patient characteristics including social, clinical and functional characteristic along with the use of home health care. The authors urge policymakers to take further careful examination of home health care use and costs to inform current discussions on Medicare rebasing.

Robert J. Rosati, PhD, the lead author on the paper stated, "Whenever modifications are made to reimbursement policy there needs to be a thorough analysis of the impact of these changes. This study points out the potential unintended consequences of lowering reimbursement for clinically complex and socially vulnerable home health care patients. If the payments are too low compared to the cost of delivering services, these types of patients may find themselves at risk for not receiving the care they need. Our study suggests some options to avoid these pitfalls as further adjustments to payments are made."

"Misguided changes in reimbursement policy that were intended to simply reduce overall program costs will lead to large cutbacks in service delivery for patients who have greater cognitive, health, and functional impairments," said Tracey Moorhead, President and CEO of the VNAA. "At the core of VNAA members' mission is providing care to these vulnerable populations no matter their ability to pay. However, we cannot continue to suffer payment cuts for providing services to those most in need. Attempts to revise Medicare's home health prospective payment system should balance the needs to ensure access to high quality home health services while addressing and enhancing targeted program integrity opportunities."

The data was collected from a national random sample of not-for-profit Medicare-certified home health agencies from the VNAA membership. Each agency submitted data from OASIS, a comprehensive assessment that also serves as the basis for measuring quality improvement and monitoring outcomes, service use by discipline and selected payment information for all Medicare prospective payment episodes that ended in 2011. This data was supplemented with information from the Healthcare Cost Report Information System (HCRIS) data set for home health agencies and the Medicare Provider of Services file.

The Community Health Accreditation Program, an independent, nonprofit, accrediting body for community-based health care organizations, provided financial support to the listed organizations to conduct this study.

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