Industry Voices—Eliminate misguided Medicare home health cuts

Home care nurse giving patient physical therapy
Home health providers have stood ready to assist their communities, including hospitals and other providers, as COVID-19 has presented a unique threat to the elderly and chronically ill. (Getty/Photodisc)

Americans value the ability to receive healthcare in their homes, especially during the COVID-19 emergency. Home health providers are trusted and proven to help Medicare beneficiaries receive nursing, therapy and aide services in the comfort, safety and security of their own homes, saving the Medicare program millions in avoided facility-based care.

As a matter of policy, policymakers usually agree that evidence-based practices should guide the policy-making process. However, despite this firmly held belief, some recent changes to Medicare payment policy have been based on mere assumptions instead of real-world data.

It’s a practice we’re seeing firsthand currently in the home health sector.

Earlier this year, well before the coronavirus was on the nation’s radar, CMS implemented a new home health payment system called the Patient Driven Groupings Model (PDGM). Much to the concern of home healthcare providers, it included a 4.36% rate cut based on “behavioral assumptions” of how providers might act and might bill for services in the future. For instance, CMS assumed that under a new payment system providers would change their coding procedures to bill the highest amount possible to Medicare, and that they would add extra home healthcare visits in order to avoid low-utilization payments.

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In both of these cases, CMS was wrong. Despite projections and actuarial calculations, home healthcare providers did not change the manner in which they bill or code for services, or how they handle low-utilization payment guidelines. The result: total payments in the Medicare home health program are about 12.5 to 18.3 percent than originally projected – meaning that what Congress intended to be spent on the home health program has been significantly lower than budgeted. This spells trouble for the program, and could impact patient care and the stability of the home health system.

If ever there were a year to not rock the boat for the Medicare home health program, 2020 is it. The COVID-19 pandemic has challenged home healthcare providers as they’ve struggled to keep patients and staff safe from the virus, while delivering care in the safest and most secure environment available.

Home health providers have stood ready to assist their communities, including hospitals and other providers, as COVID-19 has presented a unique threat to the elderly and chronically ill.

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We have partnered with hospitals to safely care for non-critical COVID patients, and managed the delicate needs of pulmonary patients for whom a trip to the hospital (and a COVID diagnosis) could mean death. We’ve added measures to ensure infection control, protect, screen, and train staff, and maintain overall care delivery, only some of which have been mitigated by CARES Act relief funds. And we’ve done it all with the realization that the new payment system, instituted an “assumption based” cut, did not change provider behavior has not changed as predicted. In fact, data thus far in 2020 is revealing that the cut was not needed.

Under Congressional direction, the new home health payment system is to be budget neutral. However the first half of 2020 has revealed it will likely be far from it. Backed with the facts we now have from Medicare claims data, it’s time that CMS discard any previous assumptions and projections of providers’ behavioral response to PDGM – and eliminate the 4.36% cut to home health payment rates.

Sound policy, like good care, is dependent on using facts and outcomes to make changes for the better. Discarding the behavioral rate assumption cuts is clearly the right call.

Joanne Cunningham is the Executive Director of the Partnership for Quality Home Healthcare.