MedPAC: Proposed Home Health Payment Model is Too Burdensome

A proposed new system for tying home health Medicare payments to quality measures is too burdensome on providers and should be streamlined, the Medicare Payment Advisory Commission (MedPAC) stated in a letter to policymakers. MedPAC advises Congress on Medicare policy and it is viewed as an influential panel of experts, although lawmakers are not obliged to follow its recommendations.

The home health value-based purchasing (HHVBP) model would annually adjust payments upward or downward starting at 5% in 2016 and increasing to 8% by 2022 based on 29 quality measures, according to a recently proposed rule. In a letter dated Aug. 18, MedPAC instead called for a more streamlined process with fewer quality measures to lessen the burden on providers.

“The proposed model includes too many quality measures, diluting its focus and increasing the burden of operation,” the letter states. “…Including fewer measures would decrease the administrative burden of operating the HHVBP program.”

Namely, MedPAC suggests quality measures should focus on what is important to beneficiaries, with preference for clinical outcome measures over process measures. The board recommends that agencies only receive credit for performance on any given measure, rather than earning incentive payment simply for reporting data.

MedPAC also urges that each agency’s performance be judged on the care actually being administered to patients, with consideration of its size and historical performance, as opposed to simply measuring based on achievement or improvement, as outlined in the CMS proposal.

“Some allowance for improvement may help agencies adjust to a new HHVBP incentive, but the program should limit the use of improvement measures to the initial three years of operation,” the letter states.

MedPAC’s letter comes after some industry leaders argued the HHVBP model puts home health agencies at greater risk than other kinds of providers in similar setups. But Medicare officials assured home health providers that drastic payment cuts would be rare under the proposed policy.

The model was detailed in CMS’s proposed rule that outlined payment policies for calendar year 2016, which would result in a $350 million reduction in payments to home health agencies, in part to meet Affordable Care Act requirements.

MedPAC consistently has recommended that home health reimbursements be slashed further, arguing that provider margins are high enough that payment reductions would not limit beneficiary access to care due to an inordinate number of closures. The panel reiterated this recommendation in its Aug. 18 letter.

“The Commission recognizes that statute limited CMS’s ability to increase the payment reduction, but we reiterate our recommendation that further reductions would be appropriate and would not imperil access or quality,” MedPAC writes.

Written by Kourtney Liepelt