Bill Would Tie Home Health Payments to Readmissions

Home health leaders are voicing support for the recent introduction of bipartisan Medicare reform legislation that could put home health providers more in the drivers’ seat for coordinating post-acute care yet also increase the financial risks associated with hospital readmissions. 

The Bundling and Coordinating Post-Acute Care (BACPAC) Act is meant to support the coordinated delivery of clinically advanced care in cost-effective settings for the nation’s Medicare patient population.

As drafted, BACPAC would reduce overall Medicare spending for PAC services by 4% over the next 10 years – all without reducing any provider’s rates – and distribute 100% of savings achieved beyond that level to the coordinator, discharging hospital, managing physician, and post-acute care (PAC) providers who serve each patient.


The BACPAC Act (HR 1485) was introduced in the House of Representatives by Reps. David McKinley (R-W.V.), Jerry McNerney (D-Calif.) and Tom Price (R-Ga.). Versions of the bill have been introduced in past Congressional sessions.

“For the past two years, we have been working with various stakeholders to create a program that would make Medicare more efficient and improve care for seniors without drastic cuts,” McKinley says in a statement. “This bill will increase efficiency, encourage more choice by putting patients first, and create some significant savings in the process.” 

Through the Condition Related Group (CRG) payment system it establishes, the BACPAC Act brings to PAC services the organization and efficiency that hospitals have long experienced with Diagnosis Related Groups (DRGs), the Partnership for Quality Home Healthcare says.


“CRGs are clinical condition-specific site-neutral bundled payments that will foster greater care coordination, improved outcomes, reduced readmissions, and significant savings – all without provider cuts or increased out-of-pocket costs for Medicare beneficiaries,” the Partnership for Quality Home Healthcare says.

Under the BACPAC model, PAC coordinators—which could be one or more hospitals and/or post-acute providers—and their networks of PAC providers manage a patient’s care for up to 90 days, using site-neutral CRG bundled payments that are initiated on the day of the patient’s discharge from the hospital.

BACPAC would also help reduce the rate of hospital readmissions by holding PAC coordinators accountable for the cost of hospital readmissions, supporters say, noting that BACPAC rewards participants if the total cost of a patient’s care is lower than the patient’s CRG bundled payment amount.  

“BACPAC offers Congress a powerful opportunity to achieve significant savings through positive structural change rather than through higher beneficiary cost-sharing or further provider cuts,” says Eric Berger, CEO of the Partnership for Quality Home Healthcare. “The BACPAC Act puts patient-centric solutions on the table that reward the delivery of coordinated, effective and efficient healthcare and benefit seniors, the Medicare program and taxpayers.”

Written by Cassandra Dowell