Home Health, Skilled Nursing At Odds Over Medicare Payment Reform

Home health leaders at a recent Congressional hearing voiced strong support of proposed legislation to revamp the Medicare post-acute payment system, but the role of care coordinators emerged as a sticking point for other provider types and some lawmakers.

Patient-centered care coordination is essential to improving post-acute care and should be a centerpiece of payment reform efforts, according to Steven Landers, M.D., president and CEO of VNA Health Group, the nation’s second-largest not-for-profit home health care provider.

Landers, who also is on the board of the Partnership for Quality Home Healthcare (the Alliance), provided written testimony to the House Committee on Energy & Commerce Subcommittee on Health and appeared in person at the April 16 hearing.


“The unfortunate reality is that, today, it’s really no one’s job to deliver patient-centered care
coordination,” Landers stated in his written testimony. “No one is being paid to help Mrs. Smith with her transition from the hospital or to ensure she is able to get the right care at the right setting for her needs. Today, incentives are not aligned to get all people moving in the same direction and, as a result, patients are not being empowered or assisted, and care is not being coordinated.”

The Bundling and Coordinating Post Acute Care (BACPAC) Act will put these sorts of incentives in place, and for that reason, the Alliance supports the bill, Landers stated. The latest version of the BACPAC Act was introduced last month by Reps. David McKinley (R-W.V.), Jerry McNerney (D-Calif.) and Tom Price (R-Ga.).

The bill would establish care coordinators — which could be providers or third-party entities — to help shepherd people through the post-acute landscape. It also would establish bundled payments for 90-day episodes of post-acute care. The care coordinator and providers who offer services to the patient would earn financial rewards if costs are less than the bundled payment amount, but they also would be on the hook for hospital readmissions.


While Landers focused on the fact that care coordination often is totally absent under the current Medicare system, other witnesses raised concerns about how the coordinator would function if BACPAC becomes law.

Care coordination should be overseen by post-acute providers exclusively, as opposed to third parties, the American Health Care Association (AHCA) asserted. AHCA is the largest long-term and post-acute care provider association in the nation and largely represents skilled nursing facilities (SNFs).

“We believe strongly that providers are the most appropriate and capable entities to manage the care of patients within a post-acute episode, and that inserting a third-party entity between the payer, patients and the provider would create strong incentives to siphon away valuable resources that could otherwise be used in direct patient care,” stated AHCA Board Chairman Leonard Russ in written testimony.

BACPAC generally lacks clarity and fails to explicitly limit the care coordinator role to providers, and therefore, AHCA does not back it, Russ told the subcommittee members. He advocated for an alternative payment reform option designed by AHCA members, which would create a SNF-only bundle.

Legislators also zeroed in on the care coordinator role in their questions.

Rep. Frank Pallone (D-New Jersey) explained that on many occasions, he and his family have gone through a complicated decision-making process to determine what care setting is right for his 91-year-old father’s post-acute needs.

“I would hate to think that those decisions would be made by some coordinator … some third-party who has some sort of financial incentive to make that decision,” Pallone said. “There’s such variation not only in nursing home versus home health, but the individual places, in my opinion. Whether I think the nursing home or [inpatient rehabilitation facility] is better than the other has more to do with it than whether I go to the nursing home, per se.”

Rep. John Shimkus (R-Ill.) said the reverse could be true as well, with a lack of guidance resulting in poorer choices and increased costs.

“The challenge is, you’re given a list [of post-acute providers and told] ‘Pick one,’” he said. “You don’t have anyone to help you through that.”

Creating an effective PAC care coordinator may be a process of addressing the concerns both of Pallone and Shimkus, responded witness Mark E. Miller, Ph.D., executive director of the Medicare Payment Advisory Commission.

“You’re both right,” Miller said. “You don’t want someone making that decision too aggressively, for the wrong reasons, to save money. On the other hand, you can structure the payment system in such a way that you’ve risk-adjusted carefully for the differences in the patient and you have quality metrics so that … the person giving the guidance gets the highest quality care and also avoids unnecessary services. You don’t want to tip too far in one direction or the other.”

Written by Tim Mullaney

Companies featured in this article:

, ,