Industry Groups Critique Home Health Reimbursement Changes

More home health payment cuts are coming, and home health care groups are fighting back against further proposals to change reimbursement measures. Most recently, industry groups shot back against the Home Health Prospective Payment System Rate Update for calendar year 2017, which had an open public comment period that ended August 26.

In conjunction with the recently-released payment proposal to lower home health payments by $180 million in 2017, the Medicare Payment Advisory Commission (MedPAC) proposed an overhaul of the current payment system for post-acute care settings, which would affect how much providers are paid each year from the Centers for Medicare & Medicaid Centers (CMS).

Much of the proposed new system aims to meet goals outlined in the IMPACT Act of 2014, including reducing health care costs, improving care management and shifting toward value-based purchasing. At the same time, MedPAC has recommended deeper cuts for home health reimbursements, citing that Medicare has overpaid for home health care since the prospective payment system was created in 2000.


Home health care groups have made their voices known that many of the proposed changes could have numerous negative impacts on home health beneficiaries and agencies.

The Case for No Cuts

The American Hospital Association (AHA), a group that includes approximately 1,100 hospital-based home health agencies, offered comments against some of the proposed changes that could take place in the next few years, including the outlier payment changes, which would require home health agencies to report services in 15-minutes units, rather than the total cost per visit.


AHA is concerned this change would give “equal weight to each 15-minute increment of care,” the group wrote in its comments. This could result in shorter visits receiving substantially less payment and leave out other costs associated to the care, including travel time.

“As such, we encourage CMS to refine the proposed policy to give greater weight to the initial 15-minute units to ensure such fixed costs are accurately reimbursed,” the AHA wrote.

The group also urged CMS to consider full reimbursement for partial 15-minute units to avoid a “reporting cliff,” where agencies would be incentivized to not provide care outside of 15-minute reporting intervals.

The AHA also expressed concern over performance-related Medicare cuts within the home health value-based purchasing demonstration, which places up to 8% of a home health agency’s payment at risk.

“The AHA believes placing up to 8% of home health agency payment at risk for performance is too much, too fast, especially in light of the significant Medicare payment reductions home health agencies have endured in recent years,” the AHA wrote.

The group is not the only one within the industry to believe the payment risks are too high, within the value-based purchasing demonstration and in other proposed changes.

The Alliance for Home Health Quality and Innovation, a membership-based non-profit organization comprised of not-for-profit and proprietary home health care providers, also recently commented on the proposed payment cuts for 2017, which they say threaten some of the most vulnerable Medicare patients, who may also tend to be minority populations.

“The rebasing and case mix adjustments that will result in home health payment rate reductions jeopardize access to quality care for patients who are in greatest need of protection,” The Alliance wrote in its comments. “Moreover, the rate reductions threaten the ability of home health providers to make necessary investments to provide better care for patients and the entire health care system.”

The group recommended that CMS rethink the impact that cuts could have on its home health population.

New Program Burdens

The Alliance also took aim with CMS’ recent pre-claim demonstration, which began in Illinois earlier this month. The group wrote that the new reimbursement model creates significant administrative burdens and hinders access to home health care, when care should be expanded instead.

“The pre-claim review demonstration, which CMS announced in June of this year, compounds the already complex process of delivering home health care and severely threatens patient access to care in the identified states (Illinois, Florida, Texas, Michigan, and Massachusetts),” The Alliance wrote. “The pre-claim review demonstration is a major concern for a growing population of Medicare beneficiaries who rely on home health care to provide high-quality care in their preferred home setting.”

Numerous industry groups stood up against the pre-claim demonstration, urging CMS to drop the measure over numerous concerns related to physician requirements and more.

The open comment period for home health agencies to submit comments on the prospective payment system changes closed on August 26. CMS has not yet released a final rule on home health reimbursement changes.

Written by Amy Baxter

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