NAHC President on Pre-Claim’s Chilling Effect, End of the Hospice Honeymoon

The home health, personal care and hospice industries are—again—in the midst of rapid and profound change.

Courtesy of NAHCThe Centers for Medicare & Medicaid Services (CMS) is rekindling its Pre-Claim Review Demonstration (PCRD) efforts, while proposing a new payment system known as the Patient-Driven Groupings Model (PDGM). Meanwhile, the hospice space is seeing explosive growth, and the home health industry is undergoing a wave of targeted consolidation, partially driven by an infusion of private equity investment.

And that’s not to mention the U.S. health care system’s broader shift from volume to value.


The National Association of Home Care & Hospice (NAHC) has been watching the changes on behalf of its roughly 33,000 home care and hospice provider members from its headquarters in Washington, D.C. Helming the advocacy group is NAHC President William Dombi, who has  more than three decades of experience monitoring, influencing and deciphering policy.

Home Health Care News caught up with Dombi Monday afternoon at NAHC’s 2018 Financial Management Conference in Austin, Texas.

Here are some of the highlights of that conversation, which HHCN edited for brevity and clarity.


You became president of NAHC in February after serving as interim president. There’s a lot going on right now. From your position atop NAHC, what are the top two or three issues that home health providers specifically should be focused on? Is it PDGM and pre-claim?

The two top issues are very clearly the new payment model proposal that CMS came out with on July 2 and pre-claim review—or RCD (Review Choice Demonstration), the new acronym for it—is absolutely a very high-importance issue for us as well.

Even though it’s just targeted to a few states, we do believe it has serious national implications.

Concern seems to be mixed on pre-claim. Is that because the proposed payment rule has kind of overshadowed it for the time being?

Yes. It was supplanted in the front of their priorities because [PDGM] is such a massive change, and because it affects all home health agencies across the country very directly. If we had not seen the proposed rule on payment, I believe that RCD, the new pre-claim review option program, would have absolutely stayed in the front of minds for those targeted states.

We have not seen the same level of attention to it coming from the states that are outside those areas, though, certainly, there are people who are recognizing the implications of what happens in pre-claim review in Illinois, Ohio, North Carolina, Florida and Texas will be things they have to be attentive to. This is a demonstration program to look at the question of improper payments.

These states were not selected because they were considered the most important improper payment states. More than anything, they were [picked as] a test to determine what [CMS] will do in the rest of the country.

Our office is in Illinois, so we’re keyed into agencies in that state, which have the possible distinction of being in both pre-claim demonstrations.

The data in Illinois is driving this renewal of oversight through this kind of process. The data in Illinois shows that there had been a significant decrease in overall Medicare spending that was triggered by the pre-claim review that started in August 2016 and actually continued after pre-claim review stopped on March 31.

When we look at 2017 Medicare home health spending in Illinois, it’s a $100 million reduction in spending in that state alone. Is it a chilling effect coming from pre-claim review? Is it an appropriate reduction in spending where claims that were improper didn’t find their way into the system? … We don’t have an answer to that.

But you see $100 million reduction in spending in one state in one year, we think the whole nation has to pay attention.

I just spent more than an hour learning about Low Utilization Payment Adjustments (LUPAs) and how that’ll change under PDGM. What are the big things to know on that front?

There are positives and there are negatives about PDGM in comparison to the Home Health Groupings Model (HHGM).

From the positive side of it, Congress came to our assistance early this year and passed legislation that mandated payment reform had to be budget neutral. That is a 4.3% increase in payment rates as a result. That increase alone adds up to nearly $17 billion in revenue that home health agencies will get over a 10-year period compared to HHGM.

In terms of negatives that are there, much of what’s in PDGM in its design and architecture is warmed-over HHGM. When I speak of the architecture, I mean the case-mix adjustment model, similar kinds of inputs and measures to that model, a little bit of adjustment so that we now have 216 case-mix categories with PDGM when there were 144.

That allows for a little more accuracy on the payments there, but we still have two things that are very important with this mix of the architecture.

One of them is the difference of payment that will come from a patient who is admitted to home health by way of an institutional care setting, a hospital or skilled nursing facility. It’s a much higher payment than the same kind of patient coming from the community. That we’re concerned about as creating an incentive to focus the home care delivery on patients being discharged from those setting as compared to patients from the community.

The other architectural thing that’s within it is that the LUPAs are now expanding in their reach. We have a four-visit LUPA out of a 60-day episode today, where once you get past four visits you’re into the full episodic payment. [PDGM] will create a 30-day unit of payment where the LUPA can be as little as two visits until you get a full unit—or a many as seven.

So, over a 60-day period, it is possible to have what would be the equivalent of a 14-visit LUPA today. Going from four to 14 is a big jump.

But the No. 1 issue with PDGM—and it was also with HHGM—is the use of a behavioral adjustment in setting the payment rates.

While Congress said that the payment rates have to be set in a way that would ultimately end up budget neutral, when CMS brings in a behavioral adjustment, it could still be budget neutral based on assumptions that providers will change how they’re doing things and increase spending.

Behavioral adjustments … there are three of them that are in this proposed rule.

One of them is that there will be upcoding on a patient’s diagnosis. Another is that there will be inputs to a greater degree on comorbidities of patients, and comorbidities can affect the payment level. The last one is the LUPAs, where CMS is assuming that providers will add some visits to go over the thresholds on LUPAs, giving them the full unit of payment.

It’s budget neutral when combined with that behavioral adjustment.

You have thousands of providers that are NAHC members. On a typical day, what do they come to NAHC about most? What are their main concerns?

On a typical day, they’re not thinking big policy issues. On a typical day, it is the routine of business. We receive phone calls, emails, almost countless inquires on: “What’s it take to do it right?” “What’s it take to be compliant with the Conditions of Participation (CoPs) in a specific situation?” “What’s it take to do a proper claims submission in a particular situation?” “What kind of referral relationship can we have with a physician in a particular situation?”

It’s that day-to-day kind of compliance and consistency in compliance that [providers] are looking for our aid on.

But we also get [inquires] related to competition all the time: “My competitor is doing this to get referrals … Can they do that?” “Can I do that if they’re doing it?”

During your Washington update here at the Financial Management Conference, you mentioned how you think hospice is where home health was a couple of years ago. What’s important to know about hospice right now and the direction the industry is heading?

I think the big thing to know about hospice is that, as much as it is culturally accepted right now in the country, that puts you on the radar screen with policy people in Washington, D.C., be it the Medicare Payment Advisory Commission (MedPAC), Congressional committees or CMS. When you’re on the radar screen, there is a kind of bias that happens.

You’re on the radar screen because you’ve grown. In hospice, one of the fastest growing sectors within the Medicare program, getting on the radar screen gets people to ask the question: “Is this growth appropriate?”

That kind of prejudice, that bias that’s there on a first level, does trigger action within CMS, within Congressional committees, within MedPAC—in all aspects.

They’ll be looking at payment rates. They’ll be looking at quality of care. They’ll be looking at claims compliance on a technical basis, as well as the merits of: “Is this a terminally ill individual?” That’s what we’re seeing an increase of as hospice finds itself on the radar screen.

We used to talk about hospice being on a long honeymoon. The honeymoon is over at this point.

At the same time, I have to say this: In comparison to home health, hospice is getting a much more cautious next generation of attention. There is a cautiousness, a conservativeness in approaching hospice.

One of the other big pieces of news when it comes to hospice, also mentioned in your Washington update, is how hospices are being positioned to help deal with America’s opioid crisis.

This is a very interesting issue.

When the opioid crisis came about and Congress stepped in to see what it could do to help, no one was thinking about this particular issue, it turns out, other than one member: Rep. Tim Walberg of Michigan.

He contacted us and said: “Is there an opioid issue, a controlled substance issue with hospice?” He had an affinity toward hospice and respected what it did. He started thinking about it, knowing people had opioids in the home for hospice. So, this created an opportunity for us to address something that had been given thought before, but had not had the priority of thought it needed.

The question was: “Did hospice have a role in preventing the diversion of opioids to abuse?” It has a big role, an important role.

We’re going to see hospice be one of the participants in avoiding diversion.

Top surprises so far in 2018? Anything that’s caught you off guard?

I can’t say there were many surprises. Did we expect that the new payment model would come out in this rulemaking? We gave it a 50-50 chance. As time went on, we gave it a better-than-even chance. That wasn’t a surprise.

If there was a surprise, it was actually the re-initiation of pre-claim review because our contacts within CMS indicated that they were not favoring going back into pre-claim review. We can speculate on how that happened. Perhaps a driver was the GAO report that looked at prior authorization in various parts of the Medicare program and revealed some statistics around Illinois’ experience with the spending reduction.

I know NAHC is largely focused on policy, so this isn’t entirely your wheelhouse, perhaps. But mergers and acquisitions for the home health, hospice spaces are hotter than ever. How might that change the overall landscape?

We’re watching it. It may be exciting even to be in the middle of this in some ways. Outcome? To be determined.

But in the various generations we’ve seen of [consolidation], somehow that little guy is still there, in some cases thriving. If you’re going to guess why that’s the case, it’s because they’re nimble and can move quickly, adjust, change.

At the same time, when we’re looking at mergers and acquisitions, it’s not just being driven because of a consolidation of the buying within managed care or otherwise, it’s occurring because people see that the expectation for care in the home is going to continue to grow. It’s a good business to be in, whether it’s traditional Medicare free-for-services, managed care, Medicaid, whatever. There’s going to be a demand for that service out there.

Health care across the world is turning to home and community-based care.

Written by Robert Holly

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