NAHC’s Dombi: PDGM Discriminates Against Community Referrals, RCD Could Haunt Home Health Providers

With a slew of regulatory and legislative changes on the horizon — from the Patient-Driven Grouping Model (PDGM) to the Review Choice Demonstration (RCD) — the home-based care industry is poised for massive transformation. Despite federal challenges, the industry’s outlook is more promising than ever, advocates believe.

“The image that you have is so, so positive,” National Association for Home Care & Hospice (NAHC) President William Dombi told attendees at the 2019 Illinois HomeCare & Hospice Council (IHHC) leadership conference last week. “Why? Because you focus on patients first. We’ve got to add compliance in there second in order to stay out of trouble, but this is an incredibly bright future for all of you.”

Dombi weighed in on the legislative and regulatory climate of the home health care industry during his keynote speech at IHHC’s annual conference in Itasca, Illinois, a suburb of Chicago.

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Based in Springfield, IHHC represents and advocates for home-based care and hospice organizations located in Illinois.

Industry growth

While there are a stagnant number of home health agencies across the U.S. — with just under 12,000 nationwide — that number remains among the highest the country has seen since the Medicare program began.

It’s likely more home health care agencies will soon sprout up in Florida, Illinois, Michigan and Texas, Dombi predicts, as CMS earlier this year lifted moratoria in those states. For years, the moratoria prevented new providers from enrolling to open Medicare agencies of their own.

And while some view the home health care industry as saturated, Dombi has another view.

“People do see where the trends are going in health care and find that care in the community is the place to be for a business for the demand that’s growing out there,” he said. “Spending growth has been fairly flat dollars-wise in the Medicare program, but in reality that is showing some growth because we’ve seen some decline in payment rates and the spending then has increased.”

Meanwhile, home care is similarly booming, Dombi said.

“I can’t tell you how many personal care, private-pay companies are out there, how many clients they’re serving, how much money that’s going into that because there’s no publicly reported data,” he said. “But we know … this is a major growth area.”  

All in all, growth across the board solidifies the health care landscape’s shift to home- and community-based services, he said.

“Not a day goes by when you don’t see a health system trying to relabel itself as a community care provider,” Dombi noted. “Not a day goes by that you don’t see payers refocusing.”

Regulatory and legislative changes

On Jan. 1, 2020, PDGM is set to take effect. The new model is intended to remove current incentives to over-provide therapy services and cut the 60-day episode of care unit of payment to 30 days, according to CMS.  

But the model still needs some work, Dombi told conference attendees, again stressing the importance of S. 433, a recently introduced bipartisan bill that would require CMS to base Medicare reimbursement rates on evidence rather than assumptions.

“What changes do they expect in your behavior?” he said. “Inclusion of more secondary diagnosis information in terms of categorizing the patient. Adding in something that was not relevant before: co-morbidities, which will change reimbursement for the patient. Taking the LUPA patients and adding a visit here and there to avoid LUPA payment reduction.”

LUPAs — or Low Utilization Payment Adjustments — are standardized per-visit payments. They are currently issued when agencies provide four or fewer visits during a 60-day care episode to any category of patient.

If the legislation doesn’t pass, agencies could lose significant reimbursement funding, Dombi and other industry leaders have warned.

The bill also allows the homebound requirement for Medicare beneficiaries to be waived in certain instances.

S. 433 is set to be accompanied by a companion bill in the House, which is expected to be released this week, Dombi said.

“The future of this legislation depends on two things: One, whether there’s a vehicle or piece of legislation you can attach to it because it won’t move on it’s own,” he said. “And second, whether the congressional budget office says it costs money or not. If it costs money, we’re going to have to pay for it or adjust the legislation.”

Another change agencies should be aware of is the varying rates PDGM affords for community versus institutional home health referrals.

“Reimbursement rate is going to be somewhere between a $600 and $800 difference for a 30-day payment unit,” he said. “That will create incentives to focus on the in-patient patients discharged to home health and away from community admissions. We do see some repercussions coming from discrimination there. We don’t like what we see in this model, [and] we’ve been continuing to push back on it.”

Dombi also updated attendees on RCD, which was originally set to take effect in Illinois in December but is still without a start date.

RCD would require home health providers to send their Medicare claims earlier in the care process in order to avoid improper payments. It’s essentially an updated version of Pre-Claim Review Demonstration (PCRD) from 2016, which resulted in a reduction of $100 million in Medicare beneficiary spending in Illinois in 2017, Dombi said.

“We still expect to get enough warning — maybe a 30 [or] possibly 60-day warning,” Dombi said to the crowd of Illinois attendees. “We also know one other thing: You guys are probably prepared for it if you continued the practices you did during pre-claim review. [But] ‘if’ is a big if. If you fell back on some of the old practices in terms of documentation, you will be haunted by this business model.”

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