NAHC’s Dombi: CMS Needs to ‘Back Off’ RAP Proposal, PDGM Assumptions

The looming Patient-Driven Groupings Model (PDGM), a potential hospice carve-in under Medicare Advantage (MA) and the expanding Review Choice Demonstration (RCD) are just a few of the developments reshaping the current landscape of home health and hospice.

As if those three items aren’t enough, providers are also facing the continuing Value-Based Purchasing Model (VBPM), emerging paperwork requirements and unyielding staffing troubles. The bottom line: It’s going to be an exceptionally busy time for those in the home-based care world over the next several months, according to National Association for Home Care & Hospice (NAHC) President William A. Dombi.

“This is an industry in a world of health care that is constantly under change,” Dombi said Sunday evening during the opening address at the NAHC Financial Management Conference in Chicago. “This year is no exception to that.”

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The home health care industry, in particular, has seen relatively stagnant agency numbers, with spending growth remaining flat at about $18 billion per year. At the same time, utilization trends show a slight decline in visits per episode and episode per patient.

While some home health statistics appear to have plateaued, the industry is partly buoyed by the fact that more patients are coming into service from the community than ever before. The same could be said for home care and hospice providers as well, according to Dombi.

“I think we’re seeing the most important trend that you could imagine in health care,” Dombi said. “And that is the increasing number of community admissions — people coming directly from their own home — into home care services, be it home health, private-duty personal care services or hospice services.”

Home health priorities

When the Centers for Medicare & Medicaid Services (CMS) released its home health proposed payment rule for calendar year 2020 on Thursday, the agency doubled down on PDGM’s widely opposed behavioral assumptions and outlined plans for eliminating Requests for Anticipated Payment (RAPs) by 2021.

Ramping up advocacy on both points is an immediate priority for NAHC, Dombi said.

Broadly, PDGM’s behavioral assumptions include CMS’s belief that home health agencies will always “upcode,” or choose the code linked to the highest reimbursement levels. Additionally, CMS believes agencies will always work to provide the necessary number of visits to take them out of Low-Utilization Payment Adjustment (LUPA) range.

In other words, Dombi said, CMS is giving agencies “a license” to automatically add visits and focus on profit when coding just to maintain budget neutrality under PDGM, mandated by the Bipartisan Budget Act of 2018.

“Do you want to encourage that kind of behavior just to be even [and] budget neutral overall?” he hypothetically asked.

Meanwhile, when CMS finalized PDGM language in its October final rule, behavioral assumptions equated to a 6.42% cut. Under the proposed rule released last week, PDGM’s assumptions come out to a roughly 8% cut.

“Not everybody could afford an 8% cut. You might be at a 6% margin [level],” Dombi said. “That means an 8% cut puts you underwater.”

If PDGM started in 2019, the average 30-day payment would be $1,753.68, based on the calendar year 2018 rate, according to NAHC calculations. In 2020, also taking into account a 1.5% update included in the Bipartisan Budget Act, that would increase to $1,779.90.

When it comes to RAPs, existing home health agencies will see reductions to 20% in 2020 under CMS’s proposed rule, with new home health agencies blocked from using them altogether. By 2021, no home health agency will be able to submit a RAP.

CMS is proposing to phase out RAPs due to what the agency perceives as high fraud levels. Policymakers are also looking to kill RAPs, Dombi said, because they believe PDGM’s new 30-day units of payment makes them unnecessary.

“We think this is a big issue,” he said. “We think we really need to convince CMS to back off on this proposal.”

Initiating workforce expansion supports, addressing pre-claim review and extending the Medicare home health rural-add on are also among NAHC’s lengthy priority list, Dombi said.

‘Endless growth’

While home health care has its challenges, the home care industry is positioned for “endless growth,” Dombi said. That doesn’t mean it’s completely free of headwinds and smooth sailing ahead, however.

“It’s an area of endless growth, but [it’s] difficult to get your arms around in terms of understanding exactly trend-wise,” he said.

For one, new models of operation are disrupting the home care space, an idea embodied by Honor’s growth, Family Directed’s market entrance and the launch of seemingly dozens of technology startups aimed at senior care.

Other trends in home care include the lack of uniform data, licensure variations and the absence of quality measures, Dombi said.

“But the one [trend] that is very clear [and] very apparent for personal care services is that demand is exceeding the supply,” he noted.

NAHC update

Last year, NAHC highlighted its plans to boost its grassroots efforts and foster a newfound level of transparency as part of a strategic realignment known as “NAHC 2.0.”

So far, those efforts appear to be paying off.

“We can report that NAHC 2.0 is energized, strong, effective and totally engaged in its partnership with all involved with care at home,” Mary Gibbons Myers, president and CEO of Johns Hopkins Home Care and chair of NAHC’s board of directors, told conference attendees.

NAHC membership is at its highest level “in many, many years,” she said. Additionally, attendance was up more than 40% at the 2019 NAHC Financial Management Conference compared to last year.

Enhancing member value, growing NAHC and strengthening advocacy even further remain organizational goals under NAHC 2.0.

“[We have] 21,000 committed individuals ready, willing and able to be the voices of advocacy before Congress and the administration in Washington,” Gibbons Myers said.

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