NAHC’s Dombi: CMS Putting Home Health Providers Under the Gun

Home health providers are under more pressure today than arguably ever before.

The immediate battle remains the Patient-Driven Groupings Model (PDGM), which could pose an 8.01% cut to providers if its assumption-based behavior adjustments aren’t addressed through Congressional action. But there are plenty of smaller skirmishes taking place in the background as well, according to National Association for Home Care & Hospice (NAHC) President William A. Dombi.

They include the proposal by the Centers for Medicare & Medicaid Services (CMS) to phase out Requests for Anticipated Payments (RAPs) in 2020, ongoing minimum wage hikes and antiquated physician-certification requirements — just to name a few.

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And a big underlying issue not getting the attention it deserves: the steady elimination of the add-on payments for rural home health providers that help keep them in business.

Home Health Care News recently caught up with Dombi to discuss the home health landscape at the Washington, D.C.-based advocacy organization’s 2019 Financial Management Conference.

Highlights from that conversation are below, edited for length and clarity.

HHCN: What are the top priorities for NAHC throughout the rest of 2019 and headed into 2020?

Dombi: The home health top priority is the payment model — PDGM. No. 2 for home health would be getting physician-certification authority added for nurse practitioners, physician assistants and the like.

For hospice, one of our top priorities is the carve-in issue for Medicare Advantage. Hospice is not under the gun as much as home health is. But the carve-in is this generation’s No. 1 hospice issue.

Let’s look at the 2020 home health proposed payment rule. What stood out to you?

We anticipated that there would be little change around PDGM and its behavior adjustments because CMS only had a plan of looking for more updated data. As it turned out, CMS … brought that from 6.42% to 8.01%

With the 6.42% [cut], our feelings were pretty clear. We put five-alarm fire bells out on that. With the 8.01% in the proposed rule, there’s not going to be any quieting down from us in terms of advocacy.

I’ve had conversations with several people who think an 8.01% cut would promptly put a lot of providers out of business.

It will, though mainly if providers don’t behave how CMS expects them to under PDGM. The CMS viewpoint is, “We’re not cutting spending on home health with this model. We’re counting for the fact we anticipate home health agencies will choose the higher of two clinical groupings, will add visits to get over LUPA and add some co-morbidity where it’s material to financial outcome.”

Budget-neutrality is not rate-neutrality. Budget-neutrality is spending-neutrality. CMS thinks home health agencies will be fine financially if they change their behavior, which tells providers to change their conduct when they otherwise wouldn’t.

What CMS is asking is not truly related to caring for patients — it’s related to managing a reimbursement model. CMS is almost giving people a license to add visits and code upwards — and that’s not conduct that should be encouraged.

But is the behavior adjustment end of life as we know it? I think the message has been pretty clear to agencies. Listen to what CMS is telling you to do.

CMS is proposing to phase out RAPs and add a new notice of admission requirement. How disruptive would that be?

If your paycheck isn’t delivered on the same timeframe in your next pay period — and is actually delayed by several weeks — what does that mean in your life?

Each of these home health agencies has employees they have to pay. Payroll isn’t going to change. Agencies can’t say to staff, “We’re going to skip the next four, five or six weeks in paying you.” They can’t tell staff they’re only going to get paid 20%, which is what CMS is proposing for RAPs in 2020.

Where will the money come from for that home health business to meet payroll? How will providers meet their contractual obligations in, for example, paying their IT partner on a regular monthly basis? How will they pay the power company to keep the lights on?

The overall annual margin for home health agencies that are freestanding — not connected to a health system with greater resources, with all payers considered — is under 2%. Agencies aren’t sitting around with endless cash reserves.

Maybe over time, they can get into a new schedule for receivables and paying bills that’s more manageable. But from December to January, you might be getting one-third less reimbursement from the Medicare program on an early basis — and you’ll be waiting a minimum of 45 days for the remainder.

We see this as a very high-risk aspect of the proposal. NAHC is going to oppose it. We don’t know if there’s a middle ground for CMS relative to RAPs.

When you look at the RAP issue, what’s CMS’s primary reason for doing this? A handful of scheming, fraudulent providers of services that took advantage of the system by running for the hills after submitting wraps. A handful.

The risk of having RAPs is much lower for CMS than getting rid of RAPs is for home health agencies.

You’re over on Capitol Hill a lot. There are a couple of key pieces of legislation — S. 433 and H.R. 2573 — aimed at refining PDGM and getting rid of assumption-based behavior adjustments. What’s that chatter like around those bills?

There’s been a lot of chatter, which is a good thing. When we’re in the mix, when we’re in the conversation and having active discussions with people in power, it gives us room for cautious optimism.

I’ve been explaining to people that I think there are two wildcards. That’s whether we get a score from the Congressional Budget Office (CBO) — a good score — and whether there’s a vehicle for the legislation to latch onto.

One would anticipate it’s going to be later rather sooner when we’ll see that happening. Odds are there will be fourth-quarter legislative action over third-quarter action.

If something is passed later in the year, could PDGM potentially be pushed back?

There’s no need for a delay. Maybe I’m overstating what CMS’s capabilities are, but if you were to get rid of the behavior adjustment on Dec. 30, they could put out a notice on Dec. 31 to say the rate is … 8.01% higher than what was originally set.

But CMS maybe says, “We have to put out a 60-day notice on that.” There are a few little screwy things in the mix, but I don’t think any approved legislation would delay PDGM.

Increasingly, I’ve seen immigration brought up as an important issue in the home-based care world. What is NAHC’s view on immigration reform?

Immigration is a very sensitive topic in Washington. We’re taking an approach that’s similar to the one we’ve taken on minimum wage rising to, say, $15 an hour or even higher. We’re not going to say, “You have to raise the minimum wage.” But we’re also not going to oppose doing that.

We’re not going to say, “This is what you need to do about a border wall or immigration policy.” Instead, we’re going to point out what the consequences are of certain potential actions that take place.

About 25% of all personal care service workers are recent immigrants. Our country’s history tells us that the hardest and lowest-paying jobs are often taken by the next wave of immigrants. And guess what? The demand for personal care services and home care is only growing — and it will for quite a while.

If it weren’t for immigrants in home care, access to care would be significantly lower than what it is today.

What issue isn’t getting the attention it deserves right now in home health care?

Rural add-on. We’ve gone deep-diving into the data. The Senate Finance Committee was the instigator of the change we’re now dealing with — the phase out and targeting approach. They wanted to do that because of their own work and MedPAC’s recommendations that suggested there’s no reason for rural add-on.

In some cases, there are providers doing quite well in rural areas. That makes it difficult to defend the rural add-on across the board. We’re exploring alternatives to the policy in place today, trying to find other options.

There is a very fragile picture for some rural home health agencies. They can’t afford losing the rural add-on and then PDGM on top of that.

What about for home care?

Well, one second. Let me briefly touch on one other point first. Another thing home health providers need to watch for is the notice of admission proposal. When you’re asking 11,500 home health agencies with 1 million or more workers serving 3.5 million patients annually to add a new document to their process — even if it’s a simple one — you’re asking for things to go wrong.

And in this case, if things do go wrong, that could trigger penalties.

Looking at home care, I think it’s still wage-and-hour issues.

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