[Updated] SNF-Diversion Bill ‘Choose Home’ Introduced, Projected to Save Up to $247M Annually

The home health industry reached a major legislative milestone on Thursday, with U.S. Sens. Debbie Stabenow (D-Mich.) and Todd Young (R-Ind.) teaming up to introduce a new bill to support in-home care alternatives to skilled nursing facilities (SNFs).

Endorsed by the AARP and supported by a long list of home-based care advocates, the Choose Home Care Act of 2021 has been gaining momentum on Capitol Hill over the past several months. If enacted, the legislation would enable certain Medicare patients to receive extended care services as an add-on to the existing Medicare home health benefit for 30 days following a hospital stay.

In addition to receiving skilled nursing or rehabilitation services from their home health provider, for example, a patient could potentially receive meals, non-emergency transportation, remote patient monitoring and more. The idea is to give today’s highly diversified in-home care providers more flexibility and financial support to keep at-risk Medicare beneficiaries at home and out of costlier facility-based settings, in turn saving the U.S. health care system hundreds of millions of dollars a year.


Operationally, many home health providers are already positioned to deliver such all-inclusive care, too, LHC Group Inc. (Nasdaq: LHCG) Chairman and CEO Keith Myers told Home Health Care News.

“Bringing these two things together — home health care and personal care — has been a dream for a long, long time,” Myers said. “Because, if you think about it, many home health operators operate a skilled home health business and a personal care business out of the same building, or right next to each other. You’ve quite often heard LHC Group talk about co- or tri-locating services in the same community.”

Myers and LHC Group have been strong proponents of the Choose Home concept. The Lafayette, Louisiana-based home health, hospice and personal care services provider actually piloted a similar program to offer SNF-level care in the home years ago with Ochsner Health.


“We were caring for patients at a fraction of what it costs to go to a SNF, and the patients were happier,” Myers said. “I knew we could do this at scale, but I never believed that I would see major legislation like Choose Home at this point in my career. Then COVID happened, and this — shifting health care into the home — has been one of the ‘awakenings.’”

LHC Groups delivers in-home care services to patients in 35 states and the District of Columbia. Its national footprint means it can reach 60% of the U.S. population 65 and older, according to the company.

Co-sponsors of the newly introduced Choose Home bill include Sens. Ben Cardin (D-Md.), Susan Collins (R-Maine), Maggie Hassan (D-N.H.), James Lankford (R-Okla.), Bob Casey (D-Pa.) and Cynthia Lummis (R-Wyo.).

“This is a terrific, groundbreaking day. It recognizes that we have a Medicare home health benefit that could use modernizing,” Joanne Cunningham, executive director of the Partnership for Quality Home Healthcare, told HHCN. “Through the Choose Home proposal, hundreds of thousands of Medicare beneficiaries would have the option of going home and receiving home health care at a nursing home level. It’s very exciting, and it’s all about choice, safety and increasing health care options for Medicare beneficiaries in their homes.”

Strengthening the nation’s home- and community-based services (HCBS) infrastructure has become a priority for the Biden administration, but the support behind Choose Home also suggests lawmakers are clearly willing to reach across the aisle in order to reshape the post-acute care landscape, according to Cunningham.

“We have so many Republicans and Democrats who understand and value the opportunity to enhance at-home care options for Medicare beneficiaries,” Cunningham said. “Every time we’ve sat down with lawmakers of both political parties on this topic, the clear message back was, ‘Yes. We’re excited about this opportunity. We see the value in enhancing at-home care for more Medicare beneficiaries.’”

The National Association for Home Care & Hospice (NAHC), LeadingAge, Allies for Independence and Moving Health Home, the relatively new home care coalition whose founding members include Amazon Care and multiple health systems, are among other organizations behind Choose Home. The National Council on Aging, the Council of State Home Care & Hospice Associations and the Forum of State Associations, a division of NAHC, support the bill as well.

“The Choose Home Care Act represents a tremendous step forward for Medicare beneficiaries who would prefer to recover at home, but have been previously prevented from doing so under current policy restrictions,” NAHC President William A. Dombi said in a press release.

Mapping out Medicare savings

Along with meals and transportation benefits, a Choose Home-eligible patient could, if necessary, also receive care coordination and transition support, plus respite and training services for family caregivers.

An analysis from health economics firm Dobson DaVanzo & Associates found that the Choose Home model would generate as much as $247 million in annual savings to the Medicare system, with the bulk of that coming from averted SNF stays. If enacted, the model would lead to savings of up to $2.8 billion over 10 years, according to the analysis.

Based on their own data, home health providers expect the demand from patients and hospital partners would be so high for Choose Home, that the model may even lead to dramatically higher savings closer to $925 million a year.

“Dobson DaVanzo & Associates, their charge was to take the most conservative approach, because when we presented this, we didn’t want to inflate what the savings would be,” said Myers, who co-founded PQHH and serves on its board of directors. “If anything, we wanted to be on the other side.”

Internally, LHC Group estimates that it can provide nursing home-level care for between 55% and 60% the cost of an average SNF stay.

Dobson DaVanzo & Associates limited its focus to relatively low-acuity, shorter length-of-stay cases that likely would not qualify for in-patient rehabilitation facility (IRF) or long-term acute care hospital (LTCH) care.

The idea was to evaluate Choose Home for a population of SNF patients most suitable to home-based extended care services (HECH).

“The HECH add-on would meaningfully expand the Medicare home health benefit and allow expanded choice of care setting for qualifying beneficiaries, specifically allowing more beneficiaries to remain in their place of residence following a hospital discharge,” the analysis reads. “This is particularly important during the ongoing COVID-19 public health emergencies, wherein poor infection control in SNFs and nursing homes has been a contributing factor in patient mortality. In simulations, the HECH add-on could also provide significant Medicare savings when substituting for SNF institutional care.”

As far as payment mechanics, the Choose Home HECH would act as an add-on to a normally paid home health episode under the Patient-Driven Groupings Model (PDGM). HECH payments would be structured as a flat rate falling into one of four groups based on hours of additional services provided during an episode.

For low-needs patients, providing zero to 60 HECH hours, for instance, could trigger a $2,010 add-on payment. For higher-needs patients, providing 241 to 360 HECH hours could trigger a $10,720 add-on payment.

“The average 2020 home health episode payment under PDGM for ‘early admission’ case-mix group cases was $2,040, which is a representative flat rate for the 30-day case in addition to the HECH add-on payment,” the analysis continues. “For comparison, the average per diem Medicare SNF payment in early 2020 for included cases was estimated at about $580 (or about $16,500 for 30 days after accounting for beneficiary copays after day 20).”

The HECH benefit, as designed, is for beneficiaries who require no more than 360 hours of medical supervision, support or care over the course of their 30-day stay. That maximum translates to 12 hours of care per day, on average.

Naturally, Choose Home yields more Medicare savings when the average hours of care per day is lower.

While the Choose Home model has inherent cost-saving ability, it does have at least one aspect that could diminish its financial impact.

In the past, home health providers had been criticized by the Medicare Payment Advisory Commission (MedPAC) and others for over-utilization of their services to maximize payment, especially when it comes to therapy thresholds. Dobson DaVanzo & Associates cautioned a similar trend may play out with home-based extended care services under Choose Home.

“The HECH add-on payment levels could invite threshold effects that could partially reduce savings and yield program integrity inquiries,” the firm noted.

LHC Group’s Myers said the post-hospital aspect of Choose Home would create a “barrier of entry,” to some extent. Still, he said, home health providers must remember the days when they were constantly under fire for improper billing.

“As an industry veteran, I’ve been in this long enough to have seen those bad days,” Myers recalled. “We need to remember those times and the lessons learned.”

Possible pushback

The Choose Home Care Act of 2021 has plenty of backers, but getting it through Congress won’t be an easy task.

For starters, the bill may receive some pushback from the SNF industry, which is still trying to recover from a severe drop in patient volumes following the worst of the COVID-19 virus.

“We adamantly oppose this bill in its current form,” a spokesperson for the American Health Care Association/National Center for Assisted Living (AHCA/NCAL) told Skilled Nursing News in a statement.

Even in the midst of COVID-19 disruption, though, many nursing home stakeholders have publicly expressed an openness to decentralized models of care, believing that facilities will always play an important role in the post-acute care landscape for the sickest of the sick patients.

“Home health has historically been a very close second to skilled nursing for Medicare post-acute discharges,” David Sedgwick, the COO and president of the San Clemente, California-based CareTrust, said in February. “And given the circumstances of COVID, I don’t think anybody’s surprised that home health has bounced back faster than skilled nursing. But I’d say that the narrative around home health permanently taking share from patients from skilled nursing is mistaken.”

“It’s just a very different type of patient,” Sedgwick added. “And those patients, well before the pandemic, have already largely been going home if at all they had that ability to do it.”

Nearly 33% of patients who go to SNFs have identical frailty scores to those who receive care at home, home health industry statistics suggest.

The idea that Choose Home would create more care options for seniors is why LeadingAge supports the bill, the aging services nonprofit said in a statement shared with HHCN. LeadingAge does not believe the bill is only about shifting volume from one setting to another.

“The Choose Home Care Act is not about directing where or how older adults receive care,” the statement said. “It simply provides one element in a range of care options we must make available to older adults and their families.”

Beyond possible pushback, Choose Home also will have to compete for congressional attention at a time when lawmakers are also contemplating trillion-dollar infrastructure packages and other health care reform efforts.

Still, home health insiders are optimistic about the bill’s chances in the Senate, with an introduction in the House likely coming in the not-too-distant future.

“I do think there’s a sense of urgency. I think the pandemic shined a light on some of the weaknesses that we have in our health care system, including this need to expand, amplify and bolster the services that folks receive in their homes,” Cunningham said. “I think our proposal is so compatible with what Americans and policymakers want right now.”

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