Though it’s by definition the delivery of high-acuity care in the home setting, hospital-at-home programs tend to be operated by, and centered around, hospitals.
But there are cost benefits to building these programs around home-based care providers, a Health Affairs article published on Tuesday suggests.
The research came about as authors from Milliman Inc. and AccentCare tried to consider some different options for addressing the logistical challenges of implementing hospital-at-home programs. The Health Affairs article also refers to some research by the same authorship group published by Milliman.
“What our research brought was really thinking from the payer perspective, understanding that there are different options for implementing this kind of care delivery model,” Pamela M. Pelizzari, one of the article’s authors, told Home Health Care News. “How might a payer think about those options differently? As of today, most payers – including Medicare fee-for-service – are paying for hospital-at-home from what we call a top-down approach.”
Pelizzari serves as principal and health care consultant at Milliman.
For context, the authors examined both top-down and bottom-up payment models. The top-down approach refers to a model that is structured similarly to how hospitals are currently paid. This model is consistent with the U.S. Centers for Medicare & Medicaid Services’ (CMS) Acute Hospital Care At Home wavier program.
The bottom-up approach, on the other hand, is structured closer to how home-based care providers are reimbursed.
The authors found that the bottom-up model cost payers a lot less compared to the top-down model. Specifically, the top-down model costs $17,500 per episode and the bottom-up model costs $10,500.
“The payment rates for home health services are lower, and even when you layer on the additional services that would be needed for a home health agency to coordinate a home hospitalization — things like meals, a hospital bed, or other equipment — you still don’t reach the larger cost of an acute inpatient DRG payment,” Pelizzari said. “The cost differential we found between the top-down and bottom-up approaches is driven by core differences in the way payment rates are set for home health versus inpatient services.”
Despite this, Pelizzari and her fellow authors aren’t necessarily pointing to one payment model over the other.
“We’re suggesting that it’s worth considering the value from both perspectives to allow payers the flexibility needed to make sure as many patients as possible have access to care delivery innovations, like home-based hospitalization programs,” she said.
The authors also noted that policymakers designing reimbursement for hospital-at-home programs should consider the role home-based care providers can play in these programs, regardless of the payment model.
“This could simultaneously save payers money, create operational efficiencies and increase patient access,” the authors wrote. “Physicians and hospitals sponsoring these programs should similarly consider the roles home-based care providers could play within current home hospitalization programs. Simply extending the reach of hospitals into patients’ homes is unlikely to allow the promising scale or cost savings stakeholders hope for from home hospitalization programs. Each year, hundreds of thousands of Medicare patients could benefit.”
Ultimately, Pelizzari believes that innovation in reimbursement for these models can drive uptake.
“If we consider that payment policies from the payer side might be what drives providers to either invest in or move on from a care transformation, it’s important for payers to be thinking about whether and how they are paying for these kinds of things,” she said.
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