The U.S. Centers for Medicare & Medicaid Services (CMS) proposed home health payment rule for 2023 reasonably ruffled feathers across the industry.
When given the opportunity to respond, interested parties pointed out some of the potential effects of the proposal, if finalized. Among them: reduced access to care and a worsening patient-to-clinician ratio.
One of the public commenters on the rule was the home-based care software company Homecare Homebase (HCHB). The company’s comment leveraged its extensive well of data to push back against the proposal and CMS’ methodology.
Home Health Care News recently caught up with Scott Pattillo, chief strategy officer at HCHB, for its latest episode of Disrupt. Pattillo gave a breakdown of HCHB’s comment and what the data says.
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HHCN: I just would love to know how HCHB approached its comment to CMS. I know there are a lot of comments this year, many more than in previous years, for obvious reasons. How’d you at HCHB specifically go about it?
Pattillo: Each year, HCHB produces a model of both the proposed rule and final rule. We take all of the particular providers’ business year to date — all their patients, all their episodes – and we look at how it was reimbursed in 2021. We compare this to how it’s being reimbursed in 2022.
Annually, we’re in the habit of looking at that and making it available to individual providers, so they can understand the breakdown of how that impacts them. But also looking at that in aggregate. We have 36% of all Medicare home health patients that are ultimately being cared for through the HCHB system. We feel like we have a good representative data set to look at how that rule is performing in aggregate.
This year, for example, we saw about a 1% difference in overall impact on the reimbursement compared to what CMS had. That’s usually kind of the starting point.
From there, we begin talking to our various providers, the customers that we work with, getting their take on how it’s impacting them, what they’re seeing, what they’re expecting to be the byproduct. This particular year was such a stark reimbursement cut proposed during a time that costs are rising. The conversations very quickly shifted to the access to care problems, and ultimately, the impact on the patients themselves. That led us to do a much more extensive data study than I think we’ve even done in past years, which … ultimately culminated in the comment letter that we provided. I think it is reflective of both what we see in the data and is also reflective of a shared perspective that we formed with the industry.
If the proposed rule becomes final, as written, what will that do to access to care in home health?
We would certainly expect that any cut at this time will worsen access to care problems across the board.
We were already seeing clinician shortages start to fever pitch, even before the start of the pandemic, and you kind of see that impacting access to care. But obviously, it’s gotten significantly worse since then. Combine that with the cost of the back-office labor, medical supplies and gasoline, which uniquely affects home health, in comparison to other venues of care. All of those costs have risen dramatically over the past two years.
We would expect that the overall reimbursement from CMS would need to increase to cover these costs. Instead, it’s going the opposite direction. Ultimately, that’s straining what they can pay clinicians, and it’s straining their ability to compete in the labor market.
Who do these rate cuts hurt the most in terms of the actual patients?
We’ve historically seen access to care problems hurt the lowest-income members of our society the worst. Our data analysis looked at 10 years of economic data.
Ultimately, the lowest demographic, where the household median income was less than $30,000 per year, had the biggest access to care challenges. Absent some real intentional change we, unfortunately, see no reason to believe this pattern wouldn’t continue.
How are the home health results under PDGM that you’re seeing not in line with what CMS is seeing?
This type of analysis is challenging simply because CMS has not provided transparency with their data and calculation methodologies that they’re basing their assumptions on. I know that the entire provider community would be eager to work with CMS to debate and discuss these models, and ultimately help CMS understand the potential, unintended consequences of some of the proposals they’re making. I’ll share two pieces where what we’re seeing is not in line with what CMS is stating.
First of all, just that aggregate impact. CMS predicted that this year’s proposed rule would result in a 4.2% cut to the industry. In all of our aggregate models, using 36% of the data – which we think is a pretty good representative sample – we’re seeing a 5% cut to reimbursement. It is going to create an even greater impact on access to care.
The second area really is around some of these behavior adjustments that CMS modeled into their PDGM rule initially, and it became an increased basis for their proposals going forward. CMS stated that they expected providers would change their coding behaviors in a couple of different ways, in order to maximize reimbursement in PDGM, both by adding more diagnosis codes each episode, and also by substantially modifying the ordering of these diagnosis codes in order to achieve higher reimbursing clinical groupings. Our data analysis shows a very different story. Modifications to higher reimbursing clinical groupings is only happening 16% of the time. We’re actually seeing a modification to lower reimbursing clinical groupings happening in 11% of cases. We believe this is telling the story about how providers are being more intentional about coding accuracy, and does not support the CMS assumed coding behavior of any sort of substantial increase to the clinical groupings.
Is this evidence that home-based care agencies, in general, need to be keeping data on their own, whether it’s to vouch for themselves in these legislative and regulatory efforts or if they’re approaching payers, like Medicare Advantage plans?
Absolutely, data driven arguments are always going to be powerful. The data this year was, obviously, a major component of the response to CMS, both by us and by other members of the industry. We’re also seeing it used extensively on Capitol Hill, as the industry works with lawmakers to try to help them understand the negative impacts on patients and put that in terms of real figures. Backing up those types of narratives with data-driven facts are always going to be more powerful.
You mentioned managed care and other payers — there is so much data in terms of what’s actually happening on the ground, what we’re actually paying clinicians and how that’s changing. Absent this data, the payers are really kind of making their own assumptions and making their own narratives that can’t be challenged. The more we can provide this data, the more powerful the arguments become.
The number of patients per clinician has increased over time in the home health industry. What does that mean for quality of care? I assume that would worsen, too, if rate cuts are implemented.
Absolutely, 2019 is the last normal year we had before the pandemic, but also before providers started having to adjust for PDGM. And we’re seeing on average, each clinician is responsible for 1.3 more patients over that time period. This is pretty staggering considering these are home-based visits that require extensive in-home time and driving to a patient’s home. Certainly, it’s more challenging to deliver high-quality care when clinicians are stretched more and more thin.
Amazingly, at least by what we can measure, we’re seeing clinical quality largely holding steady, in terms of hospital readmissions. It should be noted that CMS paused a lot of its quality reporting during the pandemic. Ultimately, that reporting may tell a bit of a different story. We can say the agencies have been very mission focused. They’ve been very intentional about deploying precious clinical resources, but it does seem like the rubber band has been stretched very thin and is at the risk of breaking.
Ultimately, you take these existing clinician shortages, you add on all these additional costs, you reduce the reimbursement rate, you create a situation where it’s just incredibly challenging to employ the amount of clinicians needed. It’s getting to a point where all the innovation, all the mission-based care is just not going to be able to stretch without expecting further and further challenges to patient access.