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The final payment rule for home health has yet to be released, but given the Centers for Medicare & Medicaid Services’ (CMS) proposal, providers are becoming increasingly worried about the impact it will have on patient access to care.
Despite the high demand for home health care, providers can not always serve all of the seniors who need these services. This is a pain point for providers that predates the pandemic, according to data from home-based care software company Homecare Homebase (HCHB).
Prior to the declaration of the public health emergency in 2020, the percentage of patients that were referred to home health and then subsequently admitted — or referral conversions — dropped from 79% in 2012 to 69% in 2019.
Providers tried to take on more to relieve some of the strain that hospitals were experiencing during the height of the COVID-19 emergency. Even now, providers are still supporting hospitals.
“There’s more expectations on home health,” Elara Caring COO Ananth Mohan told Home Health Care News. “There’s more pressure on home health as the hospitals come under pressure. That used to be a rural concern, now it’s an urban concern as well. As hospitals are coming under pressure, they’re seeing staffing reductions, they’re asking home health to do more.”
Elara Caring is one of the largest home health providers in the U.S. The Addison, Texas-based provider currently has about 225 offices across 16 states, where its 35,000 workers take care of around 60,000 patients daily.
Despite greater pressure, providers haven’t been in a strong position to take on all of the referrals that get sent their way. Over the past few years, there’s been an additional 11% decline in referral conversions, according to HCHB.
In fact, in 2021 alone, home health providers were unable to admit 2.1 million patients. This is based on HCHB’s pool of data, so it stands to reason that this number is even higher.
One of the main reasons home health providers haven’t been able to admit as many patients is because staffing shortages continue to be a roadblock. There has been, on average, an additional 1.3 patients per clinician since the start of 2019, according to HCHB.
“We’ve got a real capacity problem right now in the industry,” HCHB CEO Scott Decker said during a discussion at HHCN’s FUTURE conference. “You look at all that data saying, more patients per provider, less visits and not enough capacity — and somehow a rate cut is going to help us solve that problem? That’s the interesting dilemma we’ll face.”
Others are in line with Decker. Many believe that a major reimbursement cut at a time when providers are facing financial burdens will significantly worsen these existing patient care access issues.
“Home health is the simplest and the most immediate access to care for people in general, but especially for lower-income individuals,” Jet Health CEO Stacie Bratcher told HHCN. “We believe that any cuts in payment, but especially the ones that they’ve proposed, are going to limit access to care for individuals. Throughout the past couple of years, care delivery for higher-acuity patients has really been pushed to the home, and we have shown that those outcomes are very high and equivalent to those that can be delivered in institutions.”
Founded in 2016, the Fort Worth, Texas-based Jet Health is a home health, hospice and personal care provider that operates in Texas, New Mexico, Colorado and Idaho.
Another factor is that the cost of delivering care has gone up.
“Just in the way we calculate cost per visit, I’d say it’s up more than 6% in the last 12 months,” Mohan said. “And that doesn’t tell the whole story in terms of what’s happening with wages with nurses, therapy support roles, you name it. Salaries have gone up much faster, and we’re having to keep up. It’s hard for a home health provider … to compete with large hospital systems.”
One of the other factors driving up costs for providers is the significant investments they poured into technology and telehealth amid the pandemic.
“We’re not incentivized for those things today in our reimbursement model, because everything’s a physical visit,” Mohan said. “We invest in those things because we care equally about [preventing] rehospitalization, positive outcomes and quality.”
Plus, providers are spending more on fuel as costs continue to rise. HCHB forecasts that providers will spend $123 million in fuel in 2022, an increase of over $40 million compared to 2021.
Low income seniors hit hardest
While less access to care will likely negatively affect seniors across the board, there’s no question that it will take the greatest toll on lower-income individuals.
When examining the past 10 years of economic data, HCHB found that lower income and underprivileged communities had significantly worse referral conversion rates.
After the pandemic started, households where the median income was less than $30,000 had the worst conversion rate overall.
“[They] had the biggest access-to-care challenges,” Scott Pattillo, chief strategy officer at HCHB, told Home Health Care News. “Absent some real intentional change we, unfortunately, see no reason to believe this pattern wouldn’t continue.”
Mohan pointed out that low-income seniors often struggle with paying for care out of pocket.
Bratcher noted that many home health providers, especially those serving rural communities, have had to shut down their businesses.
“[They’ve] closed due to profitability issues, and that leaves underserved markets,” she said. “Those individuals cannot easily access care within their local community, and it’s very challenging for them to travel to receive care, especially specialty care.”
Often, these are already patients that need to receive consistent care.
Typically when rate compression happens, some of the first things that get cut are higher-level and higher-cost services such as specialty care, according to Bratcher.
“[These] are things such as cardiac services or the specialized wound care services that currently are covered under those all-encompassing payments, and that require additional supply costs or additional training for clinicians,” she said. “Those are some of the first things that get cut a bit as providers look to control their costs. Those are some of the things that will be challenges for providers to continue to service if we see additional cuts.”
With the clock ticking, Mohan stressed the need to move away from “blanket rate cuts.”
“I would absolutely push back against that, especially in a world where more is being asked of home-based care,” he said. “From an economic standpoint, we’re not seeing the savings from less hospitalization and less facility stays being passed on to the providers [making that happen].”
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