Why Federal Support For Home-Based Care Is Missing The Mark

Home-based care has experienced a series of symbolic wins in 2023, many of which came from President Biden himself or his administration. But not all home-based care providers feel like victors.

Home-based care is a broad term, and there is a large chunk of providers that haven’t felt the warmth from policymakers in Washington, D.C., of late.

While the president is directing encouragement – and potential resources – toward home- and community-based services (HCBS), self-directed home care and non-medical home care in general, Medicare-certified home health providers have been left behind.

Plain and simple, Medicaid is winning a theoretical policy battle over Medicare, especially as it pertains to home-based care. And therefore, no matter how many times the benefits of home-based care are touted, Medicare-certified providers remain in a tough spot.

“It’s cheaper if we provide the ability for [seniors] to stay in their homes,” Biden said in Philadelphia as he released his proposed budget in early March. “It’s not only the right thing to do, but it’s cheaper for the taxpayers.”

The catch-all term “home-based care” has garnered excitement and lifted up popular models like hospital at home during the public health emergency.

But to best utilize the magic of home-based care, all payer sources have to be leveraged.

That’s not happening right now, which is an issue. And that is the topic of today’s exclusive, members-only HHCN+ Update.

Medicaid, Medicare and home-based care

When the Biden administration first unveiled Build Back Better, a multi-billion dollar investment in HCBS was proposed. There was support for home care in Medicaid, but not in Medicare.

Since then, the administration has continued to support the idea of home care, but only a segment of it. Even if the billions of dollars proposed for HCBS haven’t come to fruition yet, FMAP enhancement led to better Medicaid outlooks in various states, allowing for them to expand support and access to HCBS.

Then, last week, the president announced an executive order and 50-plus directives to government agencies, a few of which were centered around home-based care.

Among them: increased home-based personal care and primary care for veterans; considerations that would uplift the caregiver workforce through Medicaid; and further support for self-directed home care.

That was in addition to the $150 billion the administration allocated in support of HCBS over the next decade in its proposed budget back in March.

Yet, in 2022, the Centers for Medicare & Medicaid Services (CMS) proposed one of the harsher payment rate decreases in modern history to home health care services – an aggregate cut of 4.2% for CY2023. It also foreshadowed future “clawbacks” for perceived overpayments in previous years to home health agencies.

The agency ultimately backed off the immediate cuts, but only to a certain extent. In the final rule, a 0.7% aggregate bump was given to providers, but the ostensible increase was only due to inflationary adjustments included. For all intents and purposes, a -3.925% adjustment was still implemented.

And home health providers are expecting yet another cut in CY2024.

It raises the question: Are policymakers in Washington, D.C., actually committed to improving care and reducing costs through home-based care?

“The [Medicaid-Medicare discrepancy] has only gotten worse,” health care policy expert Lisa Grabert told me. “And I say that based on comments that have been made at the highest level of political rhetoric. The president says he doesn’t want to cut Medicare, and the speaker says he doesn’t want to cut Medicare. I understand from a political perspective why that’s attractive. But we’re not seeing a lot of progress made.”

Grabert is a research professor at Georgetown and Marquette universities. She focuses on post-hospitalization issues within the Medicare program and has previously served as a Capitol Hill aide on the U.S. House of Representatives Committee on Ways and Means.

Providers would argue that one of the best ways to keep costs down in Medicare would be to invest more in home health services, as it is one of the only subsectors effective in saving the overall health care system money.

Instead, while HCBS gets more attention, CMS is looking to cut home health payments, which is a short-sighted view that could lead to near-term savings that will spark long-term problems.

Home health providers are already rejecting referrals at an all-time rate due to staffing woes, which will inevitably force more seniors into facility-based care, a far more expensive option.

“There’s this narrative out there that our margins are super rich, and therefore, we need to cut them back,” Michael Johnson, the head of home health and hospice at Bayada, recently told me. “But a big part of the picture is being left out by CMS, especially as Medicare Advantage increases in penetration.”

Due to that narrative, there’s thousands of home health providers concerned about keeping their heads above water in the next year.

“When [MedPAC] puts out their reports, they could say, … ‘This only represents this percentage of home health care that is delivered,’ just so people have some sense on the full margin picture,” Johnson continued. “Something so it makes clear to the reader, particularly on Capitol Hill, that there’s another part of the story you have to dig into. That’s what worries me, that that part is not in there.”

The Medicare Payment Advisory Commission (MedPAC) has recommended payment cuts to home health care for years. While its recommendations are not often adhered to, readers of its reports are certainly not led to believe that home health care may, in fact, require more investment.

Home health providers are caught in backwards logic, they believe.

“And to the extent that, when you do pursue innovative care – and it might generate savings – it still might play poorly politically, because savings typically are interpreted as a cut [elsewhere],” Johnson said.

There has been legislation introduced to try to fight back against cuts to home health payments, such as the Preserving Access to Home Health Act and the Choose Home Care Act, which would have expanded the home health benefit. Both stalled out.

Just last week, another bill was formed in an effort to get personal care covered by Medicare. Its promise remains to be seen. The Moving Health Home coalition is one of the driving forces of that legislative effort.