The No. 1 thing home health providers should be focused on ahead of the U.S. Centers for Medicare & Medicaid Services (CMS) final payment rule is finding any additional opportunities to increase revenue, experts believe.
It may seem like a no-brainer, but if the reimbursement cuts come as proposed by CMS, providers need to be able to identify and capitalize on hidden revenue opportunities.
“Aligning your revenue and cost opportunities as an organization is really, really important,” Robert Simione, principal at SimiTree, said during a webinar Monday. “Specifically, look at your coding and your case-rate mix. What does your documentation look like? Are you truly documenting the acuity of the patient? Are you coding for the right clinical group? What is your primary reason for care? There is always low-hanging fruit to be found in terms of revenue if you look close enough.”
Last month, CMS published its FY 2024 home health proposed payment rule that included — among other things — a decrease in aggregate home health payments by 2.2%, or an estimated $375 million less compared to 2023 levels.
The latest proposal comes after a -3.925% permanent rate adjustment that was implemented in 2023.
The cuts could be devastating for the home health industry, but instead of taking a “woe is us” approach, Simione said now is a perfect time for providers to get their ducks in a row and to start planning for any financial setbacks in the future.
One of the areas to focus on, for instance, is the Home Health Value-Based Purchasing (HHVBP) Model.
“We’re [through] the first six months of value-based purchasing,” he said. “We’re almost done with our first performance year. You should be taking that information from your PIPR reports and creating a plan to see where other opportunities are for improvement. Whether that’s providing education for your staff or making sure your clinical managers are doing the right thing, you need to be prepared for year two and three of this. If you have a 2% decrease now, in 2025 you can be looking at a 4% or 5% decrease, depending on where you sit in terms of value-based purchasing.”
Simione urged providers to look at their initiatives, regroup clinical teams and find ways to make improvements in areas CMS has emphasized.
Additionally, another area where providers should turn their attention is toward the new and updated Low-Utilization Payment Adjustment (LUPA) thresholds.
In the proposed rule, LUPA base rates would increase by 2.8%.
“Medicare says you should be around 8%,” Simione said. “There are a lot of organizations right now that I see at 10%, 11% — all the way up to 15% for LUPA percentage. Providers really need to start looking at their processes clinically. Typically, what we see from LUPAs is a heavy amount of them in the second 30 days. A lot of agencies have figured out the first 30 days and how to avoid LUPAs, but struggle in the second 30 days.”
Where SimiTree has found providers struggle most is clinical management: missed visits, inappropriate discharge timing, holding on to patients for too long or discharging them early.
“We want to make sure that we’re appropriately caring for that patient, which will drive up our value-based scoring and avoid those LUPAs by making sure we’re visiting on time and not losing those visits,” he said. “There are significant dollars there if you can take a LUPA percentage down from about 10% or 11% to 8%. That could offset some of that 2% reimbursement [cut].”
Cost efficiency has to be another priority.
“We have to be as cost-efficient as possible,” Simione said. “We’re getting reimbursed less and less every year but our costs are rising. One of the key things is looking at visit utilization. CMS is saying we’re doing fewer visits. We have to look at how we are doing these visits. What type of disciplines are we utilizing? Do a thorough review of your organization, find out the opportunities and start building out a project plan to improve those areas. They’re either saving costs or generating more revenue.”
Other than operational strategies that can help bottom lines, providers can also look into diversifying revenue mixes.
Researching and investing in Medicare Part B, outpatient therapy, palliative care and hospice are some examples that home health providers should start to look into, Simione said.