The U.S. Centers for Medicare & Medicaid Services’ (CMS) home health proposed payment rule – which would slash rates by 2.2%, or an estimated $375 million less compared to 2023 levels – drew the ire of the industry’s heaviest hitters during the public comment period.
The comments were critical of the proposed rule itself. They were also critical of the process CMS took to get there.
“UnitedHealth Group has grave concerns that the 5.653% proposed permanent adjustment (cumulative 10% adjustment) will significantly impact the ability of the home health community to ensure beneficiary access to home health services,” Keith Myers, the CEO Emeritus and Chairman of LHC Group and a senior advisor at Optum, wrote in a public comment. “Home health agencies are experiencing challenges meeting beneficiaries’ home health needs due to the implementation of the PDGM payment system and the permanent payment adjustment imposed in CY 2023.”
Optum is the health care services arm of UnitedHealth Group (NYSE: UNH). Its capabilities are vast, and include home-based primary care, home health and hospice. It officially acquired LHC Group – one of the largest home health and hospice providers in the country – earlier this year. It’s in the process of acquiring Amedisys Inc. (Nasdaq: AMED) as well.
Overall, it has 135,000 team members and provides care to more than 100 million Americans.
Last year, CMS implemented a -3.925% permanent rate adjustment.
The continued cuts from CMS would force beneficiaries to look for care from more expensive settings, or forgo care altogether, which do serious damage to overall health outcomes across the care continuum, Myers wrote.
“Reducing home health reimbursement levels in 2024 as the agency is proposing will only exacerbate this decline in access to home health care,” he continued.
Several home health leaders also pointed out that CMS is not required to make these payment reductions. The Social Security Act authorizes CMS to institute permanent and temporary adjustments “at a time and in a manner determined appropriate.”
“For 2024, CMS could use this authority to delay any application of the permanent adjustment until the home health community stabilizes and beneficiaries’ access to vital home health services is restored,” Myers wrote.
Other home health leaders, meanwhile, pointed out that the Biden Administration has been touting home-based care and vowing not to cut Medicare. All the while, it’s cutting reimbursement for home health agencies.
Andrew Baird, VP of government affairs and policy counsel for Enhabit Inc. (NYSE: EHAB), wrote that the recent proposal from CMS is an “intentional policy approach that threatens to erode Medicare beneficiaries’ access to high-quality home health services.”
“Given the discretion that CMS has in the application of any permanent adjustments, the agency’s decision to apply these direct cuts to the Medicare home health benefit flies in the face of the current Administration’s public commitment not to cut the Medicare program for the growing number of America’s seniors,” Baird wrote in Enhabit’s comment.
The Dallas-based Enhabit is one of the largest independent providers of home health and hospice care in the country. Its footprint includes 255 home health locations and 108 hospice locations across 34 states.
Leaders criticized the agency’s “how,” pointing to the lack of research shown in the rulemaking process.
“Nowhere in the proposed rule does CMS indicate that it has conducted any rigorous analysis to measure access to home health services,” Baird wrote. “And we dispute the reliance on the Medicare Payment Advisory Commission’s (MedPAC) opaque and overly simplistic measurement of access to home health on account of the likelihood that it is inaccurate.”
CMS relies on, to an extent, information that is collected by MedPAC. MedPAC is an independent group that advises the U.S. Congress on issues related to the Medicare program.
Home health leaders have often criticized MedPAC’s influence on CMS’ decisions, and are now taking issue with the group’s access adequacy analysis, which – as Baird pointed out – consists of one metric: whether a particular county is served by at least two home health agencies.
“If a county has two or more HHAs, MedPAC deems access adequate for the entire county’s population,” Baird wrote. “MedPAC’s access adequacy analysis uses 2021 provider enrollment and utilization data, meaning that the data that CMS relies on to assess access in 2024 will be three years old before the drastic CY2023 or proposed CY2024 cuts had occurred. Additionally, significant changes in HHAs’ locations and areas of service will very likely have occurred between 2021 and 2024.”
AccentCare leaders also took issue with CMS’ methodologies.
“CMS should conduct an independent analysis of the budget neutrality methodology that was developed by the agency and its contractor to ensure that it is consistent with Congressional intent,” Stacey Smith, VP of public affairs at AccentCare, wrote. “The agency’s current approach to budget neutrality overcorrects home health payments and is destined to negatively impact Medicare beneficiaries — particularly those residing in medically underserved areas and patients with complex medical conditions. The analysis should also examine the payment system to ensure continued access to quality services.”
The Dallas-based AccentCare provides home health, hospice, palliative care and care management services across 31 states.
AccentCare — like many other providers — believes CMS is operating under a “fundamentally flawed” premise.
“To our knowledge, CMS has not undertaken any impact analysis of these significant home health payment reductions, instead relying on MedPAC’s flawed measure of access using the number of beneficiaries that lived in a zip code where a Medicare HHA operated,” Smith wrote. “Measuring access by simply looking at zip code data fails to examine the volume of individuals being cared for by an agency or the patients’ specific needs and resources necessary to improve function and live with greater independence.”
The overarching theme in many of the comments submitted was that the cuts are too much, too soon.
Between rising referral rejection rates, higher staffing costs and macroeconomic trends, further cuts could be detrimental to the industry and to the patients it serves.
“This combination of simultaneous payment reductions and cost increases has already resulted in reduced services, increased open shifts, and patient denials that have reached unprecedented levels,” David Totaro, chief government affairs officer with Bayada Home Health Care, wrote. “This situation will continue to worsen and aggravate already-fraught access-to-care issues for Medicare-eligible Americans who prefer care at home. Without adequate funding, providers will not be able to recruit and retain enough home health care workers and staff the growing number of cases of individuals who wish to receive care at home.”
The Moorestown, New Jersey-based Bayada is also one of the largest home health providers in the country. It has over 360 locations across 23 states and six other countries.
In the company’s letter, Totaro reported Bayada has been forced to deny, on average, 64% of patients referred to home health care in the last year due to the inability to provide services.
Continued cuts to reimbursement will limit access to care even more, Totaro said.
“The agencies that can adjust will be forced to make cuts in critical areas when they should be making investments, resulting in a reduction of health equity for those that rely on care at home,” Totaro wrote. “There will be agencies that are unable to maintain operations under weakened balance sheets and consolidation pressure and will be in jeopardy of closing their doors entirely.”