Home Health Copays, Other Recommendations Included in MedPAC’s 2013 Report to Congress
April 3, 2013 04:36 PM
The Medicare Payment Advisory Commission (MedPAC) recently released its annual report to Congress. In the report, MedPAC makes the same recommendations in 2013 as it did in 2012 regarding home health services. MedPAC based this decision on its belief that access to home health care is adequate, quality continues to improve, access to capitol is sufficient, and profit margins remain high. MedPAC pointed to the growth in the number of home health agencies - over 700 new agencies in 2011 - totaling 12,199 as evidence of access. Regarding profit margins, despite a 5 percent reduction in total payments and a leveling of service volume, average profit margins in 2011 equaled 14.8 percent for freestanding agencies.
The MedPAC recommendations to Congress in 2013 continue to be:
The Secretary, with the Office of Inspector General, should conduct medical review activities in counties that have aberrant home health utilization. The Secretary should implement the new authorities to suspend payment and the enrollment of new providers if they indicate significant fraud.
Congress should direct the Secretary to begin a two-year rebasing of home health rates in 2013 and eliminate the market basket update for 2012.
The Secretary should revise the home health case-mix system to rely on patient characteristics to set payment for therapy and non-therapy services, and should no longer use the number of therapy visits as a payment factor.
The Congress should direct the Secretary to establish a per-episode copay for home health episodes that are not preceded by hospitalization or post-acute care use.
Control of Growth in Use
MedPAC asserts that the high profit margins in home health – an average 17.7 percent between 2001 and 2010 - “have likely encouraged the entry of new HHAs.” They based their first recommendation on the opinion that, although CMS has improved screening procedures for new entrants, many areas of the country with fraud concerns have an overabundance of agencies.
Recent reviews by the Office of Inspector General suggest that there are aberrant utilization practices in these geographic regions. In addition to increased medical review in these areas, MedPAC recommended the implementation of temporary moratoriums on enrollment of new agencies. NAHC has long supported these recommendations.
MedPAC acknowledged that there was a lack of growth in the number of episodes in 2011. They attribute some of this lack of growth in home health to the Face-to-Face encounter requirement that went into effect the same year, and which may have resulted in fewer referrals to home health agencies.
Claims data for 2011 suggest that new therapy reassessment requirements served as a deterrent to what MedPAC describes as manipulation of services to increase payment. According to 2011 claims data, the number of episodes with visits at and beyond the fourteenth and twentieth visit therapy thresholds decreased relative to 2010 after implementation of reassessment requirements. For example, the number of episodes with 14 - 19 therapy visits decreased by 9.5 percent and the number of episodes with more than 20 therapy visits decreased by 9.2 percent. The Report further points to a large jump in episodes with six to 13 therapy visits - the possible cause being the lack of reassessment requirements for this visit range.
NAHC believes that the decline in episodes reaching the fourteenth and twentieth therapy visit threshold, and growth in episodes in the 6-13 therapy visit range, are due in part to the increased number of non-covered visits caused by reassessment scheduling difficulties in multiple therapy cases. MedPAC did not acknowledge this factor in its report.
Despite the reduction in therapy services, MedPAC continues to assert that Medicare should revise the case-mix system and therapy utilization eliminated as a determinant of payment.
Long-Term Care Patients
In a different section of the report, MedPAC implies that home health services are being inappropriately used to care for persons with long-term care needs. According to the Report, there has been a shift from services to persons after an acute care stay to services to persons referred from the community. According to MedPAC, community referred patients have fewer chronic conditions than post-acute, comprise a higher number of dual-eligibles, have a higher incidence of Alzheimer disease, receive more episodes of care and higher levels of home health aide services. MedPAC purports that due to the availability of home health services, “broad coverage permits beneficiaries to receive services in the home when they are capable of leaving home for medical care.”
Over the years, NAHC has repeatedly emphasized to MedPAC that the Medicare statute and regulations support the provision of unlimited home health services to eligible beneficiaries - i.e. homebound persons in need of skilled medically necessary nursing or therapy - regardless of whether their conditions are acute, chronic, long term, or terminal.
MedPAC’s recommendation is to establish a Medicare home health copay that would be applicable to episodes of care not preceded by an acute care stay as a means to decrease home health utilization by individuals referred from the community. NAHC opposes such copays – regarding them as a “sick tax” on home care and a barrier to access.
The Affordable Care Act (ACA) requires the Centers for Medicare & Medicaid Services (CMS) to reduce base rates for providers over a four-year period beginning in 2014 with a maximum reduction of 3.5 percent a year. The reduction may be offset by payment updates. MedPAC recommended a more rigorous application of rebasing to home health, calling for rebasing of home health payments over a two-year period with elimination of payment updates as a means to bring payments in line with costs more quickly.
Despite MedPAC's issuance of these rebasing recommendations, CMS will likely be unable to accelerate rebasing for home health.
In its discussion of services to persons in rural areas, the Report maintains that there is a high level of utilization in many rural areas. According to MedPAC, this may be due to “a maldistribution of the add-on payments Medicare makes for rural home health services.” According to the Report, rural areas generally had utilization similar to that in urban areas in 2008. However, frontier counties - those that average six or fewer individuals per square mile - had significantly lower utilization. In 2008, beneficiaries residing in frontier counties averaged about half the number of home health episodes as in other rural areas.
MedPAC noted that the rural add-on as it now exists does nothing to improve access to care in frontier areas and that Medicare should target payment adjustments for rural areas to those areas that have access challenges, rather than for all rural areas.
The full MedPAC Report can be read here.