Legislation Proposes an Episode Cap in Medicare Home Health Services
October 16, 2013 09:05 AM
Last week, legislation was introduced that would limit Medicare payment when a home health agency exceeds certain threshold limits on the average number of episodes of care. The proposed limits would be 2.7 episodes of care in non-rural areas and 3.3 episodes in rural areas. These limits would be applied in the aggregate rather than to individual patients. NAHC opposes this legislative proposal.
The bill, H.R. 3245, was introduced by Congressman Brett Guthrie (R-KY) and Congressman Jim Matheson (D-UT). Both congressman serve on the House Energy and Commerce Committee, which shares jurisdiction over Medicare Part B with the House Ways and Means Committee. Home health care is a benefit under both Medicare Part A and Part B.
Ostensibly, the proposed legislation is intended to be a program integrity measure designed to control fraud, waste and abuse. NAHC shares congressional concerns on program integrity but does not see this legislative idea as a good way to address any such concerns.
An episode cap runs a risk of imposing a barrier to care for chronically ill Medicare beneficiaries who are entitled to unlimited episodes of covered care. If a home health agency ends up with an imbalance of such patients, its episode average rises and may hit the cap. HHAs then face a financial risk if they admit such patients even if those patients fully qualify for Medicare coverage.
NAHC also believes that the cap may trigger a complete change in the Medicare benefit as “safe” patients are limited to those who predictably need only short term care. Over the years, concerns have been raised that the home health benefit was becoming a long term, non-skilled care benefit. That allegation is unfounded as all Medicare home health beneficiaries must meet a rigorous skilled care test for any continued coverage. An episode cap would push the benefit to short term care without actually revising the benefit itself. No business can provide care without reimbursement.
The genesis of the legislative proposal seems to be the periodic reports from the Medicare Payment Advisory Commission that raise concern about the “Top 25 Counties” in terms of service utilization. In those counties, the average level of utilization finds some home health agencies with over a four episode average per patient. However, there is no evidence beyond the bald statistics that shows any program integrity concerns exist.
NAHC does not believe that HHAs should be presumed guilty of Medicare fraud, waste or abuse as occurs with an inflexible episode cap. Instead, if Medicare has suspicions about the propriety of care utilization, it should target utilization review directly. It may very well be that the HHAs so targeted all provide bona fide, covered services. A claim review is the best way to make that determination. An episode cap is the “nuclear option” at best, to be considered only after all other oversight and enforcement measures have failed. At this point there is no proof that anything is wrong let alone that targeted corrective measures have failed.
In 2010, NAHC developed and successfully advocated for implementation of a 10% cap on outlier revenues in the Medicare home health benefit. The outlier cap was supported only after enforcement measures failed. Also, the evidence was strong that the affected conduct was abusive as more than 60% of outlier claims came from just one metropolitan area. The HHAs that would be affected by an episode cap are all over the country, albeit in some areas more concentrated than others. This concentration warrants a review, not the premature use of the nuclear option.
The Medicare beneficiary advocacy community shares NAHC’s views on the episode cap proposal. The Leadership Council of Aging Organizations (LCAO) has come out strongly against the concept and is expected to vigorously oppose HR 3245.
NAHC has conveyed its opposition to the bill to its sponsors. Any additional activity involving this proposal will be shared through future NAHC Report articles.