President’s Budget Includes Provisions for Home Health Copays, Additional Payment Cuts for Post-Acute Care Providers
Budget includes other proposals – bundling and value-based payments – impacting home health care
February 5, 2015 10:33 AM
President Obama released his 2016 budget proposal earlier this week, laying out his agenda and legislative priorities for the coming year. Two of the provisions included in President Obama’s FY16 budget are similar to previous proposals that would be of great concern to the home health community. For more on NAHC’s position on these budget proposals, please see NAHC Report, February 3, 2015.
Specifically, President Obama’s budget once again calls for the introduction of a home health copayment - as well as further cuts to post-acute care providers, including home health care.
President Obama’s budget also includes provisions for a bundled payment program for post-acute providers, as well as value-based purchasing for post-acute care providers. The specifics of these four proposals are included below:
Implement Bundled Payment for Post-Acute Care Providers
Beginning in 2020, this proposal would implement bundled payment for post-acute care providers, including long-term care hospitals, inpatient rehabilitation facilities, skilled nursing facilities, and home health providers. Payments would be bundled for at least half of the total payments for post-acute care providers. Rates based on patient characteristics and other factors would be set so as to produce a permanent and total cumulative adjustment of -2.85 percent by 2022. [$9.3 billion in savings over 10 years]
NAHC believes that bundled payments for post acute care should provide an appropriate focus and emphasis on home health. In its most recent Legislative Blueprint for Action, NAHC states that:
“Congress should monitor the bundling pilot program authorized by PPACA to ensure a reasonable and fair opportunity for home health agencies to participate in and/or manage the payment bundle for post acute care. Such an approach would deter unnecessary re-hospitalizations, thus reducing administrative burden and cost, as well as increase the quality and availability of home health care. This approach is comparable to the tried and tested Medicare hospice program where payment is bundled to a community-based hospice program where hospitalization is the exception rather than standard practice.”
Establish Value-Based Purchasing
This proposal would implement a budget neutral, value-based purchasing program for several additional provider types, including skilled nursing facilities, home health agencies, ambulatory surgical centers, hospital outpatient departments, and community mental health centers beginning in 2017. At least two percent of payments must be tied to the quality and efficiency of care in the first two years of implementation, and at least five percent beginning in 2019. [No budget impact.
With regard to value-based purchasing proposals, which are often referred to as “Pay-For-Performance,” NAHC states in its Legislative Blueprint for Action that: “Congress should monitor the progress of the ongoing Pay-For-Performance demonstration and use the findings to guide its consideration of a full-fledged value-based payment system for Medicare home health services.”
Adjust Payment Updates for Certain Post-Acute Care Providers
This proposal reduces market basket updates for inpatient rehabilitation facilities, long-term care hospitals, and home health agencies by 1.1 percentage points in each year 2016 through 2025. This proposal reduces market basket updates for skilled nursing facilities (SNF) under an accelerated schedule, beginning with a -2.5 percent update in FY 2016 tapering down to a -0.97 percent update in FY 2023. [$102.1 billion in savings over 10 years].
NAHC opposes Medicare home health payment cuts, and states in its Legislative Blueprint for Action that, “Congress should reject any proposals to reduce the market basket inflation update or impose additional rate reductions for home health agencies.”
Introduce Home Health Copayments for New Beneficiaries
This proposal would create a co-payment for new Medicare beneficiaries (those who become eligible for Medicare in 2019 and thereafter) of $100 per home health episode, starting in 2019. Consistent with MedPAC recommendations, this co-payment would apply for episodes with five or more visits not preceded by a hospital or inpatient post-acute stay. [$830 million in savings over 10 years].
NAHC opposes the introduction of a home health copayment, stating explicitly in its Legislative Blueprint for Action that: “Congress should oppose any copay proposal for Medicare home health services and prohibit Medicare Advantage plans from charging a home health copay. Reinstating the copay today would directly conflict with the goal of Congress to modernize the Medicare program.”
Establishment of Home Health Surety Bonds
The proposal would increase the required surety bond amount for Medicare home health agencies to an amount that is no less than $50,000 and commensurate with the volume of payments to the agency. [No budget impact] For more on this issue, please see NAHC Report, December 9, 2014.
The President’s 2016 budget also contains numerous additional health care provisions, which can be reviewed in the HHS Budget at a Glance document, which can be found here.
The budget affirms the Administration’s intention to implement and fund the new requirement under the Improving Medicare Post-Acute Care Transformation (IMPACT) Act to survey hospices no less than once every three years, a position that NAHC supports. For more on the IMPACT Act, please see NAHC Report, October 14, 2014.
The President’s budget also proposes an elimination of the sequester cuts, including the 2 percent Medicare payment cut. However, the Congressional leadership is unlikely to agree to eliminate the Medicare sequester cut because it would increase the deficit by well over $120 billion. NAHC Report will provide more coverage and analysis of other provisions in the President’s budget, including a number of Medicaid provisions affecting home and community-based care, in the near future.
While it is unlikely that Congress will give much consideration to the President’s budget this year, the fact that certain provisions targeting home care are again included is cause for concern. Since Congress is struggling to come up with offsets for fixing or repealing the flawed Medicare physician payment formula (SGR), there is the danger that lawmakers could turn to one or more of the President’s Medicare proposals to find savings.
NAHC encourages all of its members to join with their peers and colleagues next month for the March on Washington to continue to fight against misguided proposals such as the reintroduction of a home health copayment or additional payment cuts. Please visit the NAHC Legislative Action Center to take action on this issue.
For more on the March on Washington, please click here.