Summary of MedPAC Report Recommendations for Home Care
NAHC Disputes Projected Medicare Margin for Home Health, Opposes Introduction of Home Health Copay
March 21, 2015 09:13 AM
Last week, the Medicare Payment Advisory Commission (MedPAC) released its 2015 Report to the Congress on Medicare Payment Policy. This article provides a summary of the report’s recommendations for home care. Each year, MedPAC releases a report in March with specific recommendations for Congress on Medicare policy. In making its recommendations, the commission examines a variety of factors that relate to payment adequacy: beneficiary access to care, the capacity and supply of providers, care utilization, quality of care, provider access to capital, and financial margins. The National Association for Home Care & Hospice (NAHC) closely follows MedPAC’s recommendations, as well the reception the recommendations receive in Congress.
As NAHC anticipated in previous reporting, the 2015 MedPAC Report reiterates recommendations from previous years for home care. NAHC has been engaging with MedPAC for months and has expressed concern with its findings as well as opposition to specific recommendations.
MedPAC states that Congress should implement a two-year rebasing during 2016 and eliminate the home care payment update for 2016. The Commission bases these recommendations on the claim that home health Medicare margins for 2015 are “high.” The Commission projects a margin of 10.3 percent in 2015. According to the report, the projected margin indicates that the base rate is “well in excess of costs” because home health agencies are “providing fewer visits than anticipated.”
“The declining number of visits per episode has contributed to higher agency margins,” the report states. “Overpaying for home health care has negative financial consequences for the federal budget and the beneficiary; implementing the Commission’s prior recommendation for rebasing would better align Medicare’s payments with HHA’s actual costs.”
NAHC disputes MedPAC’s projected Medicare margin for home care as misleading. MedPAC’s calculation covers a range of margins so wide that it fails to capture a realistic margin for the majority of home health agencies. MedPAC’s calculations also fail to take into account the costs of those home health providers affiliated with hospitals, which have the highest costs of all home health agencies. In reality, over 60 percent of home health agencies will face costs that exceed their total payments received by the end of rebasing in 2017.
NAHC also disagrees with MedPAC’s claim regarding declining visits per episode. Many home health agencies have begun substituting technology such as telehealth for in-person visits. However, MedPAC fails to factor telehealth and its costs into its calculations.
It is important to note that, since the annual payment updates are set in statute, eliminating the payment updates for 2016 would require legislative action. For the reasons stated above, NAHC would oppose such legislative action.
The report also reiterates other recommendations from previous years: the home health case-mix model should be revised to rely on patient characteristics; payment levels for therapy services should be based on patient characteristics rather than using the number of therapy visits as a payment factor; a per-episode copayment of $150 should be established for home health care that was not preceded by hospitalization or post-acute care to encourage appropriate use of such services; payments should be reduced for home health agencies with relatively high risk-adjusted rates of hospital readmissions; CMS should identify the types of patients that might best benefit from home health services and develop quality outcome measures for each category.
With regards to the copayment for home health, NAHC will continue to strongly oppose the introduction of any copayment for home health. NAHC recently stated its opposition to a similar proposal in the President’s budget. As NAHC stated in its Legislative Blueprint for Action, the introduction of a home health copayment would be an inefficient “sick tax” on the most vulnerable Americans and would directly conflict with the goal of modernizing Medicare.
NAHC will continue to closely monitor the reception MedPAC’s recommendations receive in Congress.