Report: CMS’ Proposal Home Health Groupings Model Puts Entire Home Health System at Risk
September 13, 2017 03:53 PM
The Centers for Medicare and Medicaid’s proposed Home Health Groupings Model (HHGM) would cause enormous stress on the home health system, very possibly placing agencies in jeopardy and causing damage to beneficiaries, providers, and the post-acute care system, according to a new analysis from Dobson DaVanzo & Associates, a health economics and policy consulting firm based in northern Virginia.
Dobson DaVanzo & Associates was commissioned in early 2017 to replicate the impact of the HHGM patient grouper and model payment. The analysis finds that the HHGM “would fundamentally change how home health care providers are paid and, in turn, how they deliver care.”
The proposed HHGM would end direct reimbursement for the number of therapy visits and instead base reimbursement directly on patient and case characteristics, such as admission source and episode timing, clinical grouping, functional level, and the presence of comorbidities. The proposed rule would also shorten home health episodes from 60 days to 30 days. (For a full description of what’s in the proposed rule, read this article by NAHC President Bill Dombi.)
The analysis concludes that “historically, when changes of this magnitude were implemented, the field experienced extreme financial distress,” noting that “changes of a similar scale have created unintended effects among agencies and beneficiaries.”
Changes to the home health system in the 1990s, remind the authors, that there was a net 15 percent reduction in the number of Medicare Home Health Agencies and utilization dropped by 29 percent from 1996 to 1999. Program payments fell from $16.8 billion in 1996 to under $ billion by 1999 and the industry did not recover until after 2007.
Dobson DaVanzo & Associates followed the Abt Associates Technical Report and used 2013 datato replicate the HHGM patient grouper and model payment impacts.
The analysis concludes that the HHGM is “highly redistributive of Medicare payments for home health services,” with 27 percent of HHAs experiencing “a revenue shit of at least +/- 20% for some cases under HHGM.” Over 40 percent of “HHAs serving ACO-attributed beneficiaries would experience a revenue shift of +/- 20% for the ACO-attributed case load under HHGM.” According to the analysis, the primary “drivers of the impact ratio are therapy provided, admission source (institutional vs. community), timing (early vs. late), and presence of comorbidities.
The report find that HHGM is an estimated 15% below budget-neutral on revenues, due to the exclusion of certain 30-day episodes which are currently paid under the 60-day system.
However, Dobson DaVanzo also notes that much of the impact of the proposed rule is difficult to predict because of “unclear or missing information.” For example, the HHGM does not explain what are the assumed behavioral response that would change what looks like a 15 percent reduction into a smaller 4.3 percent reduction. In addition, the HHGM was modeled using 2016 data, which is not yet publicly available.
Ominously, the Dobson DaVanzo analysis concludes that:
The HHGM represents a major shift from the current payment system;
The HHGM has the potential to significantly redistribute payments and revenues;
By setting costs equal to payments, the HHGM essentially rebases the system to a lower level;
Paired with the lack of budget neutrality, the HHGM would stress the system in compounding ways and potentially create unintended consequences;
Historically, changes of this magnitude have placed agencies in jeopardy, with negative impacts on beneficiaries, providers, and the post-acute care landscape
NAHC urges CMS to withdraw the HHGM policy and instead work with stakeholders to develop a fully budget-neutral policy that does not limit access to beneficiaries or diminish provider resources.
This issue is NAHC’s top priority and will remain so until the policy is improved. Please stay tuned for further analysis and news about NAHC advocacy on behalf of our members and the millions of aged and disabled Americans they serve.
However, to defeat this payment rule before it brings havoc to the industry, we need home health leaders, employees and patients to make their voices heard by policymakers in Washington, D.C. Without your support and advocacy, this rule cannot be stopped. Please go to the NAHC Legislative Action Center and ask Congress to tell CMS to withdraw the payment rule.