Untangling The History, Causes Behind The Precipitous Home Health Aide Utilization Drop
Home Health Care News | By Patrick Filbin
In the last home health proposed rule from the Centers for Medicare & Medicaid Services (CMS), the federal agency in charge of reimbursement rates sent out a request for information on home health aide utilization.
Specifically, the agency wondered why Medicare-covered home health aide visits and utilization had fallen off a cliff over the last few decades.
According to the Center for Medicare Advocacy, home health aide visits declined by 90% from 1998 to 2019.
Many people who work in and around home health were surprised by the CMS request, believing the agency itself was one of the main culprits. “When we saw that go into the proposed rule, we laughed out loud,” National Association for Home Care & Hospice (NAHC) President Bill Dombi told Home Health Care News.
Home health aide history
In 1987, Dombi took part in a class action lawsuit on behalf of NAHC and home care patients against the Medicare program. There were a whole host of issues within the lawsuit, Dombi recalled, but one of them had to do with the accessibility to home health aide services. The lawsuit was successful, and created a standard that ultimately found itself into the statute itself.
“Congress modified the law to pretty much codify the outcome of the lawsuit,” Dombi said. “It set a standard that an individual could qualify for 28 to 35 hours a week of home health aide services within the definition of part-time or intermittent care — which had been the part of the statute that I litigated around.”
At that point in time, home health aides services were the primary discipline of care that people were receiving for services — more than even nursing care.
Then, two things happened. In the Balanced Budget Act of 1997, Congress eliminated blood draws from the list of benefits that could qualify a person for the home health aide benefit. That dilution of the benefit was compounded by a major change in the reimbursement model for home health services — the Interim Payment System.
This system aimed to change the way Medicare paid for home health services. Instead of paying providers based on the costs they incurred, Medicare transitioned to a prospective payment system.
Under the IPS, Medicare made fixed payments to home health agencies based on the patient’s condition and the services needed rather than reimbursing them for the actual costs of care. This change was intended to control costs and improve efficiency in the Medicare home health benefit.
“It devastated home health agencies and home health services,” Dombi said. “Forty percent of home health agencies shut down within an 18-month period of time. The volume of patients served in the Medicare program went from 3.5 million to 2.1 million in that same 18-month period of time.”
Prior to the IPS, agencies received more reimbursement for the more services they provided. With IPS, agencies had a cap on what would be payable.
“That really chilled the providers’ willingness to take on patients that had high levels of home health aide services,” Dombi said. “Because it raised the level of payment, but you then hit against the cap. And when you hit the cap, you didn’t get the payment.”
When the Prospective Payment System (PPS) system was implemented in 2000, home health aide services were already dwindling.
The episode of payment for home health services is around $2,000 for 30 days worth of care. Adding 30 days of home health aide services — at an average of about four hours a day — would add between $3,000 to $4,000 to the cost of care, Dombi estimated.
“You can’t expect a home health agency to get paid $2,000 to deliver $5,000 to $6,000 worth of care,” he said. “As an existing care provider, they would last a nanosecond if they started doing that. So at the moment, it’s all reimbursement related.”
That brings the timeline to 2023 when CMS essentially asked, “Why are home health aide services so difficult to get for patients?”…
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