MedPAC Draws Fire with Draft Recommendations for Massive Home Health Cut, Hospice Rate Freeze

McKnight’s Home Care | By Adam Healy
 
The Medicare Payment Advisory Commission offered initial recommendations for Congress to cut home health reimbursement by 7% and pause hospice payment updates in 2025. 
 
“The 2022 [home health] margins remain above 20%, higher than the long-run average of 16.8% since 2001,” Evan Christman, senior analyst at MedPAC, said during last Friday’s public meeting, according to a transcript. “Overall, these margins indicate that Medicare fee-for-service continues to pay well in excess of cost.”
 
Part of the reason home health agencies reportedly saw margins of 22.2%, on average, according to Christman, is a decline in the number of visits per 30-day period. Since the implementation of the Patient-Driven Groupings Model in 2020, these visits have declined more than 15%; between 2021 and 2022, visits per 30 days declined 3.5%. 
Home health advocates were quick to dispute MedPAC’s claims.
 
“There are many shortfalls in MedPAC’s home health margins report — starting with the fact that MedPAC’s analysis only captures a declining fraction of the Medicare home health population, ignoring that overall margins are low,” Joanne Cunningham, chief executive officer of the Partnership for Quality Home Healthcare, said in a statement. “Additionally, relying on incomplete, poor-quality data and an opaque methodology runs the risk of dangerously misleading policymakers who rely on MedPAC to inform their decisions.”
 
The Partnership and National Association for Home Care & Hospice cited poor methodology and data in the recent home health final rule, which contained a Medicare cut related to PDGM. 
 
MedPAC: No hospice payment update
 
MedPAC also recommended that Congress eliminate any payment updates for hospice providers in 2025. The hospice program, according to MedPAC principal policy analyst Kim Neuman, shows signs that its current payment rates are sufficient to sustain quality and growth.
“Indicators of payment adequacy are favorable,” Neuman said. “The supply of providers continues to grow. The share of decedents using hospice, the number of hospice users and total days of care increased. Length of stay also increased. In-person visits per week increased slightly, and marginal profit was 17%.”…

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CMS is Already Hurting Home Care and Now MedPAC Wants to Make it Worse

The Rowan Report | By Kristin Rowan (Used with permission)

Last week, MedPAC met for their December meeting to discuss "Assessing payment adequacy and updating payments." Hospice services and Home health care services were each presented separately to Congress and commissioners are set to review the key indicators and discuss updates to Medicare payment rates for 2024. 

The findings presented to Congress gave me whiplash.

Hospice Services

  • There is 'mixed evidence' on whether hospice reduces Medicare expenditures, but is has important benefits for beneficiaries  
  • 2021 saw a 6% increase in hospices, mostly in for-profit agencies
  • Hospice use rates are down overall, but MedPAC blames the effects of the pandemic on death rates and patterns of care
  • Hospice use continues to shift from SNFs to in-home care
  • In 2020, 18.6% of hospices exceeded the payment cap
  • MedPAC recommends the cap be wage adjusted and reduced by 20%

See the full Hospice Services presentation to Congress here.

Opinion

Of the 18.6% of hospices that exceeded the payment cap in 2020, 17.2% of those were also in the highest bracket of hospice providers with stays longer thank 180 days. The payment cap is not enough to cover patients who need hospice care for longer time periods, even though the requirement for hospice care is expected death within 6 months. If hospice is intended to care for a patient for 180 days, shouldn't the payment cap be equal to 180 days of care? If a hospice provider is caring for a patient for longer, shouldn't they get paid more? …

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As White House Focuses on Home-Based Care Funding, Polis Highlights what Colorado has Done

CPR News | By Caitlyn Kim

…  Attending virtually, Polis is expected to highlight how Colorado used its American Rescue Plan funding to raise base wages for thousands of home health care workers. In 2022, the wage went up to $15 per hour from $12.56.

“With historic federal funding thanks to the work of the Biden Administration and the majority of our federal delegation, Colorado has increased wages to help fill open care positions and help train for the direct care workforce improving home-care services for people with disabilities,” said Shelby Wieman, a Polis spokesperson.

She added on helping people with disabilities and aging Coloradans get needed  long-term care service has been a priority for state leaders.

“It means more Americans getting quality care in their home and community. It means care workers getting the respect and pay they deserve, and it means more family caregivers giving relief or the chance to return to work if they desire,” Sperling said. “We're excited to have Governor Polis's participation in the White House convening because he has been one of the leaders in using these funds to raise wages.”

Other speakers will be Health and Human Services Secretary Xavier Becerra, Pennsylvania Gov. Josh Shapiro and Maine Gov. Janet Mills. 

The money has also been used for a training program for home healthcare workers and to provide more specialized training, as well as for technical improvements to upgrade or start electronic healthcare record systems.

In total, Colorado received about $510 million more in funding for home and community-based services through the ARP, with $37 billion used across all 50 states for home-based and community-based health care.

However, Sperling said, despite the large infusion of funds, it’s still just a downpayment. But one that is working, he said. He hopes the meeting will also spur some action on a longer-term solution from the government to address “the need for care and care workers across our country.”

 

National Health Expenditures 2022 Highlights

CMS.gov

U.S. health care spending grew 4.1% to reach $4.5 trillion in 2022, faster than the increase of 3.2% in 2021, but much slower than the rate of 10.6% in 2020. The growth in 2022 reflected strong growth in Medicaid and private health insurance spending that was somewhat offset by continued declines in supplemental funding by the federal government associated with the COVID-19 pandemic. 

In 2022, the insured share of the population reached 92% (a historic high). Private health insurance enrollment increased by 2.9 million individuals and Medicaid enrollment increased by 6.1 million individuals. In 2022, 26.6 million individuals were uninsured, down from 28.5 million in 2021 (a difference of 1.9 million individuals).

Gross domestic product (GDP) continued to increase at strong rates of growth in both 2021 and 2022, increasing 10.7% and 9.1%, respectively. With a lower rate of health care spending growth of 4.1% in 2022, the share of GDP devoted to health care fell to 17.3% in 2022, lower than both the 18.2% share in 2021 and the highest share in the history of the National Health Expenditure Accounts of 19.5% in 2020. During 2016-19 the average share was 17.5%.

Federal COVID-19 supplemental funding to the health sector through the Provider Relief Fund and the Paycheck Protection Program was highest during the initial year of the pandemic and continued to affect health care expenditures in 2021 and 2022, although at reduced levels. Funding to the health sector through these programs was $174.6 billion in 2020, but just $2.0 billion in 2022.

Health Spending by Type of Service or Product.

  • Home Health Care (3% share):  Spending for services provided by freestanding home health care agencies increased 6.0% in 2022 to $132.9 billion, accelerating from growth of 0.3% in 2021. Private health insurance, out-of-pocket, and Medicaid home health spending contributed to the faster growth, while Medicare spending growth for home health care services slowed…

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Time to Consider 2023 CAP Year Reporting and CAP Liability Monitoring

The Health Group

The hospice self-reporting of the CAP liability computation (“CAP Report”) for the 2023 CAP Year ended September 30, 2023, must be filed with the Medicare Administrative Contractor (“MAC”) on or before February 29, 2024.  If, based on the filing, the hospice has a CAP liability, the liability payment must be submitted to the MAC or a request for Extended Repayment Schedule (“ERS”) needs to be submitted at that time.  Our recommendations are as follows:

  • Make certain you can access PS&R data to be able to complete the self-filing.
  • Secure PS&R data as soon as possible after January 1, 2024, to minimize any CAP liability that needs to be paid at the time of filing.  Remember, the submission is not required until February 29, 2024.  Knowing the liability early also provides the hospice time to determine how any liability will be liquidated.
  • If you have a CAP liability, establish a mechanism for tracking the CAP liability as it continues to increase as time passes.
  • Make an estimate of the ultimate CAP liability (the amount to which the liability is expected to increase over the next several years) or determine if an outside consultant is needed to make that estimate or assist in making that estimate.
  • If you will be requesting an Extended Repayment Schedule to liquidate the liability, determine if the request will be for a period of less than one year or more than one year.  If the ERS is for a period of one year or more, significant financial information will need to be accumulated to support the ERS request.  Prepare to secure the data required for the submission.

It is important to recognize that if the report reflects a CAP liability, the actual liability is a higher amount because the reporting is based on net payments (net of sequestration); however, this is not consistent with the calculation that will be eventually made by the MAC.

 
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