MedPAC Again Pushes for Home Health Payment Cuts, Highlights Higher Employment Levels
Home Health Care News | By Robert Holly
Staffing shortages remain a challenge in home health care. While that’s true, the overall employment pool in home health care is actually larger now than it was before the COVID-19 pandemic.
That’s according to the Medicare Payment Advisory Commission (MedPAC), which issued its March 2024 report to Congress on Friday. In addition to including information on home health employment levels, MedPAC’s report once again urged Congress to slash fee-for-service (FFS) Medicare home health payments.
MedPAC has repeatedly argued that home health agency (HHA) margins are too high and that providers have generally been overpaid.
“The Commission’s review indicates that FFS Medicare’s payments for home health care are substantially in excess of costs,” the March report states. “Home health care can be a high-value benefit when it is appropriately and efficiently delivered, but these excess payments diminish that value.”
Employment outlook
Home health agencies across the U.S. have struggled with staffing shortages across multiple roles.
The growing demand for in-home care services has partly contributed to the problem. Many reports have also highlighted how home health workers have left their posts for other professions – or retired from the health care workforce altogether.
Yet according to Department of Commerce data on the broader medical home care sector, total employment numbers were about 5% higher in July 2023 than compared to before the pandemic. It’s important to note, however, that the medical home care sector also includes hospice, private-duty nursing, pediatric home care agencies and more.
“While these data measure employment for a broader category of home care services than Medicare HHAs, the latter comprise a significant share of this sector,” MedPAC wrote in its report.
MedPAC notes that reports on home health staffing shortages may only “reflect local labor market conditions” or “other factors not observed in national labor force measures.”
MedPAC’s payment recommendation
When it comes to cutting home health payment, MedPAC is urging Congress to slash 2025 Medicare base payment rates by 7%.
This recommendation comes despite MedPAC recognizing how the cost of delivering home health services has increased.
“In 2022, there was an increase of 4% in the cost per 30-day period for freestanding HHAs, a reversal of the trend for 2021, when we observed cost per period decline by 2.9%,” MedPAC wrote in its report.
Broadly, MedPAC believes home health agencies can withstand payment cuts because their margins remain high. Home health industry stakeholders have often disputed that claim, describing it as a faulty and flawed calculation…
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Hospices Must Report Their Medical Director to Medicare Now
The Health Group
The 2024 Home Health Prospective Payment System (“HH PPS”) Rate Update final rule included a provision clarifying that the definition of a Managing Employee in 42 CFR §424.502 includes the administrator and medical director of a hospice. This change was incorporated into CMS Pub 100-08 Medicare Program Integrity effective January 1, 2024. Most hospices have always reported the administrator; however, many have not previously reported their medical director as part of their Medicare Enrollment Record.
Pursuant to CFR 42 §418.102, the hospice must designate a physician to serve as medical director. This individual can be employed by the hospice or under contract with the hospice. Accordingly, all hospices should include a medical director in their enrollment record.
With the change in regulations, hospices have been updating their Medicare Enrollment Record to include the medical director when the Medicare Enrollment Record needed to be updated for another reason. Most hospices have updated this information when initially enrolling, revalidating enrollment, or at the time of changing other information currently on file.
Recently, the Centers for Medicare & Medicaid Services (“CMS”), Center for Program Integrity, issued a letter to hospice providers that included the following:
“Every Medicare provider and supplier must report all current managing employees. If you have not reported a medical director or administrator to CMS as a managing employee, you must do so now.
If any updates are needed, submit an 855A enrollment application online via http://pecos.cms.hhs.gov or a paper CMS-855-A enrollment application via mail to your jurisdiction’s Medicare Administrative Contractor (MAC). You will need to update the enrollment record of each individual Hospice enrollment.”
Furthermore, the letter includes, “A failure to comply with this requirement may result in the revocation or deactivation of your Medicare enrollment in accordance with 42 CFR §424.535 and §424.540.”
The letter did not provide a specific date by which the update must be made; however, based on the letter, we recommend that all hospices address this reporting need at their earliest opportunity. The CMS-855-A, as revised, includes information that may not have been previously reported. Other modifications to the Medicare Enrollment Record may also be necessary. |
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MedPAC Report Slammed by Insurers and Docs over Medicare Advantage and Physician Reimbursement
Fierce Healthcare | By Noah Tong
Health plans and providers alike are disgruntled with a new report (PDF) to Congress released by the Medicare Payment Advisory Commission (MedPAC) Friday.
The American Medical Association (AMA) and the Medical Group Management Association (MGMA) said the recommendations it gives for physician payments are flawed, while America's Health Insurance Plans (AHIP) defended Medicare Advantage (MA).
"On the heels of Congress allowing a 1.69% cut to Medicare physician reimbursement to stand for the remainder of 2024, today's MedPAC recommendation to provide a 50% inflationary update for physician servics in 2025 is woefully inadequate," said Anders Gilberg, senior vice president of government affairs for the MGMA, in a statement. "I am mystified why MedPAC even bothers to make an annual recommendation while it ignores the signficant Medicare cuts to physicians in 2024 and recent years."
AMA President Jesse Ehrenfeld, M.D., praised the commission's opinion to tie physician payments to the Medicare Economic Index but said its current proposal is lacking.
"MedPAC’s decision recognizes that physician pay is lagging far behind the cost of practicing medicine," said Ehrenfeld in a statement. "Yet, an update tied to 50% of MEI—as MedPAC recommended—will cause physician payment to fall even further behind increases in the cost of providing care."
The AMA has wanted Congress to pass legislation requires the MEI to better reflect inflation, a contrast from the current environment where rates have continued to fall and providers are dealing with rising costs across the board, particularly after the COVID-19 pandemic.
MedPAC's recommendation calls for updating the base payment rate "by the amount specified in current law plus 50% of the projected increase in the MEI." It also wants to establish safety-net add-on payments under the physician fee schedule for services delivered to low-income Medicare members…
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House Committee Hearing ‘Setting the Stage’ for Home Care Support, Policy Expert Says
McKnight’s Home Care | By Adam Healy
A House Ways and Means Committee hearing last week reinforced congressional support for home care, stakeholders said. Home-based kidney care and telehealth were two big topics of discussion.
“Seemingly, the hearing was setting the stage for consideration of a number of pieces of legislation on these topics,” Mollie Gurian, vice president of home based and HCBS policy at LeadingAge, said during a policy update call on Wednesday. “A lot of the committee members on both sides of the aisle showed up and almost all of them were touting a bill that they were working on in one of these spaces.”
Such bills ranged from narrow regulatory fixes to broader policy change, she said, including legislation that could make permanent some waiver flexibilities implemented during the COVID-19 pandemic. Notably, telehealth and hospital-at-home programs received waiver extensions as a result of the pandemic.
“It was a very interesting hearing and there was a lot of support for expanded care at home, generally, which we found to be very positive,” she said.
Experts supporting home dialysis, hospital-at-home, telehealth and more testified last Tuesday. Among those testifying was Ateev Mehrotra, MD, a professor of health policy and medicine at Harvard Medical School, who recommended policy changes that could make virtual care services more accessible to Medicare beneficiaries.
“I believe it is critical to give Medicare as much flexibility as possible in adapting telehealth policy,” Mehrotra said in his testimony. “Telehealth use is rapidly changing, and policy must adapt accordingly.”
And Nathan Starr, medical director of home services and tele-hospitalist programs at Intermountain Health, advocated for the expansion of home-based services such as hospital-at-home during the Tuesday hearing.
“I have personally seen patient, family, community, and caregiver benefits of care at home,” Starr said. “Our positive experience has reinforced our commitment to increasing access to care at home. That is also why we are so pleased to be here today to advocate for the federal health policy changes needed to enable and support current and future hospital-at-home and patient needs.” |
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