Dombi: In Advance of Proposed Rule, Agencies Fighting ‘Medicare Home Health War’

McKnight’s Home Care | By C. MAX BACHMANN
 
National Association for Home Care & Hospice President William Dombi issued a frank assessment of the state of home healthcare Thursday in advance of the release of the Centers for Medicare and Medicaid Services’ proposed payment rule for 2024.
 
“There is intense congressional action going on,” he said Thursday in a webinar hosted by the Polsinelli law firm. “Regulatory response is in play. Even litigation is on the agenda as well. This is the equivalent of a Medicare home health war at this point in time.”
NAHC and other associations are anticipating a rate cut in the proposed rule. 
 
“We’re days away from seeing the proposed payment rule for 2024,” he said. “There’s a lot we’re watching for there with potential for a proposed rate cut that ranges from low single digits to mid teens [that would] really be putting the delivery of care in jeopardy.”

The permanent behavioral adjustment of -3.925%, which went into effect this year, has contributed to staffing shortages, which have resulted in a drop in hospital-to-home health conversion rates, he told McKnight’s Home Care Daily Pulse earlier. A temporary rate adjustment — so-called clawback payments related to the Patient-Driven Groupings Model — also could surface in the proposed rule. It could total billions of dollars.
 
Medicaid Access Rules
 
Home care already is dealing with the aftermath of two other significant rules from CMS proposed in April. 
 
Ensuring Access to Medicaid Services (Access NPRM) and Managed Care Access, Finance, and Quality (Managed Care NPRM) would require home- and community-based services (HCBS) to publish average hourly rates paid to direct care workers and strengthen person-centered service planning, among other provisions. Perhaps the most controversial requirement is that 80% of Medicaid payments for personal care, homemaker and home health aide services be spent on compensation for direct care workers.
 
“Essentially, the states would report data each year on the proportion of the total amount of Medicaid expenditures they had for these three services and the proportion of that that was provided to the workers,” NAHC Director of Medicaid HCBS Damon Terzaghi explained Thursday. 
 
Providers have voiced their displeasure with this measure. Last week, Addus HomeCare CEO Dirk Allison noted that the rules would “disproportionately” affect caregivers in states that pay them less and put “a vast majority of the small mom-and-pops” out of business. 
 
Terzaghi expressed frustration that the 80/20 measure is distracting from the other positive provisions within the text.
 
“We’re partially frustrated about this 80/20 proposal not just because of the challenging policy and, we think, the unsupported mandate they’re putting on providers, but also because it’s sucking the oxygen out of the room for so many potentially positive changes that were included in this regulation,” he said. 
 
Angelo Spinola, Polsinelli’s home health, home care and hospice chair, pointed out to providers that the rules are not yet final and that there is an open comment period until July 3. He also noted that associations and providers are working on issuing statements.
 
“This is one of those areas where a loud and uniform voice is going to make a significant difference,” he said. “This isn’t going to be a one-and-done type of situation. The rule would not actually go into effect until four years after the final publication.”…

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Home Healthcare Spending to Grow by 7.7% from 2025 to 2031, New Study Finds

McKnight’s Home Care | By C. MAX BACHMANN
 
Home healthcare spending will surpass $250 billion by 2031, according to new estimates released in a study published in Health Affairs Wednesday from the Office of the Actuary (OACT) at the Centers for Medicare & Medicaid Services (CMS).
 
Projections also indicate that spending will hit $141.5 billion this year and $149.3 billion in 2024. From 2025 to 2031, CMS predicts that home health spending will increase at a rate of 7.7%. 
 
As home health spending increases, so too will general healthcare spending, which CMS projects will reach $4.6 trillion in 2023 and balloon to nearly $7.2 trillion by 2031. 
 
Healthcare spending is growing faster than other sectors, Sean Keehan, an economist in the OACT at CMS and the Health Affairs study’s first author noted.
 
“Recent legislation is anticipated to affect trends in health insurance enrollment and healthcare spending over the next decade,” he said in a statement. “Altogether, and consistent with its past trend, health spending for the next ten years is expected to grow more rapidly, on average, than the overall economy.”
 
CMS projects Medicare spending will rise from 4.8% in 2022 to 8% in 2023 with expenditures expected to exceed $1 trillion. By 2031, Medicare spending is predicted to exceed $1.8 trillion, expanding at a rate of 7.8% per year, the study said.  The study also estimates that Medicare enrollment will reach 76.4 million by 2031, with overspending per enrollee hitting $24,000 that same year.
 
Medicaid spending, however, is slowing down after three years of over 9% growth during the COVID-19 pandemic. CMS projects that Medicaid spending will increase 3.7% in 2023 to $834.4 billion but then decrease by 2.1% to $816.7 billion in 2024.
 
CMS predicts that Medicaid enrollment will also decrease. After a historically high figure of 90.4 million enrollees in 2022, CMS expects enrollment to decline to 81.6 million in 2024.

Home-Based Care Providers In ‘Early Innings’ Of Value-Based Care, But The Game Is Moving Quickly

Home Health Care News | By Patrick Filbin | June 14, 2023
 
Home-based care dealmaking experts believe that value-based care will be an overarching theme in M&A over the course of the next few years.
 
They also believe that the shift to value-based care is still in the very early stages.
 
“I think it’s pretty clear that that’s where we have to go and that’s where payers tend to go,” Jed Chaney, principal with the health care group at the firm CLA, said on a panel at the Home Care Innovation + Investment Conference in Chicago Tuesday. “I’m thinking we’re in the third, maybe fourth inning of this, and it’s probably going to move very, very quickly.”
 
Buyers are becoming less interested in focusing growth on a single service line. Instead, they’re interested in many service lines, and building out fuller continuums.
 
“Consolidation across a single product line is not doing anything,” Dexter Braff, president of the M&A advisory firm The Braff Group, said during the panel. “Especially in light of the fact that most consolidators’ EBITDA margins are smaller than the companies that they acquire, so there are no efficiencies. The opportunity is in combining services under a capitated rate, and that’s where I think the M&A strategy is shifting in order to be able to accomplish that objective.”
 
Smaller providers are struggling to shift to value-based care, as they often don’t have the scale to make a meaningful impact on health plans’ membership or spend.
 
In order to take on a digestible amount of risk, small- and medium-sized providers should look to work with regional payers instead of national ones, Braff said.
 
“If you’re in Pittsburgh, everything is UPMC or Blue Cross Blue Shield,” Braff said. “If I could get those assembled services and go capitated with them, that’s great. I can’t do it in California, but I could be very successful on a regional basis and even on a local basis. The definition of where you have to be from a diverse care situation is dependent on where that reimbursement is coming from and what kind of concentration there is.”
 
Data continues to be a pillar of success for home care providers in value-based arrangements. It’s not as simple as collecting data, though.
 
It’s also about using it in a way that they can showcase to those health plans, Chaney said.
 
“I think the concept of having the data to show what kind of care you’re providing is so important,” Chaney said. “We see a lot of wraparound services around home infusion, palliative and personal care. I think one area that keeps on rising and rising is behavioral health care. As we navigate this new environment, it’s clear that behavioral health is tied to the outcome of the patient and I think that’s becoming more and more of a critical service.”
 
To start, Braff said providers need to be open-minded on their value-based care journeys.
 
They need to be willing to start small, but also to make mistakes.
 
“I would start organically on a small basis,” he said. “I would look for an opportunity to get a partner and get involved in some sort of at-risk model. But one where I’m not betting the farm, one where I can learn. It doesn’t matter if I lose money, because what I’m really going after is the work and figuring out how it’s done. If you start getting involved in some sort of full-risk model with a small piece of your business, you could figure out how it’s done, get better at it and then take more of a lead position down the line. I love companies that have 10% to 20% of their revenues at-risk. And buyers do too.”

93 Percent of Seniors Plan to Age in Place, Will Use More Health Tech: Study

McKnight’s Home Care | By Christine Birkner
 
The technology boom in senior living is here to stay, and one new survey is measuring its impact in seniors’ lives as they age in place. Ninety-three percent of US adults plan to age in place, which increases the need for health-related technologies, according to a study from U.S. News & World Report’s 360 Reviews.
 
U.S. News surveyed 2,000 US adults 55 or older about aging in place, which means “to live in one’s own home and community safely, independently, and comfortably, regardless of age, income, or ability level,” according to the Centers for Disease Control and Prevention. Nearly half (49%) of respondents who use assistive, health-related technology say general aging is their primary reason for adopting it, with additional reasons including impairments in mobility, hearing, vision and cognition, the research said. 
 
The top six devices that have made it easier to age in place are medical or health-related apps, service-related apps including food and grocery delivery, wearable health trackers, smart home technologies, hearing assistance-related devices and medical alert devices, according to the survey.
 
Some 53% of US adults aged 55 and older use some type of assistive or health-related technology, according to the survey, with two of the most widely used technologies including medical or health-related mobile apps (25%) and wearable medical or health-related trackers (17%). Eighty-eight percent of survey respondents said assistive technologies have improved their overall quality of life.
 
Of the 47% of survey respondents who said they don’t use assistive or health-related technologies, 70% didn’t feel that they needed them yet, while 16% said they couldn’t afford the technologies and 14% rejected the technologies because they didn’t want to lose their independence.
 
Asked what features mattered most to them, survey respondents said they wanted products that were easy to use and set up, accessible via mobile app, wireless, voice-activated and have discreet product design.