AHA Critiques Medicare Reimbursement Changes for Home Health

The AHA urged CMS to address challenges related to proposed Medicare reimbursement updates for home health facilities

AHA Critiques Medicare Reimbursement Changes for Home Health

The American Hospital Association (AHA) is urging CMS to delay outlier provisions and streamline certain medical billing procedures proposed in a recent document aimed at home health facilities.

In June, CMS released a proposed rule that would reduce Medicare reimbursements to home health providers by one percent, or $180 million. The rule contained several changes to the payment program to further reduce healthcare spending related to home health services, including a new methodology for calculating high outlier payments, separate reimbursements for certain negative pressure wound therapy devices, and adaptations to the home health quality reporting program.

As part of the open comment period on the proposal, the AHA expressed concerns that some of the proposed changes to home health Medicare reimbursement programs would create confusion for providers, increase administrative burdens, and limit access to care.

The industry group called on CMS to postpone updating the outlier payment methodology until the federal agency addressed these potential challenges.

The proposed rule would require home health providers to report services for possible outlier payments in 15-minute intervals, rather than total cost per visit, starting in 2017. In response to recent studies that found some outlier payments were not being used to treat severely or permanently disabled beneficiaries, CMS designed the provision to better align outlier payments with the length of time and cost per visit.

“[W]e are concerned that CMS proposes to give equal weight to each 15-minute increment of care,” the AHA wrote. “In doing so, short visits would receive substantially less payment for fixed costs that do not vary based on the length of the visit, such as travel time.”

Costs incurred outside of the patient encounter would not be captured through the new methodology, argued the AHA. Providers would not be reimbursed for pre-visit planning, chart review, care coordination, and phone calls with patients and related providers.

The AHA advised CMS to “give greater weight to the initial 15-minute units to ensure such fixed costs are accurately reimbursed.” The letteralso recommended that CMS reimburse partial 15-minute units on a prorated basis to ensure payments are accurate and avoid adding reporting burdens.

With the proposed outlier methodology, the AHA stated that some providers may be discouraged from providing any partial 15-minute encounters. Since home health providers generally serve a sicker patient population than other providers, CMS should consider how the methodology could reduce access to care for beneficiaries that largely require multiple, short visits per day.

Additionally, the AHA stated that the federal agency’s proposal to create a separate payment to home health providers for applicable disposable negative pressure wound therapy devices starting in 2017 is a positive step, but the medical billing approach is “overly complicated and will result in provider confusion with regard to aligning the correct element of the service with the correct bill type.”

Under the proposed rule, providers would submit the device and other related service on a 34x bill in some situations, while other cases would call for the use of a 32x bill.

“To avoid this problem, we encourage CMS to, before proceeding, streamline its guidelines to eliminate avoidable paperwork and confusion, which could have a negative impact on patient access to this important therapy,” the AHA wrote.

The industry group also asked CMS to clarify what types of clinicians are eligible to provide negative pressure wound therapy, since the proposal only specifies that physicians and non-physician practitioners are eligible. The proposed rule mentions a handful of eligible healthcare professionals, but the AHA noted that other levels of nurses and home health providers could deliver the therapy.

The AHA also challenged some of the modifications to the home health quality reporting program. While the industry group supported the removal of 28 quality measures, it stated that more work needs to be done to streamline the program and align measures across federally-funded quality improvement programs.

“As a starting point, we believe CMS must ensure that the quality measurement requirements for all providers share a common set of goals and objectives,” said  the AHA. “For this reason, we continue to urge CMS to use the recommendations of the National Academy of Medicine’s (NAM) 2015 Vital Signs report to identify the highest priority measures for development and implementation in the HH QRP [Home health Quality Reporting Program] and other CMS quality measurement programs.”

In addition, the AHA urged CMS to reevaluate the three quality measures it proposes to add to the home health quality reporting program. The three claims-based measures are Medicare spending per beneficiary, discharge to community, and preventable readmissions.

To improve the new quality measures, the AHA advised CMS to account for sociodemographic factors. The factors can impact provider performance on outcome measures and reduce provider scores in quality reporting programs, therefore, the industry group urged CMS to adjust measures.

The group also called on CMS to only include one discharge to community measure in the home health quality reporting program. Under the proposed rule, home health providers would be required to report on two different discharge to community measures.

To avoid provider and stakeholder confusion, the AHA advised CMS to eliminate one of the quality measures or, at least, only publicly report the results of only one of the measures.

The AHA also expressed concerns over the home health value-based purchasing program, which subjects home health providers to a upward or downward payment adjustment of three to eight percent depending on quality and cost performance.

“[W]e continue to be concerned by the level of payment at risk under the program,” the letter stated. “The AHA believes placing up to eight percent of HH agency payment at risk for performance is too much, too fast, especially in light of the significant Medicare payment reductions HH agencies have endured in recent years. The AHA is especially troubled by the potential impact of the large payment adjustments on hospital-based HH agencies, whose average Medicare margins were negative 22.4 percent in 2014.”

CMS has not released a final rule on the home health reimbursement program, but the comment period closed on August 26.

Dig Deeper:

Key Ways to Improve Claims Management and Reimbursement in the Healthcare Revenue Cycle

Value-Based Care Models Still Pose Opportunities, Challenges

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