Medicare dis-incentivizes home health care in ACA’s name (US)

When it comes to home health care, the C in CMS (Centers for Medicare and Medicaid Services) should perhaps stand for ‘contradiction’. According to recent reports appearing in the pre-holiday ‘dead zone’ of late last week, CMS has decreed that it must save, as part of a four-year plan under ACA, $58 million (0.3 percent) in fiscal 2015 (starting 1 Oct) from home health agencies which were formerly touted as a great way to save money. To put this in perspective: in 2013, Medicare paid about 12,000 home health agencies $18 billion to provide services to 3.5 million patients. In the US, Medicare has always had more restrictive rules for home and community-based services (HCBS); state-administered (but Federally subsidized) means-tested Medicaid still pays for the vast majority of long-term care (well over 60 percent, according to another Federal agency, Housing and Urban Development [HUD]), which strikes many observers as one pocket to another. So where are the contradictions?

  • Conundrum #1: CMS has emphasized post-discharge, post-acute care as part of reducing acute care costs, exemplified in the penalty for 30-day same-cause readmissions. Nursing home expenditure is at least three times more costly than in-home LTC (a conservative estimate used by HUD).
    • But CMS plans to cut Medicare home health funding in total so fewer people may receive it at all or less of it even if needed. What will be their alternative, and the effect on outcomes?
  • Conundrum #2: CMS requires, under ACA, a doctor’s in-person certification via a visit (encounter) for a patient’s home care. It then added on a ‘detailed narrative’ requirement in addition, not specifying what would be detailed enough according to the home care industry.
  • Yet CMS estimates that it made about $2 billion in inappropriate Medicare payments to home health agencies between 2011 and 2012 based on an April HHS Inspector General’s report that basic (visit) documentation was either non-existent or ‘vague’. Retroactive claim denials have soared according to the National Association of Home Care and Hospice (NAHC) which strikes this Editor as a ‘clawback’.
    • But now CMS is proposing to lift the detailed narrative requirement, per last week’s draft rule (preliminary to a final ruling). Yet where is enforcement, clarification and perhaps a better way of accomplishing the initial encounter standard to qualify, which was the subject of the April report–a rational way to cut fraud and abuse?

Sources: California Healthline, Modern Healthcare (free registration may be required), The Hill, HUD publication ‘Measuring the Costs and Savings of Aging in Place’ Fall 2013

Now how does this affect digital health, particularly telehealth and telemedicine/virtual visits? According to FierceHealthIT, CMS wants to add telehealth for annual wellness visits, psychotherapy, psychoanalysis and “prolonged evaluation and management services” to Category 1 services in the Medicare Physician Fee Schedule (PFS) for FY 2015. Good news but…will it increase, decrease or have no effect on cost? While CMS expects increased utilization, especially in rural areas, they don’t expect increased expenditure. We know that telehealth and telemedicine can reduce costs based on current studies, but if you increase utilization, total cost can go up, and that funding has to come from….somewhere. And the qualification standards? Not mentioned.

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