Former CMS Administrator Predicts Dire Near-Term Outlook for Home Health Industry

The Director of the American Centers for Medicare and Medicaid Services (CMS), Seema Verma, did not paint a rosy view of the home health industry this week in Chicago.

In fact, hardly any of what she said sparked optimism among the operators in the crowd.

On the economy, she said she believes a recession is about to happen, although she admits it’s not her job to predict such things. Regarding the legislation passed in Washington, D.C., this year — perhaps even favorable home care legislation — she said she “didn’t expect that to happen.” And when it came to the Core Home Health and proposed rule last week, she told providers to expect refutation to be an uphill battle.

I offered a view on how to define the rule, noting the fact that as of now, operators can direct their ire at the system, but not necessarily the CMS as a whole or any of the individuals that currently make up the management.

“I think in this case – in this case and in every case – they are looking at it short-sightedly, right?” Verma said at the Home Care Innovation and Investing Conference at Lincoln Healthcare on Wednesday. “That means they look at cost reports or they look at what the data says.”

CMS released its proposed home health payment rule for fiscal year 2023 late Friday, which included a 4.2% decrease in payment rates, or $810 million less than the 2022 rates. In response, the National Association for Home Care and Hospice (NAHC) said ): “The stability of home health care is at risk.”

Verma said the agency knew there was a coding density factor with the patient-driven aggregation model (PDGM), which ended up lowering rates.

“They actually said, ‘Okay, there’s an increase that we’d recommend, but it’s offset by the new implementation of the model. “The idea was that there would be behaviors that would encourage service providers to increase the intensity of coding.” “Whether that’s true or not, I don’t know.”

Verma also acknowledged that data has become difficult to assess since the emergence of the COVID-19 virus, another sign that CMS’s proposed rules methodology may be inherently flawed.

However, the obvious caveat is that it is still only a proposed rule and there is an opportunity to influence it during the suspension period.

But this will not be easy. Just as the CMS came up with the proposed rule using strictly data, they will only be affected by the data, according to Verma.

“It has to be data driven,” she said. “I think if providers were able to show the evidence – ‘this is the data, which is why we don’t agree with your analysis. This is our analysis. — and this is data driven, they have a stronger chance than just saying, ‘We disagree with this from a policy perspective’. This will not work. “

Perhaps most frustrating was Verma’s additional offering of a bit behind the scenes, acknowledging the fact that the CMS’ rate-adjusting system is very isolated and isolated.

For example, home health agencies have a good argument that their services reduce the costs of the entire health system. So the healthy home health industry would help the entire health care system.

Joan Cunningham, CEO of the Partnership for Quality Home Health Care, noted this to Home Health Care news on Wednesday.

“On the one hand, CMS is proposing some big cuts, not just in 2023, but in years beyond,” Cunningham said. “On the other hand, the [Home Health Value-Based Purchasing Model] It is set to expand to all 50 states starting in 2023. CMS predicts that Home Health will achieve [millions] in savings [due to] Avoid hospitalization, readmission, etc. For me, it’s an amazing duo that I find in a massive struggle.”

HHVBP is one of the biggest savers among CMMI models. Source: Lincoln Healthcare

But Fermat reiterated that this nuance is not part of CMS’s calculus.

“I don’t think it would be enough to say ‘the services we provide have a negative impact,’ and that is true,” Verma said. “If we do a really good job on home health, we can prevent hospitalizations, we can keep people out of nursing homes…but that’s not what they think. It’s very shortsighted when they just look at an industry, and they don’t really have the authority to look at it.” this way “.

outward look

Home health workers are, rightly, concerned about the problems in their own backyards right now, which is the proposed rule, which also hasn’t adjusted HHVBP despite the provider’s refusal.

But they were also hoping for some positive legislative momentum. For Medicaid home care providers, optimism about Build Back Better momentum has been futile.

For Medicare home health care providers, they were still hopeful that the Home Care Choice Act of 2021 would be in place by the end of the year.

Verma says that’s unlikely, given the upcoming election cycles.

“I wish I could say something was going to happen,” she said, “but I don’t see it.” “We’re sitting here in mid-June. And it’s election season. So usually last August, everybody’s back in their areas, and they’re campaigning. So if anything is going to happen, it has to happen relatively quickly, and we’re running out of time.”

It is also unlikely that the problem of telehealth at a fair price for home health providers will be resolved any time soon, something Verma said she was “disappointed” about.

“[CMS] “He just sees it’s an increase in usage,” Verma said. “And you know, quite frankly, I’m surprised and disappointed that they haven’t worked on this. Because we’re talking about expanding dental services. We’re talking about expanding vision care, and these things are being made available in the [Medicare Advantage]. But telehealth, it would be a real tragedy for that not to continue.”

And while home caregivers generally like to see themselves as “recession-resistant,” a bad economy is usually not a good sign for anyone.

This threat of stagnation was Fermat’s ultimate prediction.

“I’m not an economist. I’m just obsessed with healthcare politics,” she said, but I think that’s where we’re headed. “This time around, it’s a completely different environment where there are a lot of things that come into play in the supply chain. …So, you know, it seems inevitable.”

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