The Home Health Groupings Model: A Commentary

I recently submitted comments to the 2019 Medicare Home Health Rule, which lays out the Home Health Groupings Model for reimbursement. Here is the commentary in its entirety:

Comments Submitted

I would like to address several areas of the proposed rule for 2019 under the new Home Health Groupings Model (HHGM):

1.  Set LUPA percentage to be 10th percentile of visits per HHGM

This approach changes the concept of what a LUPA was supposed to be from the original legislation, which was designed to dis-incentivize making a limited number of visits and being rewarded with the full prospective rate.  By setting these thresholds based on current visit patterns, it changes the LUPA rate to be a means of lowering overall reimbursement.  Furthermore, to base this limit on visit patterns under the current reimbursement system for a new one where the patterns have not been established seems to be unfair.

2. Give the early episode distinction only when there is no prior home health activity for 60 days

If a patient returns to a hospital in the middle of a home health episode, usually because of an acerbation of their underlying clinical condition, they likely are as sick as when they originally entered home health and need the same level of resources they had originally.  This higher level of resources required should be reflected in the case weight and the patient should be classified as an “early” episode.  As with other Part A services, the patient should be automatically discharged from home health if they enter an alternative setting of care.  Also, Partial Episodic Payment should be eliminated since the admission was a result of a change in the patient’s condition.  Because of the strict rules regarding admission to these other levels of care, there is little likelihood of abuse of this rule.

3. Impact of Maintenance Therapy

Medicare only recently issued guidelines on what would qualify a patient for maintenance therapy.  This delay from the initial ruling has prompted agencies to be reluctant to put patients on this therapeutic approach when the rules were not established thereby putting themselves at the vagaries of the intermediary’s review process.  It is clear from the homebound requirement that many patients are mobility challenged.  There is an unmet need for therapy for these patients who suffer from a chronic condition which gradually lessens their mobility such as chronic heart failure or COPD.  It is clear that many patients in this situation could benefit from maintenance therapy.  A way should be found to account for this demand in the new reimbursement system.

4. Cost-based Reimbursement

The HHGM rule bases reimbursement on the current level of costs from cost reports.  it is generally accepted that cost report accounting does not reflect all the costs involved in running a home health agency.  Furthermore, the lack of any surplus/profit in the rates does not allow agencies to find a way of funding their capital needs.  It is apparent that the use of technology becomes more important in the delivery of services in the home.  The lack of a profit portion in the rates inhibits agencies from making the investment in technology needed to provide the best level of care to its patients.

5. Use of a 30-day Episode

While it is understandable that most resources are expended in the first 30 days of home health care, the shorter reimbursement window is inconsistent with the move to population health and value-based care.  The longer episode length allows for agencies to be made to monitor at-risk patients to prevent re-hospitalizations. Given the focus of these value-based payments models for other upstream providers through bundles and Accountable Care Organizations, there is no mechanism to compensate the agency once the patient is discharged.  In fact, there are legal opinions, that state that following up on a discharged patient is considered a solicitation of business and therefore, illegal.  There needs to be a vehicle which allows home health patients who are part of a bundle to be monitored.  For ACO participants, this vehicle should enable community providers to anticipate and prevent hospitalizations.

Bottom Line

We believe that Medicare has invested too much in this project to abandon it and that it will likely survive in some format or be delayed.  At any rate, the home health industry is likely to be living with the concepts behind HHGM for some time to come.  Further, it is clear that Medicare is committed to move away from a volume-driven reimbursement in post-acute care.  Skilled Nursing Facilities have “abused” the use of therapy with a disproportionate amount of cases at the highest reimbursement levels.  Being proposed for them is a rule that utilizes patient characteristics to determine reimbursement levels for therapy patients.  Therefore, we have chosen to address several areas that we find objectionable.