Metrics Matter: What Impact Will New Medicare Regulations for Therapy-Intensive Episodes Have on Your Home Health Market?

Following the change in Medicare reimbursement methodology in 2008, a higher percentage of therapy-intensive episodes occurred. In response to this shift – and in an attempt to remain budget neutral – Medicare recently lowered the case weights on these episodes for 2012, while raising the case weights on less intensive patients. Will the impact of this latest change in Medicare regulations be uniform for all home health markets? To answer that question, this month’s metric compares the average number of therapy visits per episode on a statewide basis.

What Impact Will New Medicare Regulations for Therapy-Intensive Episodes Have on Your Home Health Market?
 

The Medicare reimbursement for therapy-intensive episodes is based on meeting certain visit thresholds. So for this metric, we analyzed 2009 Medicare claims data for the average number of therapy visits per episode on a state-by-state basis. Based on our analysis, we can conclude the following:

  • The national average for the number of therapy visits per episode is 5.9.
  • There is a 60% difference between the average of number of therapy visits per episode for states in the highest quartile (7.9) compared to the state average in the lowest quartile (5.0).
  • The two states with the lowest levels of therapy visits – Louisiana (3.7) and Texas (4.3) – also have the highest level of recert rates, as we demonstrated in a previous article. This finding isn’t surprising considering patients with such chronic medical conditions as diabetes and heart disease typically necessitate long lengths of stay and less therapy.
  • With 4.3 therapy visits per episode, Vermont is the third lowest state in our analysis. Operating under a certificate-of-need licensing process, this state has a strong tradition of using home care. In Vermont, however, almost all home health providers are non-profits and there is a strong presence of post-acute rehab providers. Is this the model of the future?
  • On the other end of the spectrum, those states in the highest quadrant have the greatest percentage of episodes that will be impacted by the reimbursement shift. As a result of this new regulation, for example, the reimbursement will be reduced on 30% of Utah’s episodes.
  • Some skeptics attribute the higher percentage of therapy-intensive episodes to for-profit greed. It should be noted, however, that certificate-of-need environments – found in the District of Columbia and such states as Georgia, Kentucky, North Carolina, South Carolina, Tennessee, and West Virginia – will have more than 20% of their episode reimbursement downgraded. The national average is 17.9%.

Click here or call 215-657-7373 to learn more about this metric, as well as the many ways you can use Healthcare Market Resources’ data to help determine how industry trends and government regulations will impact your specific market.