Medicare Home Health Payment Reform May Jeopardize Access For Clinically Complex And Socially Vulnerable Patients

Abstract

The Affordable Care Act directed Medicare to update its home health prospective payment system to reflect more recent data on costs and use of services-an exercise known as rebasing. As a result, the Centers for Medicare and Medicaid Services will reduce home health payments 3.5 percent per year in the period 2014-17. To determine the impact that these reductions could have on beneficiaries using home health care, we examined the Medicare reimbursement margins and the use of services in a national sample of 96,621 episodes of care provided by twenty-six not-for-profit home health agencies in 2011. We found that patients with clinically complex conditions and social vulnerability factors, such as living alone, had substantially higher service delivery costs than other home health patients. Thus, the socially vulnerable patients with complex conditions represent less profit-lower-to-negative Medicare margins-for home health agencies. This financial disincentive could reduce such patients' access to care as Medicare payments decline. Policy makers should consider the unique characteristics of these patients and ensure their continued access to Medicare's home health services when planning rebasing and future adjustments to the prospective payment system.

Epidemiology of the Homebound Population in the United States

“…Our measures of homebound status may be helpful for targeting patients for programs that serve the homebound, and for developing new programs. As Medicare considers home health payment reform 28 and changes in the methods of paying for medical care, the development and dissemination of home-based primary care and associated quality frameworks is essential. 29 Much of what we know about the homebound is based on studies of those who receive home health care services 30,31,32 or home-based primary care.…”

The impact of home health length of stay and number of skilled nursing visits on hospitalization among medicare-reimbursed skilled home health beneficiaries

“…In 2013, CMS announced its decision to further reduce skilled home health's 60-day episodic payment from 2014 to 2017 by 3.5 percent per year, known as rebasing (Office of the Federal Register, 2013). Based on 2011 data, Rosati et al (2014) predicted that this reduction of the home health 60-day episodic payment may lead to higher service costs and, therefore, less profit, particularly for care of skilled home health patients with clinically complex conditions and social vulnerabilities (low income, living alone). Rebasing has the potential to further reduce access to skilled home health for these clinically complex and socially vulnerable patients and increase costs and adverse events such as hospitalization, emergency department use, and death.…”

Social Vulnerability and Medical Complexity Among Medicare Beneficiaries Receiving Home Health Without Prior Hospitalization

“…It is important to understand the characteristics of patients who may be affected by PDGM changes which reduce reimbursement for episodes not immediately preceded by hospitalization. Historically, home health providers have been highly responsive to payment system revisions ( 3 , 9–11 ). Previous changes in reimbursement have disproportionately reduced access for beneficiaries with greater disability, frailty, and social vulnerability ( 9 , 11 , 12 ), defined as the gap between an individual’s available resources and their life challenges ( 13 ).…”