Former US Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma did not paint a rosy outlook for the home healthcare industry this week in Chicago.
In fact, almost nothing she said sparked optimism among the operators in the crowd.
As for the economy, she said she would guess a recession is imminent, though she acknowledged it was not her job to forecast such things. As for legislation passed in Washington, DC, this year — possibly even favorable home care legislation — she said she “didn’t see that happen.” And when it comes to home health and the rule proposed last week, she told providers to expect rebuttal to be an uphill battle.
She offered perspective on how the rule is determined, highlighting the fact that from now on, operators can direct their anger at the system, but not necessarily CMS as a whole or any of the individuals who currently make up administration.
“I think in this case – in this case and in all cases – they look at it very myopically, don’t they?” Verma said Wednesday at Lincoln Healthcare’s Home Care Innovation and Investment Conference. “That is, they look at the cost reports or what the data says.”
CMS released its proposed payment rule for home health for fiscal year 2023 on Friday evening, which included a decrease in payment rates of 4.2%, or $810 million less than 2022 rates. National Association for Home Care & Hospice (NAHC), in response, said “the stability of home health care is in jeopardy.”
The agency knows there’s a coding intensity factor with the Patient-Oriented Grouping Model (PDGM), which ended up lowering rates, Verma said.
“They actually said, ‘Okay, there’s an increase that we recommend, but it’s offset because of the new model implementation. And the idea was that there would be behaviors that would potentially encourage vendors to increase coding intensity,” she continued. “Whether it’s true or not, I don’t know.”
Verma also acknowledged that data has become difficult to assess since the outbreak of the COVID-19 virus, another sign that CMS’s proposed rule methodology may be inherently flawed.
The obvious caveat, however, is that this is still only a proposed rule and can be influenced during the comment period.
But it won’t be easy. Just as CMS came up with the proposed rule strictly using data, they will only be influenced by data, according to Verma.
“It has to be data-driven,” she said. “I think if the providers were able to show evidence – ‘Here’s the data, which is why we disagree with your analysis. Here is our analysis. – and it’s based on the data, they have a better chance than just saying, “We don’t agree with this from a political point of view”. It will not work.
Perhaps even more discouraging was Verma’s additional offer of a peak behind the curtain, acknowledging the fact that the pricing system at CMS is very siled and isolated.
For example, home health agencies have a good argument that their services reduce costs for the entire health care system. A healthy home healthcare industry would therefore help the entire healthcare ecosystem.
Joanne Cunningham, CEO of the Partnership for Quality Home Health Care, reported it to Home Health Care News on Wednesday.
“On the one hand, CMS is offering deep cuts, not just in 2023, but in the years to come,” Cunningham said. “On the other hand, the [Home Health Value-Based Purchasing Model] is expected to expand to all 50 states starting in 2023. CMS anticipates home health will provide [millions] in savings [due to] hospitalizations avoided, readmissions, etc. For me, it’s a surprising dichotomy that I find in a huge conflict.
But Verma reiterated that this nuance is not part of the calculation for CMS.
“I don’t think it’s going to be enough to say, ‘The services we provide actually have an impact downstream,’ which is true,” Verma said. “If we do a really good job of home health, we can prevent hospitalizations and we can keep people out of nursing homes… but that’s not how they think about it. It’s very myopic when they only look at one industry, and they don’t really have the authority to look at it that way.
Home care operators are rightly concerned about their own backyard issues at the moment, namely the proposed rule, which also has no modify HHVBP despite the supplier’s refusal.
But they also hoped for positive legislative momentum. For Medicaid-based home care providers, the optimism generated by the momentum of Build Back Better has been for naught.
For Medicare-based home care providers, they still hoped that the Choose Home Care law of 2021 could materialize by the end of the year.
Verma says that’s unlikely, given upcoming election cycles.
“I wish I could tell something was going to happen, but I can’t see it,” she said. “We are sitting here in mid-June. And it’s an election season. So usually after August everyone is back in their ridings and campaigning. So if there’s anything that needs to happen, it needs to happen relatively quickly, and we’re running out of time.
The issue of telehealth reimbursement at a fair rate for home care providers is also unlikely to be resolved anytime soon, something Verma said she was “disappointed about”.
“[CMS] just sees it as an increase in usage,” Verma said. “And you know, quite frankly, I’m surprised and disappointed that they haven’t worked on that. Because we are talking about expanding dental services. We talk about expanding vision care, and those things are provided in [Medicare Advantage]. But telehealth would be a real tragedy if it didn’t continue.
And while home care providers generally like to think of themselves as “recession-proof,” a bad economy isn’t usually a good sign for anyone.
This threat of recession turned out to be Verma’s latest prediction.
“I am not an economist. I’m just a health care policy geek. But I think that’s where we’re headed,” she said. “This time it’s a very different environment where there’s so much at stake in the supply chain. … So, you know, it seems kind of inevitable.