The former U.S. Centers for Medicare & Medicaid Services (CMS) administrator, Seema Verma, did not paint a rosy outlook for the home health industry this week in Chicago.
In fact, hardly any of what she said evoked optimism among operators in the crowd.
In regards to the economy, she said it would be her guess that a recession is around the corner, though she acknowledged it was not her job to forecast such things. In terms of legislation being passed in Washington, D.C., this year – perhaps even favorable home-based care legislation – she said she “didn’t see it happening.”
And when it came to the home health nitty gritty and last week’s proposed rule, she told providers to expect the rebut to be an uphill battle.
Verma did offer perspective on how the rule is determined, pointing to the fact that, as of right now, operators can aim their ire at the system, but not necessarily CMS as a whole or any of the individuals that currently make up the administration.
“I think in this case – in this case and in every case – they’re looking at it very myopically, right?” Verma said at Lincoln Healthcare’s Home Care Innovation and Investment Conference Wednesday. “Which is to say, they’re looking at the cost reports or looking at what the data says.”
CMS released its FY 2023 home health proposed payment rule late Friday, which included an aggregate decrease to payment rates by 4.2%, or $810 million less compared to 2022. The National Association for Home Care & Hospice (NAHC), in reaction, said “the stability of home health care is at risk.”
The agency knows there’s a coding intensity factor with the Patient-Driven Groupings Model (PDGM), which ended up decreasing the rates, Verma said.
“They actually said, ‘Okay, there’s an increase that we’re recommending, but it’s offsetting because of the new implementation of the model.’ And the idea was that there’s going to be behaviors that would potentially encourage providers to increase the coding intensity,” she continued. “Whether that’s true or not, I don’t know.”
Verma also acknowledged that data has become hard to evaluate ever since the onset of the COVID-19 virus, another sign that CMS’ proposed rule methodology may be inherently flawed.
The obvious caveat, however, is that it still is only a proposed rule and there is an opportunity to impact it during the comment period.
But that won’t be easy. Just as CMS came up with the proposed rule strictly using data, the agency will only be swayed by data, according to Verma.
“It has to be data-driven,” she said. “I think if providers were able to show evidence [by saying], ‘Here’s the data, this is why we disagree with your analysis. Here’s our analysis.’ And that’s data driven, they have a stronger chance than just saying, ‘We disagree with this from a policy perspective.’ That’s not going to work.”
What was perhaps even more discouraging was Verma’s further offering of a peak behind the curtain, acknowledging the fact that the rate setting system at CMS is very siloed and isolated.
For instance, home health agencies have a good argument that their services decrease costs for the entire health system. A healthy home health industry, then, would help the entire health care ecosystem.
Joanne Cunningham, the CEO of the Partnership for Quality Home Healthcare, pointed this out to Home Health Care News on Wednesday.
“On the one hand, CMS is proposing some sizable reductions, not just in 2023, but in years beyond,” Cunningham said. “On the other hand, the [Home Health Value-Based Purchasing Model] is set to expand to all 50 states starting in 2023. CMS is projecting that home health will deliver [millions] in savings [due to] avoided hospitalizations, readmissions and so forth. To me it’s a startling dichotomy that I find in tremendous conflict.”
But Verma reiterated that that nuance is not a part of the calculus for CMS.
“I don’t think it’ll be enough to say, ‘The services that we provide actually have a downstream impact,’ which is true,” Verma said. “If we do a really good job in 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’re just looking at an industry, and they don’t really have the authority to look at it that way.”
External outlook
Home health operators are rightly concerned with the issues in their own backyard right now, namely the proposed rule, which also did not tweak HHVBP despite provider pushback.
But they were also hoping for some positive legislative momentum. For Medicaid-reimbursed, home-based care providers, the optimism over Build Back Better momentum was all for naught.
For Medicare-reimbursed home health providers, they were still hopeful that the Choose Home Care Act of 2021 may come to fruition by the end of the year.
Verma says that is unlikely, given the upcoming election cycles.
“I wish I could say something was going to happen, but I don’t see it,” she said. “We’re sitting here in mid-June. And it’s an election season. So usually past August, everybody’s back in their districts, and they’re campaigning. So if there’s anything that’s going to happen, it has to happen relatively quickly, and we’re just running out of time.”
The issue of telehealth being reimbursed at a fair rate for home health providers is also unlikely to be resolved anytime soon, something Verma said she was “disappointed” about.
“[CMS] just sees it as an increase in utilization,” 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 those things are provided in [Medicare Advantage]. But telehealth, that would be a real tragedy for that to not continue.”
And even though home-based care providers generally like to view themselves as “recession-proof,” a bad economy is not typically a good sign for anyone.
That threat of a recession happened to be Verma’s final prediction.
“I’m no 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 many things at play in the supply chain. … So, you know, it seems kind of inevitable.”
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