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News and Press: HCAF in the News

Repeal Medicare Demonstration to Protect Home Health for Seniors

Friday, November 4, 2016   (0 Comments)
Posted by: Kyle Simon

By Kyle Simon (Published in RealClearHealth on November 4, 2016)

Since January 1, 2011, 10,000 Baby Boomers are turning 65 years old every day. As a result, nearly 22 million new Medicare beneficiaries are eligible to receive benefits ranging from surgery and inpatient hospital care to prescription dru­­­­gs and home health care. The latter benefit provides the most cost-effective, convenient skilled health care at home to more than 3.5 million Americans each year.

As Americans age at this staggering rate, it is critical, now more than ever, that the option to age at home be accessible across our nation. Yet, home health care has been under siege by regulators and legislators over the past decade, including a series of reimbursement cuts, new burdensome and costly regulations, and the threat of copays that would hinder patient access to care. Florida has a unique vantage point on the issues impacting the home health industry; we are uniformly subject to policy makers’ sledgehammer approach to eliminating fraud and abuse while working among the bad actors who exploit the Medicare program.

The Centers for Medicare and Medicaid Services (CMS) efforts to eliminate fraud and abuse are necessary to protect program integrity, which is the practice of a majority of caregivers in our industry. Florida –– more specifically, South Florida –– is the epicenter of home health fraud. To combat this, CMS in 2013 imposed a three-year moratorium on new Medicare agencies in Miami-Dade County, a two-year moratorium in Broward County (Fort Lauderdale), and a six-month moratorium statewide. As a result, honest providers cannot currently expand their home health businesses across our ever-growing state, and beneficiaries have fewer choices as to which agency cares for them.

While industry leaders recognize the problems caused by the minority of providers, we must consider how honest providers are impacted by burdensome requirements implemented to rein in fraud and abuse. Among the newest and most aggressive mandate by CMS is the Pre-Claim Review (PCR) Demonstration, a three-year program in five states, including Florida, beginning this year. Home health services under the Medicare benefit are prescribed by a physician for an episode of care that can last up to 60 days. Providers assess patients and provide the necessary treatments and services. Once the patient is discharged or the 60-day episode ends (whichever comes first), then the provider submits a final claim for reimbursement of the services that were provided during the patient’s course of care. Oftentimes, home health providers have to chase down signed documentation to submit a final claim.

Under the PCR demonstration, however, agencies must submit all signed documentation to Medicare at the outset of the episode and receive a notice of affirmation that the agency will be fully reimbursed for services. This PCR process applies to every single Medicare patient, thus requiring significant education to both physicians and home health providers so that paperwork can be submitted and affirmed, and beneficiaries can move from institutional settings to home for care. Upon receiving the referral, home health providers are required to begin treating the patient, even if obtaining documentation and receiving an affirmed notification is not guaranteed. In those instances, the home health provider is left holding the bag.

Ahead of the August 3, 2016 PCR implementation in Illinois, CMS assured providers that the demonstration “should not delay care to Medicare beneficiaries and does not alter the Medicare home health benefit.” Now three months later, Illinois agencies have experienced a chaotic and expensive mess in which 60-80 percent of providers are receiving denials for payment after care has been provided to beneficiaries. Industry leaders witnessing the PCR demonstration agree that providers are contending “time-consuming new paperwork burden, an inefficient electronic system that cannot process the documentation, [and] physician unfamiliarity with what is needed for PCR due to poor ‘education’ by CMS.” As a result, cash flow problems abound, most devastatingly affecting smaller agencies. According to reports, at least one Illinois agency has closed its doors, and increases in denials have led agencies to withhold the start of patient care until a favorable decision is rendered by Medicare, thus leading to longer hospital stays and more waste.

PCR is just one concept imposed by regulators to reduce fraud and abuse. Zone Program Integrity Contractors were created by Congress in the mid-2000s to audit claim submissions, which has led to heaps of denials for reimbursement by Medicare. Additionally, the 2011 face-to-face encounter requirement saddled physicians, who serve as the gatekeeper for home health services, with burdensome paperwork and confusing compliance rules that have resulted in countless denials for reimbursement after services have been provided. Moreover, Congress, the Medicare Payment Advisory Commission (MedPAC), and CMS have also called for reimbursement cuts, which have been realized to the tune of a $110 billion cut between 2009 and 2019. Even CMS projected that 43 percent of home health agencies will be under water by 2017 due to the severity of cuts. On top of these challenges, the threat of a copayment for the home health benefit rears its head year in and year out, which would amount to a sick tax falling most heavily on the oldest, sickest, poorest seniors that could shift them to more costly settings like hospitals or nursing homes.

The Medicare home health industry has had no choice but to adjust to increased pressures and aggressive oversight. In Florida, where Medicare home health is at a standstill, providers were granted a reprieve from the October 1 effective date of the PCR demonstration, a rare bright spot following a bipartisan call to CMS by Florida Senators Bill Nelson and Marco Rubio. In delaying PCR in Florida, CMS recognized the critical need to better educate home health providers, physicians, and beneficiaries.

It goes without saying that eliminating fraud and abuse must continue to be a priority. It is also evident that beyond home health care, our nation has no long term care solution that controls cost and provides quality care for seniors. As the Medicare rolls grow and Florida providers prepare for PCR, consider this a clarion call to policy makers by a stretched-and-slashed industry: Home health care providers must be given a seat at the table in order to achieve pragmatic and effective solutions to reduce waste, fraud, and abuse and protect this critical benefit. The 3.5 million home health care patients in the U.S. deserve better and the viability of our long-term care options depend on it.


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