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  • APTA: CMS Proposal for Home Health Creates 'Perverse Financial Incentives' to Reduce Care

    APTA delivered comments to the US Centers for Medicare and Medicaid Services (CMS) that make no bones about the agency's proposed changes to the home health payment system. The bottom line, according to the association: The plan contains "significant flaws" that "will have a harsh and dramatic effect on patient care." And what's more, APTA says, CMS may not have the legal authority to do what it wants to do, at least in the way it hopes to do it.

    The letter from APTA provides a detailed deconstruction of a CMS proposal to radically change the payment environment for home health (HH) in ways that would directly impact patients, physical therapists (PTs), and physical therapist assistants (PTAs)—and not for the better. Those proposed changes would move episodes of care from 60 to 30 days, and would include the adoption of a new case-mix model, known as the Home Health Grouping Model (HHGM), that removes physical therapy service-use thresholds from the mix.

    All told, the changes being proposed could result in a $950 million payment reduction to home health, according to CMS. And CMS wants to roll out the new system in 2019. The CMS proposal generated a strong reaction in the HH community in general, and within APTA in particular, resulting in a record-breaking number of individual comment letters submitted to CMS, facilitated by template text that APTA made available online.

    In its letter to CMS, APTA provides comments on the entire package of proposals, but focuses particular attention on the HHGM, which it describes as a system that "undervalues the important role of rehabilitation and creates perverse financial incentives to deliver less than appropriate care." APTA's letter acknowledges the importance of creating health care delivery systems that are "better, smarter, and healthier," but argues that the HHGM moves things in the opposite direction.

    APTA writes that as a whole, the HHGM "lacks person-centeredness and…fails to support proven interventions to address behavioral, social, and environmental determinants of health. While CMS has committed to putting first the best interest of the people it serves, the motivation behind the HHGM appears to focus solely on reducing Medicare spending."

    On top of that, says APTA, CMS may be going about its proposal in a way that exceeds its authority. The association's argument is based on statutory limitations that require CMS to implement changes in a "budget neutral" manner, meaning that only Congress has the authority to impose changes that significantly impact the HH budget, down or up. APTA writes that while CMS was provided with a temporary window to make non-budget-neutral adjustments under the Affordable Care Act (ACA), that window closed this year.

    "Unless the statute says otherwise, changes to elements of [home health payment systems] must be made in a budget-neutral manner across the system," APTA writes. "If the HHGM unintentionally causes access problems through rate cuts instituted by regulation, Congress would then be tasked with finding budget offsets to cover the 'cost' of fixing the mistake."

    Making matters even worse, according to APTA, is the CMS proposal to begin implementing the HHGM in 2019. The association asserts that if it moves forward, the new model shouldn't be rolled out any earlier than 2020, and that more dialogue and education take place before a finalized system is put in place.

    Among other elements of APTA's comments:

    • APTA encourages CMS not to eliminate rural add-on payments in 2018, citing concerns that the change would worsen workforce shortages in rural areas.
    • The association supports proposed modifications to the HH Quality Reporting Program and Value-Based Purchasing Program, and is in favor of "overarching" CMS strategies around assessing and adjusting for social risk factors.
    • APTA urges CMS to move away from its proposal to use a single diagnosis to categorize an episode into a clinical grouping, and instead allow for combinations of diagnoses to ensure proper therapy interventions. Similarly, the association recommends that CMS expand its list of comorbidity subcategories "to better capture diagnoses that cause higher resource allocation."

    Still, the association's most significant concerns are linked directly to the HHGM.

    "The HHGM would not improve patient care or aid CMS in aligning home health [prospective payment systems] with its overarching…policy goals," APTA writes. "We believe the HHGM would create new program integrity issues, compliance challenges for providers, and new access issues for beneficiaries."