Medicare Proposed Home Health Payment Changes

It is now often acknowledged that keeping patients, even seriously ill chronic disease patients, in their homes and bringing care to them as much as possible, probably creates cost savings, greater patient satisfaction and at least as good quality outcomes.  So it might seem to make sense to encourage greater use of home health care.  Apparently not so, at least if you are CMS, which administers the Medicare program.  In its annual rule regarding payment for home health care, CMS proposes changes for 2011 which appear to do nothing to facilitate innovate use of home health care.   (CMS Proposed Rule)

The details of the rule are interesting.  Medicare basically pays on a prospective basis that depends on the patient’s condition.  CMS found that patients were being coded as significantly sicker than they actually were, so it has responded by actually reducing payment rates about 4% in 2011 and 2012.  CMS is also requiring greater documentation requirements from physicians and therapists about the need for and value of home health care.  It also revised the set of outcome measures known as OASIS that are reported in the home health agency database.

What is even more interesting, however, is the manner in which this and other provider reimbursement rules reveal CMS’ mindset.  Not without justification, CMS has become obsessed with the games providers play to maximize reimbursement.  In the case of home health care, this means documenting patients as sick enough to warrant the next higher number of visits, which increases reimbursement.  Of course, CMS should anticipate that providers are always going to respond to the incentives put in front of them and shouldn’t be surprised when they do.  What is most striking is the complete lack of any attempt to recognize and encourage greater use of technology to improve care of patients at home, at a time when wireless and other telehealth technologies are emerging at a very rapid pace.  We suspect Medicare would save a lot of money if it promoted greater use of home health, instead of making it harder for people to be in the business.