The healthcare industry is nearing a breaking point due to the Centers for Medicare & Medicaid Services’ 3.925% behavioral rate cut enacted in January, home care leaders said recently.
“Hospitals are saying, ‘we can’t find a place to send out patients,’ and patients are saying the same thing,” William Dombi, president of the National Association for Home Care & Hospice said during a McKnight’s Home Care Newsmakers podcast. “We’re starting to see home health agencies reject care for Medicare Advantage patients because they are paying less than cost. Those are signs and symptoms that the sky is starting to fall.”
Dombi and Partnership for Quality Home Healthcare CEO Joanne Cunningham spoke during the podcast about how the rate cut has contributed to staffing shortages, which have resulted in a drop in hospital-to-home health conversation rates. Dombi provided the example of one company that failed to recruit a larger number of nurses because wages weren’t high enough.
Because of the fallout, Cunningham pointed out that she does not think CMS will impose a temporary rate adjustment — which could total billions — in a proposed rule due out this summer.
“The industry has worked very very hard to make it clear to CMS that these reductions are having a negative impact and are causing systemwide delays and implications for transitioning patients out of hospitals and into the home,” Cunningham said. “I hope CMS is approaching this in a cautionary way.”
As part of their efforts to provide a solution, in April they asked CMS to impose a one-time forecasting error for market basket miscalculations in 2021 and 2022.
The industry is going to have to adjust other ways to the cuts, Dombi noted. MA plans, for example, need to consider raising payment rates.
“They’re gonna have to look at the fact that home health brings a value beyond just providing home care; it saves them money for that extended stay in the hospital or the rehospitalization along the way,” he said.
Dombi and Cunningham have argued that there needs to be fundamental reform in the payment system so that Medicare is not subsidizing Medicaid and MA.
“It’s unfortunate that you really don’t see the kind of change we need until we’re moments away from disaster,” Dombi said.