The Medicare Payment Advisory Commission (“MedPAC”) made two recommendations to Congress in their recent Report. These are as follows:
“Our review of payment adequacy for Medicare home health services indicates that access is more than adequate in most areas and that Medicare payments are substantially in excess of costs. Home health care can be a high-value benefit when it is appropriately and efficiently delivered. Medicare beneficiaries often prefer to receive care at home instead of in institutional settings, and home health care can be provided at lower costs than institutional care. However, Medicare’s payments for home health services are too high, and these excess payments diminish the service’s value as a substitute for more costly services. On the basis of these findings, the Commission’s recommendation for 2023 is to reduce the Medicare home health prospective payment system (PPS) base payment rate by 5 percent.”
“The lack of detailed information on the use of telehealth in 2020 impairs our ability to assess the changes to the benefit in this year, including our ability to assess the impact of the PDGM and the PHE. As the use of telehealth in home health care grows, the lack of information about telehealth visits could also compromise CMS’s ability to accurately set payments under the home health PPS. Payment accuracy would be improved by requiring HHAs to report the use of telehealth services on home health claims. For these reasons, the Commission recommends that the Secretary require HHAs to report the provision of telehealth during home health care on Medicare claims, similar to the requirements that already exist for in-person visits and other home health care services.”
The Report, as always, provides significant information regarding the home health industry, provider characteristics, profits margins, access to care, and much more. Based on the Report, the number of home health agencies continued to decline in 2020. The Report provides the following number of active home health agencies:
Medicare home health expenditures have declined to an amount lower than home health expenditures in any pre-pandemic year going back to 2011. In 2020, Medicare home health expenditures are reported at $17.1 billion compared to the previous low amount reported (2017 and 2019) at $17.9 billion.
The COVID-19 PHE is discussed relative to home health services and home health providers including a reduction in total home health expenditures. The reduction in Medicare expenditures is the result of a reduction in utilization and not a per-beneficiary reduction. Actual spending per beneficiary who used home health services increased by 2.8% from 2019. According to MedPAC, monthly utilization trends indicate that the COVID-19 PHE, not PDGM, accounted for most of the volume decline in 2020. The following are noteworthy from the Report:
- “January through March 2020. For the first two months of 2020, the number of home health periods provided by HHAs was slightly less than the volume delivered during the same time frame in 2019.”
- “April and May 2020. In April and May of 2020, volume dropped to about 80 percent of the level observed in the same period of 2019, reflecting the widespread disruptions to the health care system and the economy that began in March 2020.”
- “June 2020 and July 2020. In these months, home health volume rebounded. By July 2020, volume had recovered to about 96 percent of the home health periods that were provided in July 2019.”
- “August through December 2020. Volume did not change substantially from the July 2020 level and continued to average about 830,000 periods per month, a level equal to 95 percent of utilization in 2019 for the same time frame.”
The Report goes further in attempting to understand the reduction of home health expenditures; however, MedPAC admits that the increased use of telehealth services makes it difficult to interpret the 2020 decline of in-person visits from those same visits in 2019.
The entire MedPAC Report to Congress is available at MedPAC March 2022 Report to the Congress. Home health services are discussed in Chapter 8.