WHO – Wisconsin Homecare Organization

In a bipartisan effort, Sen. Russ Feingold (D-WI) and Sen. Susan Collins (R-ME) and  have introduced a bill (S.3315) that seeks to institute a rational, more transparent process for evaluating increases in the average case mix weight of Medicare home health services. The move comes as a result of the Centers for Medicare & Medicaid Services’ (CMS) regulatory cuts to address so-called “case mix creep,” which so far have been determined under a nebulous process and analyses (NAHC Report, 5/1/08). A companion bill is expected to be filed shortly in the House of Representatives.

The cuts stem from Medicare’s allegation that home health agencies have increased patient severity scores — otherwise known as case mix weights — to achieve higher payments. NAHC and the home care community have countered that assertion with evidence that increased patient severity scores are a result of changes in the makeup of patients receiving home health services. These changes include increased acuity of patients discharged from hospitals, a shift of patients from rehabilitation facilities and nursing homes, and increased age of patients admitted to care.

The Feingold legislation would establish a rational process by which CMS could evaluate whether changes in case mix weights are a result of patient changes or unwarranted coding “creep.” The new process includes a requirement that CMS rely on a technical advisory group composed of parties such as NAHC, beneficiary representatives, and health policy experts to develop the criteria necessary to analyze changes in case mix weights appropriately. In addition, CMS would be required to address any payment rate adjustments that are based on case mix weight changes in a transparent manner using public notice and rulemaking for developing standards, and also to fully disclose any studies on the subject and data used in its analysis before such an adjustment could take effect.

In addition, the process established under the bill would require CMS to consider the impact of changes for other care venues/providers that can affect the nature of patients served in home health. For example, changes in coverage and reimbursement standards for inpatient rehabilitation facilities potentially can affect the type and condition of patients referred to home health services. CMS would also need to demonstrate that any case mix weight changes uncovered have resulted in an increase in Medicare expenditures. Current evidence indicates that Medicare spending for home health services is under-budget — a strong indication that there have not been inappropriate increases in case mix weights.

One other aspect of the bill is crucial to the process of evaluating the propriety of case mix weight growth. This is a provision that requires Medicare to evaluate changes in services and their intensity through specific claims review — rather than a simple regression analysis of statistical data. With the Medicare Home Health Prospective Payment System, the use of therapy services has a significant impact on case mix weights.

In making the regulatory “case mix creep” cuts to date, CMS did not evaluate whether therapy was needed by patients. Instead, CMS simply examined statistical characteristics such as the patient’s hospital Diagnosis-Related Group (DRG), concluding that growth in case mix weight was inappropriate. It is estimated that nearly two thirds of the home health case mix weight increase determined relates to the provision of therapy services. An actual claims review approach is a more rational way of evaluating those services, especially given that CMS had judged earlier that indicators such as DRGs are not reliable predictors of home health therapy needs.

It can be expected that CMS will again focus on the case mix creep issue as early as this year. While the legislation would not apply to case mix regulatory payment cuts currently scheduled for 2010 and 2011, it would apply to any new cuts that CMS might consider. NAHC believes that the bill would be scored as budget-neutral by the Congressional Budget Office and would not require an offset.

ACTION NEEDED NOW:  Call Sen. Herb Kohl (202-224-5653) and urge him to cosponsor the “Home Health Care Access Protection Act of 2010.” The goal is to get a majority of senators to cosponsor the bill (and representatives to sponsor a House companion bill, once one is filed) as soon as possible, since there are indications that CMS is considering additional regulatory home health cuts for 2011. Tell Kohl’s staff to contact Priscilla Hanley at (202) 224-2523 to voice support and add Kohl’s name to the Senate bill.

Click here to see talking points on this legislation to help you in discussions with your legislators.

You can also send messages using the NAHC Legislative Action Network urging that your senators help ensure adequate payment for home health services by cosponsoring this bill. Click here to enter your zip code and get started — it takes just a few short minutes.