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Three Big Threats to Home Health in the Proposed FY2019 Budget

Posted on Sunday, February 18, 2018 3:52 PM

On February 12th, President Trump released his proposed FY2019 budget.  This is an annual event, and does not go into law until Congress approves it. This year it sheds light on the administrations thinking regarding home health and details three big possible threats to home health:

  • Proposed change in funding strategy to end open-ended Medicaid funding with the repeal and replace of the Affordable Care Act
  • Renewal of the call for a unified Post Acute Care Prospective Payment System (PAC-PPS)
  • Implementation of HHGM with an eye towards a $16B cut in reimbursement

“As expected, the budget calls for repealing and replacing the Affordable Care Act. As part of the replacement strategy, the White House proposes a defined federal contribution; block granting all Medicaid funding to the states, as opposed to the current open-ended system. Additionally, they propose stabilizing long-term health care spending, sharing savings across states, and promoting innovation through legislation. This is projected to save $306 billion over the next ten years for the Department of Health and Human Services, and nearly $680 billion over ten years.”

A unified PAC-PPS has been having been under discussion in Congress and in the Medicare Payment Advisory Committee (MedPAC) for nearly a decade. In such a system, the four post-acute care providers; home health agencies, skilled nursing facilities, inpatient rehabilitation facilities, and long-term acute care hospitals would be brought into one payment system that applies equally to all. Currently, each has a separate payment structure. While there are similarities between each, Congress and MedPAC think these disparate systems cause disincentives for treating certain patient types and conditions. A unified PAC-PPS would create a standard base rate and case-mix adjustment to determine reimbursement. In the case of home health agencies, an additional modifier would be applied to reduce the reimbursement to account for less overhead expenditures compared to the institutional settings. This additional modifier poses a threat to home health as it could be too significant leading to inadequate rates and could potentially be subject to annual updates. This could lead to yearly battles to ensure its accuracy.

In another section of the proposal titled “Implement a More Accurate Payment System for Home Health,” the Administration calls for shifting the home health payment model under Medicare to the home health groupings model (HHGM). The proposed language calls for a January 1, 2020 start date and is projected to save $16.7 billion over a ten-year timeframe. Elements of payment reform associated with the HHGM model were included in last week’s spending package that became law on February 8, 2018.”

Corridor continues to monitor all the changes in Washington that impact the home health and hospice industry. We will continue to advocate for our industry and bring you all the key up to date happenings.   

Source: NAHC Report


About Corridor

Corridor is a trusted home health and hospice consulting partner to agencies both large and small. We provide the most up-to-date comprehensive homecare industry educational resources and consulting available.

We specialize in delivering better revenue cycle management solutions, coding and documentation review services, regulatory compliance, and healthcare consulting.

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