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News Roundup: August 5, 2016

Home Healthcare Partnership Asks CMS To Pause Pre-Claim Review Demo

Published by Inside Health Policy
By Michelle M. Stein
August 5, 2016

The Partnership for Quality Home Healthcare is asking CMS to pause its home health pre-claim review demonstration program, which started in August in Illinois, and work with stakeholders on new ways to reduce improper home health pay through targeted reviews and refined eligibility determination documentation.

“The Partnership and the broader Medicare home health community are concerned about this program,” said Colin Roskey, executive vice president of the partnership, in a statement. “We want to work with CMS to find ways to reduce errors in filing claims. Physicians and other practitioners who order home health care want to do it correctly. We urge CMS to press the 'pause' button and find a better solution.”

CMS signaled in a paperwork reduction notice earlier this year that it was thinking about requiring prior authorization for home health claims in five “high risk fraud states” -- Florida, Texas, Illinois, Michigan and Massachusetts. Home health companies and some beneficiary advocates criticized the proposal, and a bipartisan group of 116 House lawmakers in late May asked CMS to scrap it. In June, CMS announced plans to test a revised version of the demonstration that would use a pre-claim review policy rather than prior authorization. Stakeholders said the pre-claim review demonstration was an improvement over the earlier prior authorization plan but were still concerned about the broad nature of the demonstration.

The partnership is disappointed that CMS is proceeding with the Aug. 1 implementation of the demonstration in Illinois, the group's statement says. The demonstration kicked off Aug. 3 in Illinois, and CMS says it will start no earlier than Oct. 1 in Florida and no earlier than Dec. 1 in Texas. Programs in Michigan and Massachusetts will not start until next year at the earliest.
“We will continue to work with lawmakers and CMS as we track, research and evaluate the impacts of the pre-claim review demonstration in Illinois so that we understand the consequences of the demonstration before it is advanced in other states,” said Roskey.

Roskey told Inside Health Policy the partnership wants to work with CMS on a targeted review approach during a pause in the demo, though CMS wouldn't necessarily need to target providers geographically.

Roskey said the partnership also would like to work with CMS on refining eligibility determination documentation during any pause in the demonstration.

CMS previously said that documentation problems cause the majority of improper payments in the home health sector, and home health providers in 2014 sued CMS over documentation requirements that were later changed by the agency. An industry insider said refining documentation is an ongoing process.

The partnership says home health leaders have warned CMS that the pre-claim review policies will lead to higher Medicare and patient costs, “as patients who would otherwise be served in their home may be referred to higher cost settings.” The industry insider said that the demonstration will make it materially easier for doctors to order nursing home care than home health care.

“Burdensome new policies that complicate and constrain access to home health could unnecessarily drive patients into higher cost settings as ordering physicians struggle to meet the demonstration's new requirements,” Roskey said in a statement.

Long-Term Care Is An Immediate Problem — For The Government

Published by Kaiser Health News
By Anna Gorman and Barbara Feder Ostrov
August 5, 2016

Donna Nickerson spent her last working years as the activity and social services director at a Turlock, Calif., nursing home.

But when she developed Alzheimer’s disease and needed that kind of care herself, she and her husband couldn’t afford it: A bed at a nearby home cost several thousand dollars a month.

“I’m not a wealthy man,” said Nickerson’s husband Mel, a retired California State University-Stanislaus professor. “There’s no way I could pay for that.”

Experts estimate that about half of all people turning 65 today will need daily help as they age, either at home or in nursing homes. Such long-term care will cost an average of about $91,000 for men and double that for women, because they live longer.

In California and across the U.S., many residents can’t afford that, so they turn to Medicaid, the nation’s public health insurance program for low-income people. As a result, Medicaid has become the safety net for millions of people who find themselves unable to pay for nursing home beds or in-home caregivers. This includes middle-class Americans, who often must spend down or transfer their assets to qualify for Medicaid coverage.

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Medicaid, known as Medi-Cal in California, was never intended to cover long-term care for everyone. Now it pays for nearly 40 percent of the nation’s long-term care expenses, and the share is growing. As Baby Boomers age, federal Medicaid spending on long-term care is widely expected to rise significantly — by nearly 50 percent by 2026.

The pressure will only intensify as people age, so both state and federal officials are scrambling to control spending.

“Medicaid bears an incredible financial challenge if substantial changes aren’t made,” said Bruce Chernof, president and CEO of the SCAN Foundation. (KHN’s coverage of aging and long-term care issues is supported in part by a grant from The SCAN Foundation.)

State Medicaid directors are closely watching as long-term care spending takes up larger shares of their budgets and squeezes out other programs, said Matt Salo, executive director of the National Association of Medicaid Directors.

“There isn’t a day that goes by they are not thinking about long-term care,” Salo said. “It makes up a huge portion of the entire budget and it’s growing … It is absolutely not sustainable.”

Herbert Schwartz sits in the courtyard of the Los Angeles Jewish Home in Reseda, California, on Tuesday, March 8, 2016.
Herbert Schwartz sits in the courtyard of the Los Angeles Jewish Home in Reseda, Calif. in March 2016 (Heidi de Marco/KHN)

In the meantime, people who need long-term care are depleting their savings or transferring their assets to others so they can qualify for Medicaid. Long-term care insurance rates are rising, and many seniors find they can no longer afford policies they purchased long ago.

In California, seniors typically can qualify for Medi-Cal if their yearly incomes are under $16,395. To get long-term care through Medi-Cal, they also must show a need for assistance with certain “activities of daily living,” such as dressing or bathing. Incomes can be higher if seniors can demonstrate medical need and have spent much of their savings, with some exemptions for homes and other assets.

About 21 percent of the state’s over-65 population is enrolled in Medi-Cal, according to the state Department of Health Care Services. Medi-Cal paid for long-term care for an estimated 716,000 people who are aged, blind or disabled in 2013, the most recent data available. In 2014, nearly a quarter of Medi-Cal’s dollars went to pay for long-term care — about $14.7 billion, according to the California Health Care Foundation. (California Healthline is an editorially independent publication of the California Health Care Foundation.)

When Nickerson, 85, realized a nursing home bed was too expensive, he sought guidance from an attorney, who helped him take his wife’s name off their home and take their assets out of her name. Then Nickerson applied for her to receive Medi-Cal, and he helped her move into a Turlock nursing home near the one where she once worked.

Now, Nickerson said he pays about $1,700 a month from her Social Security, and Medi-Cal picks up the rest of the tab, he said. Nickerson said his wife, now 84, is getting the care she needs, and he can’t imagine having her anywhere else.

“It is absolutely the best place for her,” he said. “She needs help 24 hours a day.”

If more middle-class Californians like the Nickersons seek help from Medi-Cal, however, the program could be overwhelmed and unable to help the people who need it most, said Joanne Handy, CEO of LeadingAge California, an advocacy group that represents nonprofit nursing homes.

“The pressure on the state Medicaid budget, not only here in California but across the country, is just going up, up, up,” she said. “If you put on top of that more and more what we call middle-income Californians spending down and then going onto Medi-Cal, it is just a crazy policy.”

Salo, of the National Association of Medicaid Directors, said people shouldn’t have to impoverish themselves to get financial help paying for long-term care, but states cannot afford to cover the care for everyone who needs it and are trying to come up with ways to control spending.

More than a dozen states, including California, are contracting with managed care companies to provide both medical care and long-term care services to their Medicaid beneficiaries. These services can range from nursing home care to at-home assistance with bathing, chores and transportation to medical appointments.

States are hoping that contracting with managed care plans will help save money, improve care and better coordinate services for seniors. But some health advocates say that managed care organizations — traditionally geared towards providing only medical care — aren’t necessarily prepared to offer other forms of care such as bathing or cooking and could end up restricting services or providers to save money.

California recoups some of what it spends on nursing homes and other services by collecting what it is owed from people’s estates.

“We can’t do both — serve as a payer of last resort and let people keep their assets,” said Jennifer Kent, head of the state’s Department of Health Care Services.

The state has been holding informational hearings in Sacramento this year to brainstorm about other ways to grapple with long-term care costs in California. “It all falls to Medicaid, and that is problematic,” said state Sen. Carol Liu (D-La Cañada Flintridge).

Several organizations, including the SCAN Foundation, the Urban Institute and the Bipartisan Policy Center, also have been working together to come up with possible solutions. These could include new insurance options that would take some burden off Medicaid.

About 1.4 million people are in nursing homes nationwide, and about 62 percent of those beds are paid for by Medicaid.

The percentage is even higher at the Los Angeles Jewish Home in the San Fernando Valley, where about 85 percent of the beds are paid for with Medi-Cal dollars. Some of the residents “exhaust every penny they have” to be able to afford the care, said CEO Molly Forrest.

Sitting in a courtyard at the nursing home, Josephine Rudolph, 99, said she gets help with dressing and bathing. Rudolph, who still loves to read, said Medi-Cal has paid for her to live at the home since 2005. Otherwise, she said, she couldn’t afford it.

Herb and Judie Schwartz, both in their 80s, also rely on Medi-Cal to live at the Jewish Home. Family photographs cover their walls. An oxygen tank and a walker sits in a corner. Just above the bed is an emergency tab that notifies the nurse’s station if the couple needs help.

They moved to the Jewish Home about four years ago after Herb Schwartz, a former computer program analyst, had a fall and it was no longer safe for the couple to live at home.

“I don’t know where we would have been without Medi-Cal,” said Judie Schwartz, a retired teacher. “We would have probably ended up with one of our kids. I love them but I can’t imagine having to live with them.”

This story was produced by Kaiser Health News, which publishes California Healthline, a service of the California Health Care Foundation.

Blue Shield of California Foundation helps fund KHN coverage in California, and The SCAN Foundation supports KHN’s coverage of aging and long-term care issues.

CMS extends ban on new home healthcare agencies in select markets

Published by Modern Healthcare
By Virgil Dickson
August 5, 2016

The CMS has extended a moratorium on new Medicare home-healthcare agencies and ambulance suppliers in some states. It's part of an ongoing effort to curb fraud.

The agency will extend the temporary ban for six months. It affects new Medicare Part B non-emergency ground ambulance suppliers in New Jersey, Pennsylvania and Texas. Home health agencies in Florida, Illinois, Michigan and Texas and their providers additionally are prohibited from enrolling in Medicaid and CHIP.

The CMS relied on law enforcement's experience with fraud as well as data analysis in determining how and where to impose the original moratoriums, which became effective July 31, 2013. The bans have been extended a number of times before.

The CMS is ending a moratorium on enrolling new Part B ground ambulance suppliers in several counties in Texas and Pennsylvania. Those providers can also now apply for Medicaid and Children's Health Insurance Plan reimbursement.

An “evaluation has shown that the primary risk to the program comes from the non-emergency ambulance supplier category,” the agency says in a notice, adding that it had affected care issues for emergency ambulance services in some areas.

Waivers to the moratorium allow for exceptions in areas where the ban would affect access to care.

Medicare’s Readmission Penalties Hit New High

Published by Kaiser Health News
By Jordan Rau
August 5, 2016

The federal government’s readmission penalties on hospitals will reach a new high as Medicare withholds more than half a billion dollars in payments over the next year, records released Tuesday show.

The government will punish more than half of the nation’s hospitals — a total of 2,597 — having more patients than expected return within a month. While that is about the same number penalized last year, the average penalty will increase by a fifth, according to a Kaiser Health News analysis.

The new penalties, which take effect in October, are based on the rehospitalization rate for patients with six common conditions. Since the Hospital Readmissions Reduction Program began in October 2012, national readmission rates have dropped as many hospitals pay more attention to how patients fare after their release.

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Medicare is penalizing hospitals that see patients return to the hospital too soon after being discharged. Medicare reduces what it pays each hospital per patient, per stay.

Medicare Readmission Penalties By Hospital (.csv)
Medicare Readmission Penalties By Hospital (.pdf)
The penalties are the subject of a prolonged debate about whether the government should consider the special challenges faced by hospitals that treat large numbers of low-income people. Those patients can have more trouble recuperating, sometimes because they can’t afford their medications or lack social support to follow physician instructions, such as reducing the amount of salt that heart failure patients consume. The Centers for Medicare & Medicaid Services says those hospitals should not be held to a different standard.

Medicare said the penalties are expected to total $528 million, about $108 million more than last year, because of changes in how readmissions are measured.

Medicare examined these conditions: heart attacks, heart failure, pneumonia, chronic lung disease, hip and knee replacements and — for the first time this year — coronary artery bypass graft surgery.

The fines are based on Medicare patients who left the hospital from July 2012 through June 2015. For each hospital, the government calculated how many readmissions it expected, given national rates and the health of each hospital’s patients. Hospitals with more unplanned readmissions than expected will receive a reduction in each Medicare case reimbursement for the upcoming fiscal year that runs from Oct. 1 through September 2017.

The payment cuts apply to all Medicare patients, not just those with one of the six conditions Medicare measured. The maximum reduction for any hospital is 3 percent, and it does not affect special Medicare payments for hospitals that treat large numbers of low-income patients or train residents. Forty-nine hospitals received the maximum fine. The average penalty was 0.73 percent of each Medicare payment, up from 0.61 percent last year and higher than in any other year, according to the KHN analysis.

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Under the Affordable Care Act, which created the penalties, a variety of hospitals are excluded, including those serving veterans, children and psychiatric patients. Maryland hospitals are exempted as well because Congress has given that state extra leeway in how it distributes Medicare money. Critical access hospitals, which Medicare also pays differently because they are the only hospitals in their areas, are also exempt.

As a result, more than 1,400 hospitals were automatically exempt from the penalties. Other hospitals did not have enough cases for Medicare to evaluate accurately and were not penalized. Of the hospitals that Medicare did evaluate, four out of five were penalized.

The KHN analysis found that 1,621 hospitals have been penalized in each of the five years of the program.

Kaiser Health News staff writer Sydney Lupkin contributed to this report.

Home Health Pre-Claim Review Starts Two Days Late

Published by Home Health Care News
By Tim Mullaney
August 5, 2016

Home health care agencies in Illinois should not submit pre-claim review requests for episodes of care that began prior to Aug. 3, 2016, the Centers for Medicare & Medicaid Services (CMS) announced Thursday.

The controversial pre-claim review demonstration was scheduled to begin on Aug. 1, but was delayed by two days “to allow time to resolve an administrative procedural requirement,” CMS stated in an announcement posted online and emailed to providers.

The short delay may seem minor, but considering that many home health agencies already are deeply concerned or outright opposed to the pre-claim review, this immediate wrinkle is likely to increase their apprehensions.

Industry leaders have pushed CMS to hit pause on the program, saying that the manpower needed to carry it out is lacking, and that providers could experience crippling problems if their payments are unduly delayed as a result of the review process.

But CMS has stood by its plans to roll out the program, under which providers in select states must submit their claims for review to Medicare Administrative Contractors (MACs), who will deem them proper or send them back to be resubmitted if problems are detected. CMS frames the demonstration as a way of getting a tighter handle on reimbursements in an industry riddled with improper documentation, fraud, and abuse; providers say it is not an effective way to root out problems and bad actors.

Illinois is the first state to begin participating. Florida is next in line to participate, starting no earlier than Oct. 1, 2016.

“The revised start date does not impact demonstration requirements or processes, and the demonstration will be operationalized as planned for episodes of care starting on or after August 3, 2016,” CMS stated. “CMS’ Medicare Administrative Contractors will work directly with any HHAs that submitted requests for episodes of care that began prior to August 3, 2016 and allow them to either have the requests withdrawn or processed as test requests.”