Policy discussions cement the move toward this trend
by Cara C. Bachenheimer
November 17, 2014

If you’ve been paying attention to health care policy discussions recently, you can’t help but notice the increased focus on how public and private payers can better utilize healthcare in the home. We know the demographic trends. Every day, 10,000 Americans turn 65 and become new Medicare beneficiaries. The 65-and-over population has increased 21 percent in the last 10 years and that number will grow at a faster rate in the next few decades. The 85-and-over population will grow from 6 million in 2012 to 14 million 2040. At the same time, mounting federal budget pressures will provide fewer dollars to support the rapidly expanding aging population. A convergence of trends is accelerating the rise in the number of people with multiple chronic conditions, a patient group that already makes up the fastest-growing segment of the Medicare beneficiary population, and the greatest users of post-acute care. All of these facts are finally being realized by policymakers, policy “recommenders,” think tanks and others. The goals of the 2009 health reform law, the Patient Protection and Affordable Care Act (ACA) were to extend coverage to an additional 34 million Americans and improve the quality of health care, while simultaneously cutting $143 billion from overall health care costs. This task is complicated by a rapidly aging population that disproportionately suffers from multiple chronic conditions. The ACA contains many provisions to achieve this goal by moving away from the current fee-for-service system, and attempts to incentivize care decisions that are the most appropriate regardless of provider and facility. A significant part of the ACA focuses on better managing chronically ill patients (the ACA added new coverage for chronic care coordination and preventative care to the three primary sources of health insurance—Medicare, Medicaid and private insurance). One of the ACA’s most significant new delivery models encouraging greater use of home health care is the law’s Independence at Home Program, a three-year demonstration that begin in 2012 and targets the highest-cost segment of the Medicare beneficiary population. It requires minimum savings of 5 percent and employs health care professionals to provide care to these beneficiaries in their homes and coordinate care across all treatment centers. The demonstration is designed to determine whether greater use of home health care can reduce costs by reducing hospitalizations, hospital readmissions, duplicative diagnostic and lab tests, and emergency room visits while improving outcomes commensurate with the beneficiary’s chronic conditions and achieving patient and caregiver satisfaction. Beneficiaries participating in the demonstration must have at least two specific high-cost chronic diseases, an inability to perform two or more activities of daily living without assistance, and have used high-cost Medicare services in the past 12 months. The program is based on the physician/nurse practitioner house call model, which has been operating for decades at many locations across the country, notably the Veterans Affairs’ Home-Based Primary Care program, which has reduced overall costs by 24 percent. Most are familiar with another ACA initiative: accountable care organizations (ACOs), which also aims to provide Medicare beneficiaries better coordinated care that focuses on the right care at the right time in the right location. There are numerous other models being tested by CMS, all under the new “Innovation Center” authority created by the ACA. A more recent and important initiative was signed into law in early October. The Improving Medicare Post-Acute Care Transformation Act (IMPACT Act) creates a pathway for the Medicare program to establish a site-neutral payment system that would ensure the beneficiary receives post-acute care in the most clinically efficacious, cost-effective and patient-preferred place—the home, skilled nursing facilities, inpatient rehab facilities or long-term care hospitals. The new law requires CMS to develop standardized data collection tools that these post-acute care (PAC) providers will use to report patient assessment and claim data, and to establish quality measures that these providers would also be required to report on, including major falls, skin integrity and patient preference. After the data is collected, MedPAC (Medicare payment advisory committee) will develop detailed recommendations for Congress regarding a new post-acute care uniform payment system based on patient characteristics instead of the setting where the patient is treated. The MedPAC report is due to Congress June 30, 2016. Clearly the handwriting is on the wall. Policy makers have realized that the traditional fragmented and uncoordinated system of post-acute care cannot be sustained for the growing senior population, and home health care is a central component of the solution. With all these upcoming changes, the challenges for the HME industry are how we insert our critical role into the post-acute care mix and demonstrate value, and how we align and integrate our services with those of these providers of post-acute care services.