MedPAC: End Free Ride for Home Health

Medicare beneficiaries who receive home health services face hefty copays in the near future if Congress takes up a recent recommendation from its own advisory committee. A transcript prepared by Medicare Payment Advisory Commission (MedPAC) staff recommends cost sharing to resolve regional variations in spending and use among Medicare services, particularly among post-acute services, identified in the committee’s January 2011 report to Congress.

Elaborating on its January 2011 “Report to the Congress: Regional Variation in Medicare Service Use,” the MedPAC transcript points out that home health services in particular cost taxpayers approximately $19 billion for 3 million beneficiaries to receive 6 million episodes; and home health agencies (HHAs) continue to grow, with more than 3,800 new agencies established since 2000. Many of these new agencies are located in areas of high risk for Medicare fraud and abuse.

The Patient Protection and Affordable Care Act of 2010 (PPACA) granted the Centers for Medicare & Medicaid Services (CMS) new authorities to address fraud and abuse in high-risk areas, such as putting a moratorium on new provider enrollment and payment suspension if deemed necessary. The PPACA also provides phased-in rebasing to the existing payment system under which home health services are paid, which CMS is supposed to implement beginning 2014.

For some time now, however, MedPAC analysis has indicated a need for a revised payment system, to include some cost sharing by beneficiaries. Home health visits from nurses and other providers are free of charge to Medicare beneficiaries.

“At the extreme, this benefit can turn into a long-term care social support system,” MedPAC Chairman Glenn Hackbarth said. “A modest copayment is one tool to help deal with that problem.” (FierceHealthcare)

Commissioners say a copay would encourage beneficiaries to assess the need for home health services and drive down demand. A revised system also would eliminate financial incentives for physicians to provide more therapy than necessary, they say.

MedPAC is now recommending a fixed per-episode copay of $150 for community-admitted episodes. Low-use episodes and Medicare/Medicaid dual eligibles would be excluded from this requirement.

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