MedPAC says it’s too early to tell impact of IPS on beneficiary access
By MATTHEW HAY
HHBR Washington Correspondent
WASHINGTON The Medicare Payment Advisory Commission (MedPAC) issued its June 1999 Report to Congress last week that included both good news and bad news for the home care industry. In short, MedPAC concluded that the jury is still out over whether beneficiary access has been impaired by the interim payment system (IPS) for home healthcare. And home care advocates say that conclusion does nothing to bring further relief to the industry.
At a press briefing at the National Press Club in Washington June 2, MedPAC Chairperson Gail Wilensky said the Medicare home health benefit is "a big political issue" that requires further analysis to effectively gauge the impact of changes imposed by the Balanced Budget Act of 1997 (BBA). Wilensky appeared to soften in her view of how the BBA has affected the U.S. healthcare delivery system, as well as to what extent corrective measures may be required.
While Wilensky said that MedPAC is still trying to determine the impact of the BBA, she added that the assessment is more difficult because of poor data. She said there does appear to be a reduction in the number of home health agencies, the number of beneficiaries served, and services received by those patients, as stated in MedPAC’s report. Wilensky added that it is difficult to determine if the changes have been good or bad without clinical information on both the patient population and the services provided to them.
In addition to finding fewer agencies, visits, and services, MedPAC stated that "some agencies report that they are no longer accepting or are likely to discharge earlier certain types of patients." MedPAC reported that providers say "some beneficiaries are having more difficulty obtaining services to which they believe they are entitled under Medicare’s benefit."
But the commission concluded that it cannot yet determine to what extent the payment system caused these trends because concurrent policy changes and other factors have also contributed to the changes. The commission maintained that a lack of clinically based standards for home healthcare make it impossible to assess the degree to which these changes are appropriate.
According to Wilensky, the Health Care Financing Administration (HCFA; Baltimore) has had "a data problem," but she predicted the agency will have better data within the next six months.
According to MedPAC, other factors that may explain decreases in use include antifraud initiatives targeting home healthcare, the removal of venipuncture as a qualifying service for home health eligibility, more stringent Medicare claims review and sequential billing policies, and market forces affecting the supply of home health agency employees. The commission added that agencies might be modifying their behavior in anticipation of a prospective payment system (PPS).
Wilensky also qualified the reduction in the overall number of home health agencies over the past year by pointing out the "enormous growth" the industry experienced in the years prior to that decline. "A reduction in the base is not necessarily a bad thing," she said. "After all, the average 31% increase for a decade was extraordinary."
According to MedPAC, Medicare payments for home health services rose from roughly $2 billion in 1988 to $17 billion in 1998. During the same period, annual visits increased from 23 to 79. "While payments per visit remained relatively stable during this period increasing less than 2% annually payments per user increased about 18% annually."
MedPAC recommends changes
"It is impossible to determine the degree to which the changes in use of home health services that have occurred in the past two years are appropriate," MedPAC concluded, in part because Medicare’s standards for eligibility and coverage are "too loosely defined." In order to remedy these problems, MedPAC recommended the following legislative and regulatory changes:
• That Health and Human Services (Washington) Secretary Donna Shalala "speed the development of regulations that outline home healthcare coverage and eligibility criteria based on clinical characteristics of beneficiaries" and propose legislation to implement these regulations. MedPAC pointed out that current Medicare policy merely requires patients to be homebound, according to a recently issued HCFA report. While that report did not recommend adopting a new definition, the commission argued that separate standards should be developed for patients with chronic care needs and those with acute care needs.
"Once HCFA establishes clinically-based coverage standards for use of home health services," MedPAC said, "the agency also should use these standards to monitor access to home healthcare and appropriate use of services."
• That HCFA "explore the feasibility of establishing a process for agencies to exclude a small share of their patients from the aggregate per-beneficiary limits," if Congress is not confident that HCFA can implement a PPS for home health services by 2000. The commission said that prior to implementation of a PPS, an exclusion policy for "very expensive patients" could be implemented. MedPAC suggested that agencies be allowed to exclude a small portion of their patients from the aggregate per-beneficiary payment limits to ensure that these beneficiaries will have access to needed services. MedPAC added that Medicare could reimburse care for these excluded patients based on the lesser of actual costs or the aggregate per-visit limits.
• That HCFA establish a nationally uniform process to ensure that fiscal intermediaries (FI) have the training and ability to provide timely and accurate coverage and payment information to home health agencies. The commission said that by the time some FIs notified agencies of their payment limits under IPS, many agencies were well into their FY98 cost-reporting periods.
• And that HCFA improve the Medicare fee-for-service appeals process for beneficiaries that use home healthcare, as well as mechanisms that inform them about their rights to appeal determinations on non-coverage.
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