Why CMS Needs to Increase Reimbursement for Home Health Care

August 19, 2014

Here are two key areas where CMS could make adjustments to home health regulations that would benefit not just home health, but the industry in general.

On July 7, CMS published proposed changes to the Medicare Home Health Prospective Payment System. Most notably, it modified the need for the provider to document a narrative on the face-to-face form, instead allowing a simple diagnosis and supporting documentation in the SOAP notes.

It was a disappointing revision to say the least. Over the last 10 years, and particularly the last three, CMS and the Office of Inspector General have turned an almost blind eye to the way their inaction disproportionately affects the home health sector of healthcare.

What is more troubling is that it directly hurts a key initiative for reining in healthcare costs: keeping patients out of the hospital by moving more services into the home or assisted living facility. 

Here are two key areas (to start) where CMS could make adjustments to home health regulations that would benefit not just home health, but the industry in general:

1. Increased and diversified reimbursement. Although it may seem counterintuitive when discussing healthcare spending reductions, increasing reimbursement for home-based visits would help in the long run. Immediately, it would solve a historic problem in the house-call space: upcoding, or variations of upcoding.

These providers are working with some of the most complicated patients currently in the system many are elderly, frail, with three or more chronic conditions. The reimbursement should be more in line with that level of care.

Additionally, there should be expanded reimbursement coverage for telehealth, travel options, and social worker resources. These tools fall outside of the direct patient-provider relationship, but are effective in managing this difficult population and getting in front of hospital readmissions. 

Reimbursement should also be revised to properly compensate physicians for supervising/collaborating work for reasons we’ll discuss below.

2. Greater autonomy for physician extenders. Not requiring a narrative for the initial face-to-face certification is helpful, but not as helpful as allowing a nurse practitioner or physician assistant to certify the patient.  Currently, the nonphysician provider can fill out the face-to-face form, but the supervising physician has to execute the certification.

With the oncoming physician shortage, it makes zero sense to have faith in the ability of a nonphysician provider to assess a patient in his home, but not certify those observations.