Looming Concerns for Home Care & Hospice

In this article, I wanted to tie into what contributor Matthew Albright was recently talking about relative to what’s going on in home and community-based service in Medicaid – specifically, with what may ultimately wind up as a battle over the definition of what represents a “cut.”

The U.S. House of Representatives is looking at various options for over $800 billion of funding decreases in the Medicaid program, while President Trump says he would not support any Medicaid cuts.

The word “cut” may have a variety of definitions that may surface from time to time, in order to serve the political will. The concern in Medicaid home care is that the home and community-based services program is the largest long-term care program in the world and is the largest spending part of Medicaid services.

In recent years, we’ve made a lot of progress in improving Medicaid payment rates for the purposes of fairly compensating the direct care workforce. They have the hardest job in health care, and it is an essential service for individuals with disabilities and those with advanced aging.

Direct care worker compensation must be increased to a fair level just to bring the staff to a point of availability for access to care. So, all eyes in home care are on these potential risks to Medicaid that are out there. I agree with Matthew very much. We do not know where it will all end up, but we do know that Medicaid is certainly in the crosshairs.

Now, let us segue over to hospice. Hospice is a growing Medicare benefit, and it is an essential option for individuals at the end of life. However, it is fraying a bit at the edges, leading to Congress requiring more intensified oversight, particularly on quality of care. One element of the oversight is known as the Special Focus Program, which is comparable to what is already in Skilled Nursing Facilities (SNFs) and in home health services.

The Centers for Medicare & Medicaid Services (CMS) came up with a formula to identify the worst providers of services in hospice, using an algorithm that takes certain data sources to calculate the bottom 10 percent in provider performance, and then selecting 50 examples from that bottom 10 percent. Unfortunately, the algorithm is just fatally flawed.

As a result, a lawsuit has been filed in the Southern District of Texas, the Houston area, challenging the application of that algorithm to the selection of providers of services. The lawsuit has a pending Temporary Restraining Order (TRO) request initiated by a combination of plaintiffs that include association representatives as well as hospices from different parts of the country.

Following the TRO request, the new administration took a step that everybody had hoped for by withdrawing the publication of the 50 identified targets for this initial intensified survey process and all instructions regarding implementation of the Special Focus Program. But that’s just for now.

The government followed that action with a response to the Court arguing that the TRO request is moot. If the Court agrees, the case still presents a series of claims that must be decided, including the validity of the algorithm, as it is still the approved SFP process in formal regulations.  As such, the Court will have to address the merits as to whether this algorithm is an invalid, illegal interpretation and application of the law passed by Congress in 2020. So, stay tuned.

And then, finally, in the home health arena, I would suggest readers look at a couple of things that have just recently developed. One is the recent Kaiser Family Foundation (KFF) report on the use of prior authorization in Medicare Advantage (MA). KFF found that most prior authorization is focused on post-acute care.

The Kaiser report also notes a high incidence of claim rejections upon prior authorization, with a fairly high reversal rate when appeals are made. Combine that report with a decision from the federal court in Minnesota, where the court ruled on a lawsuit that was pending against UnitedHealthcare, arguing that artificial intelligence (AI)-based decision-making is invalid, illegal, and in violation of the contract between providers within the UnitedHealth Group network.

While the court did dismiss three of the five claims that were brought, it maintained that two others are based in contract law. The case will now proceed with those two contract claims. Congress is also very interested in AI and prior authorization within Medicare Advantage.

This is the new era of what the Recovery Audit Contractors (RACs) did in the past, so we should expect lots of action in the coming days on these new methods of oversight.  I appreciate the opportunity to spend some time with this great RACmonitor and Monitor Mondays team again, and I look forward to further opportunities down the line.