Home Health Billing Alert: CMS Calls for Comments on Home Health Aide Utilization

Home health aide visits have been plummeting in recent years, and the Centers for Medicare & Medicaid Services (CMS) has issued a request for information to understand what might be happening. 

Here is a look at the request and what it could mean for any organization interested in home health billing [1].

How Home Health Aide Use Factors into Home Health Care Billing

Home health aide services are part of case-mix adjustment. After a practitioner prescribes home health for a patient, the Home Health Agency Center (HHA) is tasked with assessing the patient condition, along with determining elements like therapy, skilled nursing care, medical social services, and also the need for home health aide services. This happens at the beginning of the 60-day certification period and must be done for every subsequent 60-day certification, something that directly intersects with home health billing guidelines.

The case-mix adjustment to the national 30-day payment rate is determined using certain OASIS items describing the patient condition, along with other information that’s reported on Medicare home health care billing claims including:

• Admission source
• Clinical grouping
• Timing of the 30-day period
• Comorbidity adjustment

Between the years of 1998 to 2019, Medicare-covered home health aide visits fell by 90%. For years, the Center for Medicare Advocacy worked to make sure Medicare beneficiaries were able to receive Medicare-covered home health, including the use of aide services. So, in 2022, they filed a lawsuit, representing Medicare beneficiaries who rely on the services of aides to live safely – a number of disabled and older people that’s estimated to be in the tens of thousands [2]. 

The suit argues that while Medicare law allowed coverage of up to 35 hours a week of services from home health aides for hands-on, personal care, patients have struggled to access anywhere close to this, something that results in serious impacts to their health. But many see the problem as starting with the agency itself, including leadership at the National Association for Home Care & Hospice (NAHC). 

An earlier class action lawsuit was filed in 1987 on behalf of NAHC and home care patients. The successful suit resulted in Congress modifying the law to essentially codify the outcome of the lawsuit. This meant individuals would be able to qualify for 28 to 35 hours each week for home health. During this time, home health aides were a leading service, beating out even nursing care. But two things changed this dynamic. The Balanced Budget Act of 1997 cut blood draws from benefits that qualified someone for the home health aide benefit. Second, a change in home health billing also contributed to the shift through the Interim Payment System.

The Interim Payment system was established to change how Medicare reimbursed home health care billing for services. It moved from paying based on costs incurred to a prospective payment system. This meant a shift to fixed payments for agencies based on the condition of the patient and the services they need as opposed to cost of care. The result was that within 18 months, 40% of home health agencies shut down and the volume of patients receiving services through the Medicare program dropped from 3.5 million to 2.1 million. Overall, this decreased provider willingness to service patients that needed high levels of services from home health aides since there was now a cap on the level of reimbursement they could receive. 

When the Prospective Payment System was introduced in 2000, it was at a time where home health aide services were already decreasing. The episode of payment for these services is about $2,000 for 30 days. An additional 30 days of services from home health aides comes to between $3,000 and $4,000 according to NAHC President, Bill Dombi, who says this would leave an agency getting paid $2,000 to provide $5,000 to $6,000 of care.

CMS received almost 100 comments on the issue. They all had a similar theme, saying that the decline in use does not reflect a decline in need for the services. Some commenters noted that even though Medicare laws allow for a large number of hours, the provision is falling off – something that affects patients who need a mix of skilled and aide services to maintain their best health and safety. Vince Moffitt, President and CEO of Basin Health Companies explains, “We’ve always provided home health aide services to clients, however, due to a reduction in reimbursement rates over the years, these services have been something that we have had to limit. It boils down to decreased reimbursement rates. Our operational costs continue to increase and our episodic payments can’t support extra services.”

Providers who are concerned with the future impact on home health billing should keep an eye on CMS and how they respond to future input on the topic. They should also work to ensure they’ve explored every possible outcome in home health care billing and outsourcing to ensure fiscal health in an uncertain future.