National Expansion of Home Health Value-Based Purchasing Model Estimated to Create $6.3B in Savings

In somewhat of a surprise move, U.S. health care policymakers unveiled plans last week to expand the Home Health Value-Based Purchasing (HHVBP) Model, a nine-state Medicare demonstration designed to better align reimbursement to quality of care.

Despite backing from most of the home health industry, the HHVBP Model — first implemented in 2016 — had seemingly hit a speedbump in recent years. Apart from a handful of minor modifications, the model only remained active in Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska and Tennessee.

With more than one-quarter of its home health agencies currently located in HHVBP states, the Baton Rouge, Louisiana-based Amedisys Inc. (Nasdaq: AMED) has been among the biggest supporters of value-based purchasing. The company has persistently urged the Center for Medicare & Medicaid Innovation (CMMI) to expand the model for over a year.

“There’s still a perception out there that there is a high level of fraud in home health care — and that’s simply not true,” Amedisys CEO and President Paul Kusserow told Home Health Care News. “I think having to prove ourselves on the quality front and being willing to take risk on quality is absolutely the right thing for us.”

So far, even just the limited HHVBP Model has been able to achieve overwhelmingly positive results.

Since implemented, the model has contributed to a 4.6% improvement in home health agencies’ quality scores, in addition to average annual Medicare savings of $141 million, federal statistics show. On top of those points, agencies in HHVBP states have been able to significantly lower the costly utilization of hospitals and skilled nursing facilities (SNF).

“This has been extremely good,” Kusserow said.

As part of its push for an expanded HHVBP Model, Amedisys brought in Washington, D.C.-based research and consulting firm The Moran Company. The home health giant asked Moran to dig deeper into past results and explore what a nationwide rollout would eventually look like.

After cranking the numbers, the research firm estimated that a 50-state HHVBP Model would result in about $6.3 billion in savings over a 10-year period, using Congressional Budget Office (CBO) scoring methodology.

“We engaged in a very long dialogue [with CMMI] and exchanged a lot of data to push this forward,” Kusserow added.

Inside the advocacy process

Besides the whopping $6.3 billion in savings, Moran also determined that a nationwide rollout of the Home Health Value-Based Purchasing Model would lead to better post-acute care outcomes for Medicare beneficiaries and more ways for the U.S. Centers for Medicare & Medicaid Services (CMS) to identify high- and low-quality providers.

In many ways, the advocacy efforts around HHVBP were so effective because they were driven by “the power of a good idea,” according to David Kemmerly, the chief legal and government affairs officer at Amedisys. Instead of having to artfully persuade CMS and CMMI to expand the model, his team’s job was more about giving policymakers the objective information they otherwise lacked.

“They have to go make their case with the actuaries before they can expand something,” Kemmerly told HHCN. “So we helped arm CMS with the data and information they needed.”

It took more than facts and figures, however.

To help advance HHVBP, Kusserow communicated regularly with CMMI Director Brad Smith, the former CEO of home-based palliative care provider Aspire Health who joined the CMS Innovation Center in early 2020. Kusserow and Smith had already “known each other a long time,” thanks to their shared experiences in Nashville, Tennessee, and standing as Rhodes scholars.

“When [Smith] went to Washington, he called me up and said, ‘What should I be thinking about?’” Kusserow said. “Obviously, he was asking a lot of people that. I said, ‘I really think there’s something to value-based purchasing in home health. I’d really like you to look at it.’”

At first, CMMI decision-makers were concerned about home health provider buy-in.

While Amedisys and others sought to advance HHVBP, others were slightly skeptical, especially early on. More than a few home health operators believed HHVBP was just another piece of government regulation, with others too preoccupied with the Patient-Driven Groupings Model (PDGM) to worry about alternative payment mechanisms.

On its end, Amedisys worked hard to boost the industry’s understanding and acceptance of HHVBP, Kemmerly said.

“There’s a bit of politics involved,” he noted. “[Smith] asked us early on, ‘Where is the industry on this? And can you bring the industry to the table?’”

Unanswered questions

CMMI and CMS are committed to expanding the Home Health Value-Based Purchasing Model, but there are plenty of questions left to answer and improvements that can be made.

On a basic level, it’s still unclear whether policymakers will try to expand HHVBP through a standalone proposal or through the annual rulemaking cycle. Additionally, it’s not yet known whether that future expansion will be national or more incremental, possibly adding another dozen or so states to the current nine-state mix.

Scott Levy, the senior vice president of government affairs at Amedisys, was in the trenches for most of Amedisys’ advocacy battle on HHVBP. In all likelihood, CMS will pursue a 50-state expansion and implementation through the annual rulemaking cycle, Levy speculated.

“I’m just merely reading between the lines, but our discussions [with CMS] and our data presented to them was all based on the idea of a nationwide expansion,” he told HHCN.

Along with answers to those questions, Amedisys is also pushing for improvements to the HHVBP Model itself.

In 2020, home health providers were exposed to 6% upside and downside risk, depending on their quality performance. That figure increases to 7% and 8% in 2021 and 2022, respectively.

But it’s almost impossible to come close to that full upside or downside as the model is currently structured.

“The upside has been good for us. It’s generally quite positive,” Kusserow said. “But we feel the curve is too clustered toward the center. It is very hard to get the full rewards or to get the full penalties.”

In 2018, the payment adjustment in HHVBP ranged from a 1.5% penalty for providers in the lowest-10th percentile to a 1.5% bonus for providers in the highest-10th percentile, according to an investment note from Bank of America. CMS previously stated that the average adjustment was a 0.85% bump in 2018.

“Companies out there with good technology, good tracking systems, good checklists, good verification processes and very good clinical operations are the ones that are going to continue to do well and thrive under this, for sure,” Kusserow said.

A possible complication to HHVBP expansion plans could have been the transition to a new Biden administration, which is guaranteed to bring changes to CMMI, CMS and throughout the U.S. Department of Health and Human Services (HHS).

Yet the team at Amedisys doesn’t see that as an issue, considering the model’s origins.

“[HHVBP] was actually rolled out by the Obama administration,” Levy said. “It was proposed during the fall of 2015 for a January 2016 implementation.”

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New analysis finds stark difference in coverage of breast cancer medicines for seniors in the United States and England

In the United States, seniors and people with disabilities enjoy broad coverage of physician-administered medicines under Medicare Part B because the program relies on market competition to balance access, innovation and cost control. But the same cannot be said for patients in other countries. In fact, a new analysis from Avalere underscores the dangers of the Most Favored Nation (MFN) rule and other foreign reference pricing proposals.

CMS Announces New Direct-Contracting Model to Promote ‘Easier Access to Home Care’

In April 2019, federal health care officials unveiled a new direct-contracting payment model to accelerate the shift toward value-based care for U.S. primary care providers.

The goal of that model — which has 51 entities already signed up — was to bring a private-sector approach to risk-sharing arrangements in traditional Medicare.

The U.S. Centers for Medicare & Medicaid Services (CMS) — along with the Center for Medicare & Medicaid Innovation (CMMI) — is now adding to its direct-contracting portfolio while also shining a light on home care.

CMS announced on Thursday that it’s launching the “Geographic Direct-Contracting Model,” another new, voluntary direct-contracting pathway designed to pay health care providers for the quality of their care and ability to cut costs.

The launch shouldn’t come as a surprise to those who have been listening to CMS Administrator Seema Verma or CMMI Director Brad Smith over the past couple of months. Even with immediate coronavirus-related challenges within the health care system, both underscored the government’s commitment to value-based care during an October virtual presentation. 

“The Geographic Direct-Contracting Model is part of the Innovation Center’s suite of Direct-Contracting models and is one of the Center’s largest bets to date on value-based care,” Smith said in a statement from Thursday’s announcement. “The model offers participants enhanced flexibilities and tools to improve care for Medicare beneficiaries across an entire region while giving beneficiaries enhanced benefits and the possibility of lower out-of-pocket costs.”

By initially testing the new direct-contracting model in a small number of geographies, CMS and CMMI will be able to thoughtfully learn how emerging flexibilities are able to impact quality and costs, he added.

Under the model, participants will take upside and downside responsibility for Medicare beneficiaries’ health outcomes, giving them a direct incentive to improve care in their given markets.

Within each geographic region, participants with experience in risk-sharing arrangements and population health will partner with health care providers and community organizations to better coordinate care.

“The need to strengthen the Medicare program by moving to a system that aligns financial incentives to pay for keeping people healthy has long been a priority,” Verma said in a statement. “This model allows participating entities to build integrated relationships with health care providers and invest in population health in a region to better coordinate care, improve quality and lower the cost of care for Medicare beneficiaries in a community.”

Medicare beneficiaries in the model will remain in traditional Medicare, maintaining all of their benefits and coverage rights.

Organizations that participate in the new Geographic Direct-Contracting Model may create “a network of preferred providers, armed with the model’s enhanced flexibilities to provide the right care for beneficiaries at a lower cost,” according to CMS. That will certainly include home-based care businesses, many of which go by the mantra of delivering “the right level of care at the right time.”

Additionally, participants and preferred providers may choose to enter into alternative payment arrangements, including prospective capitation and other value-based arrangements.

In other words, home-based care providers may have a new runway to take off into value-based care.

“Beneficiaries may also receive enhanced benefits, including additional telehealth services, easier access to home care, access to skilled nursing care without having to stay in a hospital for three days, and concurrent hospice and curative care,” CMS noted in its announcement.

The Geographic Direct Contracting Model will have two three-year performance periods.

The first performance period will take applications in 2021 and have a performance period from Jan. 1, 2022, through Dec. 31, 2024. The second performance period will take applications in 2024 and have a performance period from Jan. 1, 2025, through December 31, 2027.

CMMI expects to release a request for applications for the first performance period in January.

The agency has already identified 15 “candidate regions” for the new model, each of which contains between roughly 150,000 to 700,00 Medicare beneficiaries. Those regions include major metropolitan such as Philadelphia and Pittsburgh in the eastern to U.S., to San Diego and Los Angeles in the West.

More information on the new model is available here.

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No matter how you look at it, the Most Favored Nation rule is bad policy

Last month, the administration released the “Most Favored Nation” (MFN) rule, which allows foreign governments to decide the value of Part B medicines, while also likely limiting seniors’ access to existing medicines and discouraging investments in future treatments and cures. No matter how you look at it, the MFN rule is bad policy. 

Home Health Value-Based Purchasing Model Set for Nationwide Expansion in ‘Next Year or So’

The Center for Medicare & Medicaid Innovation (CMMI) is in need of a “course correction,” top U.S. health care officials believe.

And part of that may include a national expansion of the Home Health Value-Based Purchasing Model.

Created under the Affordable Care Act, CMMI — also known as the CMS Innovation Center — supports the development and testing of innovative health care payment models. Since its formation, CMMI has developed at least 54 payment models, including the Home Health Value-Based Purchasing Model.

As U.S. health care costs continue to rise, CMMI’s work has grown increasingly important, especially around value-based care, according to Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma. National health care spending is expected to grow at an average annual rate of 5.4% from 2019 to 2028, outpacing the gross domestic product’s average annual growth rate of 4.3%.

But of those 54 payment models, only a handful appear to be working.

In fact, just five have shown statistically significant savings.

“In 2019 alone, over 450,000 providers participated [in those models], serving over 26 million patients,” Verma noted. “But more recently, the evaluation data for the early models have been completed. And unfortunately, the results are deeply concerning.”

Verma addressed CMMI’s progress and the future of value-based care on Tuesday during a virtual event hosted by CMS’s Health Care Payment Learning & Action Network (LAN). Verma was joined by Brad Smith, who co-founded and served as CEO of home-based palliative care provider Aspire Health before being named CMMI’s director in January.

“The Center stands in need of a course correction in model design and portfolio selection, if value-based care is to advance,” Verma said.

Providers ‘must have skin in the game’

Shifting the U.S. health care system toward value-based care is one of CMS’s many priorities, Verma remarked during the virtual event. In addition to payment, value-based care also means providing pricing transparency, strengthening interoperability and minimizing paperwork burden for providers.

When it comes to establishing more successful value-based payment models, CMMI needs to prioritize two pillars, Verma said.

First, it must step back from voluntary models “designed with an abundance of financial carrots to attract participation.”

“Models must incorporate design elements that require participants to have skin in the game,” Verma said. “Models where providers have downside risks have actually performed better.”

Secondly, CMMI needs to do a better job of developing effective, meaningful benchmarks to measure the success of value-based payment models.

Smith echoed that idea, pointing out that CMS and CMMI have been too generous or lenient in judging how new payment mechanisms are performing.

“CMMI has learned a tremendous amount over the past 10 years about value-based care arrangements, and we are grateful for the tremendous participation we have had to date in our models,” Smith said at the LAN event. “As we move into the next phase of the Innovation Center, we believe we must push even harder to move more providers into value-based care payment arrangements.”

Expanding the Value-Based Purchasing Model

While most of Tuesday’s remarks took a hard look at what CMMI has accomplished thus far, both Verma and Smith did point out several positives.

Smith, for instance, called out the Home Health Value-Based Purchasing Model as one of the Innovation Center’s most successful efforts.

Implemented in 2016, the Value-Based Purchasing Model was designed to pay home health providers in nine states based on outcomes and the value of services delivered. This year was the sixth year of CMMI testing out the model, exposing home health providers to 6% upside or downside risk based on their performance.

Home health providers in participating states have mostly supported the value-base model, with many calling for a national expansion beyond the current states of Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee and Washington.

CMMI hasn’t hinted it has any plans to do so — until now.

“As we look at our portfolio, we have other models that we believe may be able to expand in the coming years,” Smith said. “For example, our Home Health Value-Based Purchasing Model has shown significant cost savings and improvement on key quality metrics. It’s one of the examples of the models that we’re looking at to think about if we could expand it nationally in the next year or so.”

Besides the Value-Based Purchasing Model, Verma and Smith likewise pointed to the relatively new Primary Cares Initiative and the related direct-contracting model as impactful value-based care efforts.

“Last year, we announced the CMS Primary Cares Initiative, featuring the direct contracting model, which has the potential to drive quality and value across the entire system in a way that we’ve never seen before,” Verma said. “Going forward, we believe direct contracting can take an exciting new step with a geographic option, in which a set of entities would take on full risk for all eligible Medicare beneficiaries in a certain region.”

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