From the time the Home Health Prospective Payment System (HHPPS) began in October, 2000, through the end of 2007, the latest period for which figures are available, Medicare’s average hospital expenditures for beneficiaries who eventually receive post-acute home care services decreased 18%, largely due to an average length-of-stay decrease. During the same time period, hospital stays grew .7 days (30%) shorter on average, from 2.26 days to 1.56 days.
Can the availability of home care services be credited for physician decisions to discharge early from an acute care setting? It depends upon whom you ask. The information above comes from an annual report by the government contractor that helped CMS create the case-mix adjustment system that drives PPS, Abt Associates. Report authors make no statement regarding any possible cause and effect relationship between decreased hospital expenditures for patients discharged to home care.
We interviewed the Abt Associates statistician and researcher who led the team that produced the report. While he provided some valuable background information to help us understand the report’s meaning, he preferred not to be directly quoted in this article.
“Analysis of 2006-2007 Home Health Case-mix Change” was released on August 20, updating last year’s findings with data through 2007. Comparisons are made between latest available OASIS assessments to FY2000 assessments but they are also made between new assessments and calculations of what 1999 assessments may have looked like had PPS been in effect then.
Financial impact
That 18% reduction in Medicare hospital expenditures translates to $1,410 per patient, the report states, still measuring only patients who received home care services after their hospital stay. During the same stretch of time, from the onset of PPS through the end of 2007, the overall observed home care case-mix, the primary number upon which payments to home care providers are calculated, increased by 15.03%.
Though the Abt report did not translate that 15.03% into dollars, it is possible to extrapolate it to approximately $200 per payment episode, using CMS’s average episode payment figures. Does this mean that spending $200 more on home care saves $1,410 in hospital payments? Again, it depends upon whom you ask. Writers of the report are not prepared to make that leap.
The purpose of the report is to explain the need to adjust HHPPS pay rates from year to year in order to help the Medicare Payment Advisory Council (MedPAC) keep total Medicare costs for home care within the boundaries established by Congress. As the average episode HHRG rises, the rate paid for each HHRG has to be lower.
Assumptions
Abt states in its report that nearly 89% of case-mix change that occurred between the baseline period (2000 or the reconstituted 1999 baseline) and 2006 is due to agency coding practices rather than what the report calls “real” change, meaning actual patient condition. For 2007, just over 90% of the change from baseline was deemed to be coding-related rather than real.
Report writers reached the real-vs-upcoding conclusion by predicting what OASIS assessments, HHRGs and case-mix weights should have been, all else being equal. To do this, they had to assume that all else was actually equal. By looking at hospital lengths of stay for patients who eventually received home care services, they were able to support the assumption that patients leave hospitals healthier in 2007 than they did in 2000, since they required fewer days of hospital care.
Where is therapy?
Claims data was not considered in the report’s analysis except for one type of episode. “In preparing the file, we corrected the HHRG and its associated case-mix relative weight in situations where claims-based information on therapy visits during the episode was inconsistent with the HHRG on the claim.” Presumably, this refers to CMS’s former practice (until 2008) of having its Regional Home Health Intermediaries automatically downcode the HHRG when the 10 therapy visit was predicted by not met but not upcoding it when the threshold was met but not predicted.
Other than this explanation, the implied incentive for an agency to reach the threshold during an episode is not considered as a case-mix creep factor, in spite of the fact that therapy services could account for the entire 15% increase. In other words, is CMS actually seeing unjustified, across-the-board coding inflation or are “This is ‘service creep, not assessment creep,’” . The basis of the report is that providers are “finding” payment items to the extent that payments have increased 15%. Look at all the tables of data showing specific assessment data. I could find no mention of therapy in all of that. And that is the easiest way to double payment before 2008. Back out therapy and the number will go down.
Patient condition upon discharge to home
It will take us more than the time we have had so far to fully analyze this year’s case-mix report from Abt Associates, especially to determine its impact on automated OASIS corrections and logic algorithms found in today’s clinical point-of-care software applications. Until then, a few “first glance” observations regarding where patients have been before coming home are worth mentioning.
Comparing 2007 to the Abt baseline year, 1999, in the 14 days prior to beginning a Medicare home health episode, beneficiaries spent, on average:
- 31% fewer days in acute care hospitals
- 6.19% more days in a Medicare Skilled Nursing facility
- 10.63% more days in a Long Term Care facility
- 28.43% fewer days in a Rehabilitation facility
In addition, 16.04% more patients came to home care after having spent no days in any type of care facility within the previous 14 days. Lastly, it is significant what can be learned about average patient condition at the point of home care start of care. Abt measured this in terms of minor to extreme mortality risk, again comparing 2007 to 1999.
- 4.45% fewer arrive with Mortality Risk Level 1 (minor)
- 10.57% fewer arrive with Mortality Risk Level 2 (moderate)
- 14.09% more arrive with Mortality Risk Level 3 (major)
- 77.46% more arrive with Mortality Risk Level 4 (extreme)
Reading the entire report will help home care owners and administrators understand the thinking of MedPAC, CMS and Congress when each year’s PPS pay rates are released. The Abt report, “Analysis of 2006-2007 Home Health Case-mix Change,” is available for download from the CMS web site or by clicking here.
