Rehab providers urge CMS not to cut pay for early home health transfers

Inpatient rehabilitation providers say regulators should not change Medicare reimbursement for early transfers to home health agencies, despite the policy’s potential to save the federal government close to $1 billion.

In letters to the Centers for Medicare and Medicaid Services due Tuesday, providers said adding such a policy would lead to underpayments for inpatient rehabilitation care and hamper patient access to care. Home health is a continuation of inpatient rehabilitation facility care, not a replacement for it, providers argued.

“Payment cuts of this magnitude will almost always lead to reduced access to care. This is particularly true right now as IRFs and other providers are still encountering increased costs and burdens attributable to the COVID-19 pandemic,” said a letter from Select Medical, which operates inpatient rehabilitation hospitals in 12 states. “Yet, there is no clear benefit to patient care or beneficiary access that is likely to result from an expansion of the IRF transfer policy.”

CMS in 2002 decided to reduce inpatient rehabilitation facility payments for patients discharged prior to the average length of stay for patients with similar diagnoses to reduce incentives to discharge patients before they’re ready. Pay can be cut for early transfers to another rehab hospital, an inpatient hospital, skilled nursing facility or long-term care hospital, but the policy doesn’t apply to patients discharged early to home health agencies.

Applying the transfer policy to early home health discharges could have saved Medicare approximately $993 million from 2017 through 2018, a December report from the Health and Human Services Office of Inspector General found. The Medicare Hospital Insurance trust fund is expected to run dry by 2026.

CMS said it would consider adding home health to the transfer payment policy as recommended by the HHS inspectors, and asked for feedback in its most recent payment proposal for inpatient rehabilitation facilities on making the addition in a future rule.

Providers responded with a resounding ‘no’. Home health is different from the care settings already included in the transfer policy because it’s an extension of inpatient rehabilitative care, not a substitution, providers said. The transfer policy is meant to apply to care that substitutes for rehabilitation, CMS said in a prior rule.

The University of Pittsburgh Medical Center Rehabilitation Institute said including home health in the early transfer policy could potentially incentivize providers to unnecessarily delay a patient’s discharge until the average length of stay, or encourage outpatient services when home health might be better for the patient.

“Many of our patients are successful in their rehabilitation program and with subsequent home health support are able to maintain their level of function in the home environment. Home health should not be considered a transfer, but part of a patient support network that is available regardless of the patient length of stay if the patient requires those services,” UMPC said in a comment letter.

Encompass Health, which operates 147 rehab hospitals across the country, added in its own letter that the goal of inpatient rehabilitation is to get patients back to their homes and communities as quickly as possible.

Adding home health to the early transfer policy is contrary to the Biden administration’s goal of increasing access to care at home, said Kate Beller, the American Medical Rehabilitation Providers Association’s executive vice president for policy development and government relations.

“Any policy that would disincentivize providers from discharging patients home with home health when they are ready to be home safely is something we don’t think really makes any sense from a clinical perspective and from the patient safety perspective,” Beller said in an interview.

AMRPA also took issue with the way the Office of Inspector General conducted its December study. The study didn’t take into account that inpatient rehabilitation facility payments are based on average patient length of stay overall, the trade group said in its comment letter. Facilities have to take on costs for patients who stay longer than average, and only considering early discharges would skew payment, AMRPA’s comment letter said. Additionally, the group’s own analysis didn’t detect significant discharge timeline differences between patients discharged to home health and the greater patient population.

Other providers urged CMS to consider care quality and outcomes, including hospital readmissions data. The Office of Inspector General report only examines claims data, providers noted.

However, opposition to the policy change isn’t universal. Value-based care company Signify Health said it doesn’t see how adding home health to the transfer policy would affect patient access to services.

“As the transfer policy to home health presently reads, the decision to discharge early may be influenced by the incentive to free a bed while still receiving the full [case-mix group] payment. However, a patient who no longer requires or cannot tolerate three hours per day of skilled therapy should return home on the earliest day based on medical necessity,” Signify Health said in a comment letter to CMS.

CMS hasn’t proposed an official policy change, but said in the proposed fiscal 2023 inpatient rehabilitation facility payment rule it hoped to combine industry comments and agency analysis in potential future rulemaking.

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