CMS is also proposing to do this demonstration in 5 to 8 states and that ALL Certified HHAs in those 5 to 8 selected states MUST participate!  The only way to opt out is to de-certify and/or close your doors!  How comfortable are you with that?



This does not seem to be a demonstration, by any stretch of the definition of demonstration.  There is an autocratic feel to this proposal that I would believe that just about all the HHAs in those 5-8 states (and all HHAs across the landscape of Medicare) will look on with fear and apprehension!  You propose to implement this program in Year 3 of Rebasing; and at this time, most HHAs are still suffering the effects of rebasing and trying to figure out how to operate in this environment while so much has been stacked against them; and this is only Year 1 of Rebasing!

To require 100% of all HHAs in any selected state is frankly: strong-armed politics.  There is a reason that HHAs are fearful about joining in any demonstrations and that’s because those demonstrations that have been done in the past seem to have done more damage to the participants than to bring about positive change and improvements in the program.  It’s different when you’re the one out in the field trying to keep your organization afloat when year after year more restrictive and punitive regulations are being heaped upon your industry, than if you are the one from the ivory-tower doing the heaping!  The National Assoc. of Home Care and Hospice noted earlier this year that because of all the regulatory and reimbursement changes over the last several years that they expect 40% of all HHAs to be operating at a loss this year (in 2014) with that rate increasing to 60% come 2017!  And in the middle of all this upheaval, you want to implement a program (I refuse to call it a demonstration when participation is not voluntary) that can/will radically impact reimbursement (some positive; probably more negative though) for ALL the HHAs in 5-8 states; and with an untested program for the home health industry.  No! No! No!  This is not a reasonable proposal for this time period.  I am not arguing against the concept of “Value-Based Purchasing” as I have always believed that a good “Pay-for-Performance” approach would be a value-added provision for the program; but only one that had been vetted and proven in a reasonable approach; not the draconian 5-8 states with 100% mandatory participation required as per this proposal.


If you want to do this, here are a couple of options:

1)  Purchase surety bonds for the benefit of the owners of the 25-40% of the HHAs that this demonstration will undoubtedly close within the first 2 or 3 years of its implementation, assuming it is implemented fairly much like it’s proposed; guaranteeing a minimum value in return (e.g., 75% of their Medicare Revenues) if/when they close.


2) Do like what you did to get insurance companies to offer Medicare Advantage Plans: throw in extra monies to encourage participation. In theory, a small price to pay today for greater future savings when spending will be greater! Insurance companies were paid a premium of approximately 19% over what the capitated rate was for the average Medicare beneficiary under FFS; so why not do something similar for home health. You wouldn’t even have to offer that much! Give everybody that participates in the demonstration a 10% increase in their episodic rates across the board and then apply the 5-8% payment adjustment to test the program. Everybody is still kept better than whole and your participants will be much more motivated to help refine and improve the demonstration to the benefit of themselves; but which will also benefit the Medicare Program overall. This will give those below-average HHAs an opportunity to improve themselves within reasonable timeframes without putting them fairly quickly into a survival mode where their focus becomes that of keeping their nose above the water line as opposed to enabling them to learn how to do what they do more efficiently and cost effectively! After all, isn’t that what this endeavor is trying to achieve?