President Obama Releases Budget with Copays and Payment Impact for Home Care

President Barack Obama released his proposal for the Fiscal Year 2013 Federal Budget with a scaled back version of copayments for home health care as well as payment adjustments for all post-acute providers.

According to the President’s proposal, a home health copayment of $100 per home health episode would be established and would be applicable for episodes with five or more visits not preceded by a hospital or other inpatient post-acute care stay. This, the budget narrative continues, would ap­ply to new beneficiaries beginning in 2017. The President’s budget notes that this is consistent with a MedPAC recom­mendation to establish a per episode copayment, although MedPAC had recommended a more severe copayment of $150 per episode.

MedPAC’s recommnedation cited by the President’s budget team noted that “beneficiaries without a prior hospitalization account for a rising share of epi­sodes” and that “adding beneficiary cost sharing for home health care could be an additional mea­sure to encourage appropriate use of home health services.” This proposal is estimated to save approximately $350 million over 10 years.

According to the National Association for Home Care & Hospice (NAHC), the President’s Budget also includes a reduced Market Basket Index (inflation) update from 2014 to 2021. The proposed update reductions of 1.1 percentage points each year affect all post-acute providers. These reductions, NAHC states, would be in addition to the 2014 home health rate rebasing and the productivity adjustments starting in 2015. The President estimates this measure will save $63 billion over ten years taking into account the other adjustments for all post acute providers.

Additionally, the Independent Payment Advisory Board (IPAB), which was initially established in the Affordable Care Act, will be strengthened under the President’s budget proposal. The group is charged with keeping Medicare solvent by enacting cost-saving measures if Medicare spending exceeds certain levels. The President’s proposal essentially lowers those spending triggers.

The budget blueprint touts some of the fraud and abuse crackdown and prevention achievements the administration has made and advances suggestions for furthering that effort:

  • Cre­ate new initiatives to reduce improper payments in Medicare;
  • Dedicate penalties for failure to use electronic health records toward deficit reduction;
  • Update Medicare payments to more appropriately account for utilization of advanced imaging;
  • Re­quire prior authorization for advanced imaging;
  • Direct States to track high prescribers and utiliz­ers of prescription drugs in Medicaid to identify aberrant billing and prescribing patterns; and af­firm Medicaid’s position as a payer of last resort by removing exceptions to the requirement that State Medicaid agencies reject medical claims when another entity is legally liable to pay the claim.
  • Alleviate State program integrity reporting requirements by consolidating redundant error rate measure­ment programs to create a streamlined audit program with meaningful outcomes, while main­taining the Federal and State’s government abil­ity to identify and address improper Medicaid payments.

Finally, the President’s budget makes a commitment to follow through on the Department of Labor’s proposed rule on removing the so-called “companionship exemption” for allowing overtime and minimum wage protections.

For more information, view the President’s budget proposal here.

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Governor Releases FY13 Budget Blueprint

Governor Deval Patrick released his proposal for the state’s fiscal year 2013 budget, which sets the stage for the legislature to work out their own versions and come to an eventual agreement over the next six months.

The Governor’s budget does not include any projected increases or cuts for home health, as is the case with most programs (MassHealth Nursing Home Supplemental Rates are reduced from FY12 spending by more than $300 million in the Governor’s proposal).  The MassHealth line items are almost all increased to “meet projected need,” which just translates to level funding. Here is a list of the line-items of note, including the MassHealth accounts.

  • MassHealth Managed Care (line item 4000-0500) increased $183,988,029 over FY12 spending to $4,164,475,376
  • MassHealth Senior Care (line item 4000-0600) increased $196,976,192 over FY12 spending to $2,763,630,662 .
  • MassHealth Fee-for-Service Payments (4000-0700) increased $129,850,745 over FY12 spending to $1,939,680,126.
  • Home Care Purchased Services (9110-1630) had a short increase just over $2,000 to $97,783,061.
  • Elder Enhanced Home Care Services (9110-1500) increased $672,147 to $46,461,487 .

The Governor’s office provides more details on health care costs and reasoning for those decisions here. The Home Care Alliance will continue to provide more information as further analysis is completed. The Alliance will once again be advocating for line items of concern as the budget process moves forward, including on issues like payment rates and telehealth reimbursement from Medicaid.

For more general information, several articles from sources like and are available that explain some of the Governor’s budget as well.

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MassHealth Releases Dual Eligible Demo Proposal for Public Comment

After months of stakeholder meetings and public presentations, MassHealth has released their official proposal for the “State Demonstration to Integrate Care for Dual Eligible Individuals” to the Centers for Medicare and Medicaid Services (CMS).

The initiative seeks to combine Medicare and Medicaid funding to contract with an Integrated Care Organization (ICO) that will pay for coordinated and comprehensive care for dually eligible individuals ages 21 to 64. Massachusetts was one of 15 states to be awarded a planning grant for the project and has been in contact with CMS on crafting benefit design, enrollment processes, and payment processes.

The release of the draft proposal initiates a 30-day public comment period that will remain open until 5:00 pm, January 10, 2012. Two public hearings are also planned at the following dates and locations:

  • December 16, 2011, 1 pm – 4 pm, at the Worcester Public Library, Saxe Room, 3 Salem Square, Worcester, MA
  • January 4, 2012, 9 am – 12 noon, at the State Transportation Building, Conference Rooms 2 & 3, 10 Park Place, Boston, MA

For any agencies caring for dually eligible patients, we strongly encourage you to look at the proposal and send in comments. The Home Care Alliance would also like any case studies of these patients that agencies have been successful in keeping in the community.

Agencies can send comments to:, or mailed to:

Executive Office of Health and Human Services
Attn:  Lisa Wong
One Ashburton Place, Rm. 1109
Boston, MA 02108

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EOHHS Hosting FY2013 Budget Hearings

The Home Care Alliance is collecting written testimony and encouraging those interested to present oral testimony for upcoming hearings being hosted by the Executive Office of Health and Human Services (EOHHS) on the upcoming Fiscal Year 2013 budget.

Indications have been made that the upcoming budget will be just as difficult as those in previous years so it is important that home care agencies show up and submit written comments to convey the significance and value of the services they provide. EOHHS is seeking input about the best ways to preserve core services to the fullest extent possible without additional expenditures. As such, the Alliance suggests that agencies promote work in care transitions, disease management, and the general value of keeping people independent at home. The Alliance is also pushing for MassHealth coverage of telehealth technology as well as legislation on nurse delegation of medication administration, which we encourage people testifying to include in their comments.

Secretary JudyAnn Bigby, M.D., and the Assistant Secretaries at EOHHS will be on hand for both hearings so comments should begin by addressing them accordingly. The two hearings will be held this week and next week at the following dates and locations:

Friday, December 2, 2011 from 3:00-6:00 p.m.
Department of Mental Health Western Massachusetts Area Office
Northampton Haskell Building
1 Prince Street
Northampton, MA 01061

Friday, December 9, 2011 from 2:00–6:00 p.m.
Agganis Arena at Boston University
Francis D. Burke Club Room
925 Commonwealth Avenue
Boston, MA 02215-1204

Due to the number of individuals anticipated to attend the hearings, oral testimony will be limited to three minutes per individual. In the interest of time, representative panels are welcome and will be limited to a total of five minutes of oral testimony. If a number of home care agencies are interested, they will be added to a panel as HCA will be attending and testifying at the Boston hearing on December 9th. HCA asks that you also inform us if you sign up to attend or submit written comments on your own.

If you need accommodations please call 617-573-1600 and let the receptionist know.  Additionally, if you are planning to present oral testimony at the Boston hearing, please note that you must be in the building by no later than 5:50 p.m.

Written testimony can be sent to the Home Care Alliance to be submitted collectively, or may be mailed to:

Secretary JudyAnn Bigby, EOHHS
One Ashburton Place, Room 1109, Boston, MA 02108
Or emailed to:

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Health Care Innovation Challenge Announced

A new funding opportunity has been announced by the CMS Center for Innovation (CMMI).

The Health Care Innovation Challenge, relative to Section 3021 of the Affordable Care Act, will award funding to innovative projects that test ways to deliver the three-part aim of better health, better health care and lower costs through improved quality for Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) enrollees.

Preference will be given to projects that focus on rapid workforce development. Eligible applicants include provider groups, health systems, payers and other private sector organizations, faith-based organizations, local governments, and public-private partnerships and for-profit organizations. States are not eligible to apply. Up to $1 billion is available for this opportunity. Individual awards expect to range from $1-$30 million over a three year period. Applications are due January 27, 2012.

If any home care agencies are interested in this opportunity, the Alliance will be providing assistance and guidance as with the Community-Based Care Transitions Program.

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Alliance Meets with New Medicaid Director

photo of Julian HarrisThe Governor appointed a new Director of Medicaid in June and the Alliance has had the opportunity to meet with Dr. Julian Harris (pictured left) twice since he began acclimating to his new role.

HCA staff joined other advocates in a meeting that involved personal and organizational introductions to the new Director as well as a mention of a few top issues for each organization as it pertains to MassHealth activity. Prior to that, Alliance staff was among a small group of providers meeting with Health and Human Services Secretary JudyAnn Bigby and other officials on the Dual Eligibles Care Integration Project, which Dr. Harris sat in on.

According to a press release issued by the Governor’s office, Dr. Harris currently practices primary care at the Southern Jamaica Plain Community Health Center and hospitalist medicine at the Cambridge Health Alliance, both of which serve populations with high levels of participation in MassHealth and other state health programs. He is a clinical fellow on the faculty at Harvard Medical School and a senior resident in internal medicine and primary care at the Brigham and Women’s Hospital and its affiliated Southern Jamaica Plain Community Health Center. He formerly served at the World Bank, where he was charged with day-to-day management of the World Bank Institute’s AIDS program. He also worked on national health payment and delivery system reform for an international client at McKinsey & Company.

The Alliance looks forward to working with Dr. Harris on the challenges and opportunities for home care and MassHealth members.

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CMS Proposes Medicare Home Health Payment Changes for 2012

The Centers for Medicare and Medicaid Services (CMS) have issued a proposed rule regarding payment changes as well as revisions to the physician face-to-face and therapy assessment rules.

Below is a summary of the most noteworthy aspects of the proposed rule provided by the National Association for Home Care & Hospice (NAHC):

1.       Proposed 2012 payment base episode rates are reduced to $2112.37 from the current $2192.07. This is a reduction of approximately 3.56%.

2.       The rate changes are due to a proposed 2.5% market basket index inflation update, a 1 point reduction in the MBI under the health care reform law, and a 5.06% case mix creep adjustment.

3.       The increase in the case mix creep adjustment is due to the evaluation of 2009 coding weight changes. CMS found that ¾ of the coding increases was a result of increases in therapy visits above the 14 and 20 visit thresholds.

4.       The 3.56% rate reduction will impact individual providers unevenly. CMS proposes to make significant changes in coding weights by eliminating hypertension as a factor in the calculation, reducing the weights on therapy episodes, and increasing weights on non-therapy episodes. Providers with high volumes of therapy cases could see greater net rate reductions. A provider-specific analysis using the provider’s particular case mix is the only reliable way to assess impact.

5.       CMS proposes to change the face-to-face rule and allow one physician to do the encounter and report the information to another physician who completes the certification and plan of treatment documentation. This should help in circumstances where a patient is under the care of a hospitalist who transfers the patient to a community physician.

6.       CMS proposes to clarify the therapy assessment standard where more than one discipline is involved.

The proposed rule on rates is in line with what had been expected. Nevertheless, that does not turn a lemon into lemonade. The change on the face-to-face rule is appreciated, but will only make a slight improvement as the documentation requirements remain a problem.

CMS also posted the proposed rule on the Medicaid face-to-face encounter requirements. The proposal aligns the Medicaid time frames with the Medicare time frames while providing some flexibility to states to determine other aspects such as the content and form of documentation. The proposal also reaffirms CMS’s position that a homebound requirement in Medicaid home health is not permitted and that services can be provided outside the home. Finally, the proposal offers clarifications on the coverage of medical supplies and equipment.

Another summary is available in a press release issued by CMS with a few more specifics on payment. The Home Care Alliance is working on a specific analysis regarding the payment changes based on the northeast’s wage index and will have that available soon.

See links to the specific proposed rules in the Federal Register below:


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