In last year’s now-famous Jimmo vs. Sebelius case, the Medicare home health policy known as the “improvement standard” was struck down. Formerly, the improvement standard was used as a criterion that limited access to clinically advanced, cost effective and patient preferred home healthcare services. Even if a beneficiary would benefit from receiving medical treatment at home, coverage could be denied if the beneficiary’s condition would not improve as a result.
As a result, seniors living with such irreversible conditions as a physical disability or Alzheimer’s were turned away from home health. Skilled home healthcare services could have met their clinical needs, but because their condition was unlikely to improve, many of these patients were forced to obtain treatment in institutional settings instead – resulting in higher costs to the Medicare program, beneficiaries and taxpayers.
No longer – Jimmo has changed all that. In doing so, Jimmo may have done something else, as well: created Medicare’s first long-term care benefit.
It is projected that Jimmo will enable a great many beneficiaries to remain home rather than seek institutional care. As Baby Boomers continue entering the Medicare program, and with disabled individuals accounting for nearly 1-in-5 of all Medicare beneficiaries, the home health program is expected to experience significant growth.
Which begs another important question: is that a problem… or a solution?
Some may read the preceding paragraph with a sense of dread, worrying that significant growth of any Medicare benefit must surely be a threat to taxpayers and the Treasury. And yet, there is ample evidence to suggest that – at least in this case – the opposite effect is likely, thanks to the ability of skilled home healthcare to reduce Medicare spending. For example, a recent study published in The Journal of American Geriatrics Society found that home-based primary care reduced Medicare costs for ill elders by 17 percent over two years. Fewer hospitalizations, ER visits, skilled nursing facility stays, and specialist visits for chronically-ill seniors all contributed to this cost savings – and all were made possible by the delivery of skilled healthcare services at home.
Similar evidence was produced by the Clinically-Appropriate Cost-Effective Placement (CACEP) study conducted by Dobson|DaVanzo Associates for the Alliance for Home Health Quality and Innovation. The CACEP report examined three years of Medicare claims data and found that as much as 100 billion dollars in savings could be achieved over a decade if beneficiaries were treated in their homes rather than in more costly institutional settings
As a result, Jimmo may not only constitute the de facto creation of a long-term care benefit – it can serve as a powerful engine for the achievement of substantial and sustainable Medicare savings. Indeed, now that it can be used as a tool to help aging Americans maintain their health, home healthcare will enable more Medicare beneficiaries to manage their disability or disease at home and avoid hospitalizations and long-term facility-based care.
That said, the Medicare home health program is far from perfect and would benefit from targeted reforms to further enhance its effectiveness, efficiency and integrity. To achieve this important objective, home health community leaders like the Partnership for Quality Home Healthcare are advocating for positive reforms, such as:
- Value-Based Purchasing (VBP): The Securing Access Via Excellence (SAVE) Medicare Home Health Act of 2014 (H.R. 5110) proposes a VBP program for home health that would reduce hospital readmissions by establishing powerful incentives that reward positive outcomes. By enabling millions of seniors to skip avoidable hospitalizations and remain in their homes, this bill would achieve significant savings that are dedicated to stabilizing the delivery system.
- Post-Acute Care (PAC) Reform: The Bundling and Coordinating Post-Acute Care (BACPAC) Act of 2014 represents another key step. It would substantially reduce costs while improving care for elderly Americans via a site-neutral bundled payment system for Medicare post-acute care services, including home health. The legislation would reduce overall PAC costs by 4 percent, thereby generating considerable savings while enabling more seniors to remain at home.
- Program Integrity Reform: The Skilled Home Health and Integrity Program Savings (SHHIPS) Act is a proposal developed by the Partnership to combat fraud and abuse by such means as payment safeguards that would prevent the payment of aberrant claims. Additional provisions spanning participation standards, claims review processes, and meaningful entry limitations would likewise reduce cost by strengthening the integrity of the home health benefit.
The question of how our country will meet the long-term care needs of its aging population may have been answered, at least in part, by Jimmo. And as more seniors receive the care they need in the setting they most prefer – their home – we must take thoughtful steps to ensure that the skilled home healthcare delivery system is prepared to meet the needs of beneficiaries and taxpayers alike.
Eric Berger is the CEO of the Partnership for Quality Home Healthcare, a coalition of the nation’s leading innovators of home healthcare dedicated to improving the integrity, quality, and efficiency of home healthcare.