As the U.S. ages and seniors opt for in-home care, lawmakers are stressing the importance of robust home health services.
Still, provider and patient advocate witnesses at a Senate Finance Committee healthcare hearing on Tuesday argued that access to home care is disappearing as payment cuts and workforce challenges strain the industry.
“There are long wait lists to get home health services. In my state, for non-medical benefits, we have 30,000 on a waitlist,” said Sen. Ben Cardin, D-Md. “That's unacceptable. We can do better than that.”
Reduced reimbursements are challenging access to care, particularly in rural areas, home health advocates said.
The Patient-Driven Groupings Model (PDGM), a new payment model that went into effect in 2020, aimed to shift Medicare away from paying for the amount of therapy sessions, instead focusing on the complexity of care provided. It also calculated a 30-day episode of care, down from a 60-day version, to avoid promoting volume over value.
Witnesses said the PDGM and ensuing reimbursement cuts have taken a toll on services that agencies can offer. Carrie Edwards, a hearing witness and director of home care services at Mary Lanning Healthcare, said the PDGM has resulted in “significant payment reductions” for her agency, which now covers only one county in rural Nebraska.
Regulators were required to make assumptions about behavior changes that would occur as they switched to the PDGM and the 30-day episode of care, and keep the implementation budget neutral. But earlier this summer, the CMS proposed a $375 million cut to home health reimbursements for 2024, noting Medicare ended up paying more under the new payment system compared with the old one.
Home health industry groups blasted the proposed payment rule, arguing the cuts would worsen an already fragile economic situation for home health providers. The National Association for Home Care and Hospice sued the HHS earlier this summer over the suggested payment cuts.
Sen. Marsha Blackburn, R-Tenn., said the proposed payment rates for next year are creating instability and uncertainty among providers in Tennessee, who are often caring for patients with multiple chronic conditions.
“You look at this payment policy, and then you look at this historic inflation, and also the workforce challenges that we have, especially in rural areas, and you can see that this is creating what will end up being a perfect storm, in the most negative sense, for many seniors with complex medical issues,” Blackburn said.
But it’s too early to determine how the PDGM has impacted home health and whether regulators should make changes, said David Grabowski, a professor of healthcare policy at Harvard Medical School.
“Because we cannot disentangle what changes are due to the PDGM and what changes are due to the pandemic, I would caution the Congress about making major changes to the PDGM at this time,” Grabowski said. “Let's wait for more data.”
Witnesses and lawmakers noted additional home health access challenges for rural residents. Though most Medicare beneficiaries live in an area served by at least two home health agencies, the situation is more nuanced for rural patients, said Tracy Mroz, an associate professor in the department of rehabilitation medicine at the University of Washington.
“The number of agencies serving a community represents supply, which is a necessary but not sufficient measure of access to care,” she said. “Rural agencies may refuse referrals for new admissions when they don't have adequate capacity.”
Patients likely live further away from one another in rural communities, lengthening travel time for providers and lessening their capacity. Agencies are more likely to be nonprofit or governmental and hospital-based, which means slimmer margins and a reliance on hospitals to remain financially viable, Mroz said.
Workforce challenges are an additional concern for the home health sector, especially as the nation ages and demand grows. Employment of home health and personal care aides is projected to grow 22% over the next decade, according to the Bureau of Labor Statistics.
Seniors have reported challenges finding home healthcare workers as aides burn out in the wake of the COVID-19 pandemic and find higher paying jobs elsewhere. Median pay was only $14.51 per hour, or $30,180 per year, for home health and personal care aides in 2022, according to the BLS.
“The home health aide workforce is much lower per capita in rural communities, and is particularly fragile due to low wages, unpredictable hours and emotionally and physically demanding work. Policies to support this workforce are urgently needed because without a workforce there is no care,” Mroz said.
Medicare fee-for-service payments are usually above costs, and agencies should also be able to pay employees the prevailing market wage rate, Grabowski said. But if there are some markets where this isn’t the case, Congress should consider targeted policies toward the higher cost of labor.