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This is Part Seven of a ten-part CMA Issue Brief Series examining the growing crisis in access to Medicare home health coverage and necessary care – and outlining the Center for Medicare Advocacy’s work to address these issues. We invite you to follow this Issue Brief Series and submit Medicare home health stories to the Center at

CMA Issue Brief Series: Medicare Home Health Care Crisis

  1. Overview – The Crisis in Medicare Home Health Coverage and Access to Care
  2. Medicare Home Health Coverage, Legally Defined
  3. Medicare Coverage for Home Care Is Based On a Need For Skilled Care – Improvement Is Not Required
  4. Misleading and Inaccurate CMS Medicare Home Health Publications
  5. The Home Care Crisis: An Elder Justice Issue
  6. Beneficiary Protections Expanded in Revised Home Health Conditions of Participation
  7. Barriers to Home Care Created by CMS Payment, Quality Measurement, and Fraud Investigation Systems
  8. Proposed CMS Systems Will Worsen the Home Care Crisis
  9. A Further Examination of the Home Care Crisis: Published Articles and Statistical Trends
  10. Strategic Plans to Address and Resolve the Medicare Home Care Crisis

Barriers to Home Care Created by CMS Payment, Quality Measurement, and Fraud Investigation Systems

Medicare payment policies, quality measures, and fraud investigations – not coverage laws – have improperly morphed Medicare’s home health coverage into primarily a short-term, acute care benefit, creating barriers for those with longer-term and chronic conditions. Through policies that drive behavior of home health agencies, CMS has created an environment that discourages agencies from providing home care equally to all who qualify. This is wrong and contrary to Medicare law and Congressional intent.

Payment Policies – The Home Health Prospective Payment System (PPS)

Medicare’s PPS pays home health agencies a bundled amount for the set of services provided during each 60-day episode of care. PPS was implemented in 2000, following an interim prospective payment system developed in the late 1990’s to replace per visit fee-for-service payments to home health agencies. While developing PPS, CMS analysis calculated PPS would work by balancing profitable and non-profitable cases because some patients would need more services and some would need less.

The PPS payment formula provides greater reimbursement for increased covered therapy services, no greater reimbursement for increased nursing services, and minimal reimbursement for covered unskilled services, such as those provided by home health aides. Further, the PPS calculations provide higher payment for the first 120 days of care, lower payment thereafter. After PPS was introduced, home health agencies adjusted to favor those cases that would be most profitable. Because home health agencies are not required to admit all beneficiaries, they can choose to serve the more profitable cases – and they have. Caring for those with longer-term and chronic conditions is often unprofitable. Thus, many people with long-term and chronic conditions who need relatively less therapy, and relatively more home health aide services, often cannot access the home care they need.

Although Medicare home health coverage laws have remained largely unchanged over the past several decades, services provided by home health agencies have changed dramatically to maximize profits under PPS. While the percentage of beneficiaries using home health services has remained fairly stable since Medicare payment systems changed, the amount and kind of care has changed because of PPS. Between 1997 and 2015, therapy visits have increased significantly (from 10% of all visits in 1997 to 37% of all visits in 2015) and home health aide visits have declined dramatically (from 48% of all visits in 1997 to 10% of all visits in 2015).[1] Payment incentives have driven the therapy increase, payment disincentives have driven the home health aide decline. PPS has improperly redefined the home care benefit and left many Medicare beneficiaries with little or no access to the services they need.

Payment Policies – The Home Health Value Based Purchasing (HHVBP) Model

The HHVBP Model began on January 1, 2016 for nine states.[2] The Model authorized Medicare to make payments beginning in calendar year 2018 based on performance data measurements gathered since 2016. Accordingly, payments will be incrementally adjusted (upward or downward) up to 3% in 2018; up to 5% in 2019; up to 6% in 2020; up to 7% in 2021; and, up to 8% in 2022.

HHVBP is expected to expand beyond the nine states in the Model. It has had a further chilling effect on access to home health for those who need care, but who are not able to improve – those with longer-term, debilitating, and chronic conditions. The HHVBP Model compares home health agency performance on quality measures against the performance of other competing home health agencies within the same state and size cohort. The scoring methodology is based on performance on specified quality measures. Of ten enumerated quality measures, six are improvement-based (improvement in ambulation; improvement in bathing; improvement in bed transferring; improvement in dyspnea; improvement in management of oral medications; improvement in pain interfering with activity). Another quality measure requires discharge from home health. Thus, seven of the ten quality measures that determine HHVBP Model payments or penalties discriminate against patients with long-term and chronic care needs who will not improve. (The other three quality measures are: drug education for all medications, flu immunizations received, and pneumococcal vaccines received.)

Rewards and penalties (up to plus or minus 8%) of the HHVBP Model will further drive home health agencies to serve only Medicare beneficiaries who will improve, thus leaving those beneficiaries in need of longer-term care for chronic needs without access to Medicare-covered care.

Quality Measurements – The Home Health Quality Reporting Program

CMS touts a “quality” system based on a star-rating measurement to assist Medicare beneficiaries to compare the quality of services provided by home health agencies.[3] CMS states that the purpose of the star-rating system is to help beneficiaries learn how often best practices are used “when caring for patients and whether patients improved in certain important areas of care.”

Rather than create a quality reporting system that measures quality of care for all patients who qualify under the law, CMS has implemented a “one-size-fits-all” system that encourages care for some patients (short-term and post-acute care) and discourages care for other patients (longer-term and chronic care). According to this competitively ranked, simplistic, and discriminatory quality measurement system, a four or five star rating means that an agency performed “better” than other agencies on care practice and outcome measures. The result of achieving a four or five star rating, however, means that an agency has likely avoided serving patients with longer-term conditions who would otherwise not score well on care practice and outcome measures. Those measures are as follows:

Managing Daily Activities

  • How often patients got better at walking or moving around
  • How often patients got better at getting in and out of bed
  • How often patients got better at bathing

Managing Pain and Treating Symptoms

  • How often patients had less pain when moving around
  • How often patients’ breathing improved
  • How often patients’ wounds improved or healed after an operation

Preventing Harm

  • How often the home health team began their patients’ care in a timely manner
  • How often the home health team taught patients (or their family caregivers) about their drugs
  • How often patients got better at taking their drugs correctly by mouth
  • How often the home health team checked patients’ risk of falling
  • How often the home health team checked patients for depression
  • How often the home health team made sure that their patients have received a flu shot for the current flu season.
  • How often the home health team made sure that their patients have received a pneumococcal vaccine (pneumonia shot)
  • For patients with diabetes, how often the home health team got doctor’s orders, gave foot care, and taught patients about foot care

Preventing Unplanned Hospital Care

  • How often home health patients had to be admitted to the hospital
  • How often patients receiving home health care needed any urgent, unplanned care in the hospital emergency room – without being admitted to the hospital
  • How often home health patients, who have had a recent hospital stay, had to be re-admitted to the hospital
  • How often home health patients, who have had a recent hospital stay, received care in the hospital emergency room without being readmitted to the hospital

Some of the measures are achievable for every patient (e.g. beginning care in a timely manner, making sure flu and pneumonia shots are delivered) but what if the patient had a stroke resulting in permanent paralysis or has a disease that won’t get better? What if they can’t put medicines in their mouth, get out of bed, walk around, or bathe themselves? What if their breathing doesn’t improve because they have COPD, or their wounds won’t heal because they have diabetes? Should those patients be discriminated against by CMS “quality measurements”? Regrettably, that is the impact of CMS’s quality system. It penalizes home health agencies by giving them lower “star” ratings if they provide services to beneficiaries who cannot achieve those measures.

In addition to the care practice and outcome measures, Home Health Compare provides patient survey results obtained through an instrument called Home Health Consumer Assessment of Healthcare Providers and Systems (HHCAHPS) from patients who have been served by a home health agency. The questions on the HHCAHPS survey, with percentage of positive answers tallied and ranked up to five stars, are as follows:

  • How often did the home health team give care in a professional way?
  • How well did the home health team communicate with patients?
  • Did the home health team discuss medicines, pain, and home safety with patients?
  • How do patients rate the overall care from the home health agency?
  • Would patients recommend the home health agency to friends and family?

CMS care practice and outcome measures seem to conflict with the HHCAHPS beneficiary survey. As an example, home health services provided by the Connecticut Hospice scored highly on the HHCAHPS survey (4 stars out of 5), but scored poorly on CMS quality measures (1.5 stars out of 5) because the characteristics of individuals served by CT Hospice (patients not expected to improve) negatively influence CMS quality measurements.

Patient surveys should be designed, along with care practice and outcome measures, to recognize appropriate care for all Medicare beneficiaries. The current measurement criteria do not advance access to home care for all. They are misleading and discriminatory.

CMS Fraud Investigations

Home health agencies fear triggering investigations for Medicare fraud when they serve patients for long periods of time. Fraud triggers are often primarily based on length of care, not because care is determined to be unnecessary or not covered under the law. Focusing on length of care as a fraud trigger is likely contributing to artificially inflated claims of fraudulent activity by CMS. Cases meeting the legal criteria for Medicare home health should not be targeted for fraud. Such investigations conflict with the law and interfere with the legitimate pursuit of real fraudulent activity.

The Center for Medicare Advocacy has been informed by multiple home health agencies that Medicare contractors’ conduct trainings during which presenters incorrectly state that there is no coverage for maintenance care, that patients should be discharged if their condition is “stable or not changing,” and that Medicare home health is intended to be for short-term and post-acute care. Home health agencies under fraud investigation, that have only above average length of care cases targeted, have been told by CMS that “CMS received credible allegations that [the agency] is billing for medically unnecessary services, as well as falsely representing the level of service purportedly provided, thereby inflating the value of claims submitted to Medicare and misrepresenting services or products. In addition, it is alleged that [the agency] is billing for home health services for beneficiaries that are not homebound.” Every possible coverage criteria is questioned, with no direct query about the reason for the length of care, although the cases listed for investigation are all longer-term and chronic care cases.

The harsh reality for agencies under fraud investigations is that all Medicare payments to an agency are suspended while the agency prepares rebuttals and other challenges. Rather than manage these challenges and risk losing such a significant payment source, agencies choose to discharge patients who need and qualify for continued Medicare-covered services.


Medicare home health coverage is equally a long-term, chronic care benefit and a short-term, post-acute care benefit, as defined by Medicare law and Congressional intent. While Medicare coverage laws remain substantially unchanged, over the past two decades PPS has failed to balance payments for all who qualify for coverage. Instead, PPS has driven agencies to serve patients who generate the greatest profit margins, leaving many who need care with limited or no services. The dramatic impact of PPS – from home health as a benefit that provided primarily (low cost) home health aide services to a benefit that provides primarily therapy services, is driven by payment systems that conflict with coverage laws. Further, PPS has created usage data that does not reflect patient care needs. Agencies have delivered what they are most highly compensated for, and they have neglected the needs of patients who may diminish their profit margins.

The additional impact of newer models and systems – HHVBP, quality reporting measurements, more aggressive fraud investigations, and CMS’ newly proposed home health groupings model – will accelerate barriers to home health care for people with long term and chronic conditions. Coverage under the law will become wholly unrecognizable compared to services and coverage actually available. CMS must properly effectuate coverage laws and create an environment (through revised payment models, quality measures, and fraud policies), that encourage agencies to provide care equally for all who qualify under Medicare law.





[1] Id at page 36, Table 9-1.
[2] Authorized by Section 1115A of the Social Security Act and finalized in the CY 2016 HH PPS final rule. Fed. Reg. Vol. 81, No. 128.



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