In somewhat of a surprise move, U.S. health care policymakers unveiled plans last week to expand the Home Health Value-Based Purchasing (HHVBP) Model, a nine-state Medicare demonstration designed to better align reimbursement to quality of care.

Despite backing from most of the home health industry, the HHVBP Model — first implemented in 2016 — had seemingly hit a speedbump in recent years. Apart from a handful of minor modifications, the model only remained active in Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska and Tennessee.

With more than one-quarter of its home health agencies currently located in HHVBP states, the Baton Rouge, Louisiana-based Amedisys Inc. (Nasdaq: AMED) has been among the biggest supporters of value-based purchasing. The company has persistently urged the Center for Medicare & Medicaid Innovation (CMMI) to expand the model for over a year.

“There’s still a perception out there that there is a high level of fraud in home health care — and that’s simply not true,” Amedisys CEO and President Paul Kusserow told Home Health Care News. “I think having to prove ourselves on the quality front and being willing to take risk on quality is absolutely the right thing for us.”

So far, even just the limited HHVBP Model has been able to achieve overwhelmingly positive results.

Since its implementation, the model has contributed to a 4.6% improvement in home health agencies’ quality scores, in addition to average annual Medicare savings of $141 million, federal statistics show. On top of those points, agencies in HHVBP states have been able to significantly lower the costly utilization of hospitals and skilled nursing facilities (SNFs).

“This has been extremely good,” Kusserow said.

As part of its push for an expanded HHVBP Model, Amedisys brought in Washington, D.C.-based research and consulting firm The Moran Company. The home health giant asked Moran to dig deeper into past results and explore what a nationwide rollout would eventually look like.

After cranking the numbers, the research firm estimated that a 50-state HHVBP Model would result in about $6.3 billion in savings over a 10-year period, using Congressional Budget Office (CBO) scoring methodology.

“We engaged in a very long dialogue [with CMMI] and exchanged a lot of data to push this forward,” Kusserow added.

Inside the advocacy process

Besides the whopping $6.3 billion in savings, Moran also determined that a nationwide rollout of the Home Health Value-Based Purchasing Model would lead to better post-acute care outcomes for Medicare beneficiaries and more ways for the U.S. Centers for Medicare & Medicaid Services (CMS) to identify high- and low-quality providers.

In many ways, the advocacy efforts around HHVBP were so effective because they were driven by “the power of a good idea,” according to David Kemmerly, the chief legal and government affairs officer at Amedisys. Instead of having to artfully persuade CMS and CMMI to expand the model, his team’s job was more about giving policymakers the objective information they otherwise lacked.

“They have to go make their case with the actuaries before they can expand something,” Kemmerly told HHCN. “So we helped arm CMS with the data and information they needed.”

It took more than facts and figures, however.

To help advance HHVBP, Kusserow communicated regularly with CMMI Director Brad Smith, the former CEO of home-based palliative care provider Aspire Health who joined the CMS Innovation Center in early 2020. Kusserow and Smith had already “known each other a long time,” thanks to their shared experiences in Nashville, Tennessee, and standing as Rhodes scholars.

“When [Smith] went to Washington, he called me up and said, ‘What should I be thinking about?’” Kusserow said. “Obviously, he was asking a lot of people that. I said, ‘I really think there’s something to value-based purchasing in home health. I’d really like you to look at it.’”

At first, CMMI decision-makers were concerned about home health provider buy-in.

While Amedisys and others sought to advance HHVBP, others were slightly skeptical, especially early on. More than a few home health operators believed HHVBP was just another piece of government regulation, with others too preoccupied with the Patient-Driven Groupings Model (PDGM) to worry about alternative payment mechanisms.

On its end, Amedisys worked hard to boost the industry’s understanding and acceptance of HHVBP, Kemmerly said.

“There’s a bit of politics involved,” he noted. “[Smith] asked us early on, ‘Where is the industry on this? And can you bring the industry to the table?’”

Unanswered questions

CMMI and CMS are committed to expanding the Home Health Value-Based Purchasing Model, but there are plenty of questions left to answer — and improvements that can be made.

On a basic level, it’s still unclear whether policymakers will try to expand HHVBP through a standalone proposal or through the annual rulemaking cycle. Additionally, it’s not yet known whether that future expansion will be national or more incremental, possibly adding another dozen or so states to the current nine-state mix.

Scott Levy, the senior vice president of government affairs at Amedisys, was in the trenches for most of Amedisys’ advocacy battle on HHVBP. In all likelihood, CMS will pursue a 50-state expansion and implementation through the annual rulemaking cycle, Levy speculated.

“I’m just merely reading between the lines, but our discussions [with CMS] and our data presented to them was all based on the idea of a nationwide expansion,” he told HHCN.

Along with answers to those questions, Amedisys is also pushing for improvements to the HHVBP Model itself.

In 2020, home health providers were exposed to 6% upside and downside risk, depending on their quality performance. That figure increases to 7% and 8% in 2021 and 2022, respectively.

But it’s almost impossible to come close to that full upside or downside as the model is currently structured.

“The upside has been good for us. It’s generally quite positive,” Kusserow said. “But we feel the curve is too clustered toward the center. It is very hard to get the full rewards or to get the full penalties.”

In 2018, the payment adjustment in HHVBP ranged from a 1.5% penalty for providers in the lowest-10th percentile to a 1.5% bonus for providers in the highest-10th percentile, according to an investment note from Bank of America. CMS previously stated that the average adjustment was a 0.85% bump in 2018.

“Companies out there with good technology, good tracking systems, good checklists, good verification processes and very good clinical operations are the ones that are going to continue to do well and thrive under this, for sure,” Kusserow said.

A possible complication to HHVBP expansion plans could have been the transition to a new Biden administration, which is guaranteed to bring changes to CMMI, CMS and throughout the U.S. Department of Health and Human Services (HHS).

Yet the team at Amedisys doesn’t see that as an issue, considering the model’s origins.

“[HHVBP] was actually rolled out by the Obama administration,” Levy said. “It was proposed during the fall of 2015 for a January 2016 implementation.”

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