President’s Budget for HHS in FY 2021

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The White House presented its FY 2021 budget to Congress in early February.  The budget included HHS budget provisions reflecting the Trump Administration’s views on policy areas affecting hospice.  Though not legally binding, the President’s budget request serves as a platform on which he can recommend his policy preferences to Congress.  The budget proposes to reduce spending on CMS-administered programs by $1.6 trillion over the next ten years, including $500 billion from Medicare and $920 billion from Medicaid.  This article discusses highlights in the FY 2021 budget affecting hospice.

Pay for Outcomes

The Trump Administration intends to pay clinicians and providers to help patients stay healthy and to eliminate regulatory barriers to effective care coordination. Addressing regulations that impede care coordination is part of a much broader regulatory reform effort at HHS.

In 2019, the CMS Innovation Center released an updated Medicare Advantage Value-Based Insurance Design Model, which tests the impact of allowing Medicare Advantage organizations to develop plan benefit designs that are targeted to specific groups of enrollees based on socioeconomic status, health conditions, or both.  The model also expands the scope of rewards and incentives programs, includes requirements for wellness and healthcare planning (advanced care planning), and in FY 2021 will allow for an integrated hospice benefit.

Modify Payment for Hospice Care Provided to Beneficiaries in Skilled Nursing and Nursing Facilities

Medicare pays hospices the same rate for routine home care provided in skilled nursing facilities and nursing facilities as it does for other settings, such as private homes.  The Administration claims the approach results in an overpayment to hospice providers since skilled nursing facilities and nursing facilities often receive payment for this care from third-party payers, such as Medicaid.  The proposal reduces Medicare payment for hospice services under the routine home care level of care when furnished in skilled nursing facilities to account for separate Medicare and Medicaid payments already provided for personal care services in the facility.  The Administration believes reducing the payment rate will align hospice payment between nursing facilities and other settings, and reduce the incentive for hospices to seek out beneficiaries in nursing facilities.  The modification is estimated to save $4.5 billion over 10 years.

Enhance Quality Improvement Oversight of Post-Acute Care Facilities and Hospice Providers

When a hospice or inpatient rehabilitation facility has a serious deficiency, CMS’s only recourse is the drastic step of terminating them from Medicare.  The proposal allows CMS to implement intermediate remedies on hospices and other post-acute care facilities, such as levying civil monetary penalties.  The Administration claims the approach offers CMS a greater opportunity to address poor performance and quality of care concerns.

Improve Safety and Quality of Care by Publicly Reporting Medicare Survey and Certification Reports Conducted by Accreditation Organizations

Accreditation organizations currently do not make their survey reports and accompanying Plans of Corrections publicly available, and CMS is prohibited from disclosing the results of accreditation surveys that are not home health agency surveys or related to an enforcement action.  This proposal would provide CMS with the authority to publish survey results for all accredited facilities, including hospitals, hospices, ambulatory surgical centers, outpatient physical therapy and speech language pathology services, and rural health clinics. The change is an effort to increase transparency and accelerate value.

Survey and Certification

The Budget requests $442 million for Survey and Certification.  The Administration believes this level of investment will enable CMS to maintain non-statutory survey frequency levels to prevent serious violations of safety standards and avoid patient harm.  Survey volume and cost are said to have increased due to the growing number of participating facilities, higher levels of complaints, and increasing costs to conduct surveys.

Approximately 90 percent of the request for Survey and Certification will go directly to State Survey Agencies to perform health and safety oversight of Medicare certified providers.  CMS expects states to complete over 25,000 initial surveys and re-certifications and over 65,000 visits in response to complaints in FY 2021.  Surveys include mandated federal inspections of long-term care facilities (i.e., nursing homes), home health agencies, hospices, and federal inspections of other key facilities.  All facilities participating in the Medicare and Medicaid programs must undergo inspection when entering the program and on a regular basis thereafter.  CMS is implementing a new five-part strategy to ensure quality and safety.  The strategy includes survey and certification improvements such as enhanced oversight of the State Survey Agencies that perform nursing home surveys, timely response to patient quality complaints, greater transparency about nursing home performance, and development of outcomes-based quality measures.

The Budget requests two year budget authority for the Survey and Certification program.  The Administration believes the request increases administrative flexibility, enhances oversight and quality of care, and ensures funds are available early enough in the state FY to enable more effective planning, staffing, and funding of survey agencies to accomplish required survey workloads.

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