MedPAC urges co-pays for home health care

Washington -- The Medicare Payment Advisory Commission has recommended more beneficiary cost-sharing for home health to address concerns about rises in utilization and spending in that sector of the Medicare program.

MedPAC's annual March report to Congress suggests establishing a $150 co-pay per episode of home health care that is not preceded by hospitalization or a post-acute facility stay. Enrollees currently do not have a co-pay for these services. Recommendations by MedPAC are nonbinding, but Congress considers the panel's advice when enacting Medicare legislation.

The recommendation would address rising costs in the program, the commission states.

The report notes that a $150 co-pay per episode would amount to about $9 per visit, and Medicare would continue paying the majority of expenses. Co-pays would apply to most home health cases, as the majority of episodes are not preceded by a hospital or post-acute facility stay, MedPAC says.

There remains some concern that the co-pay could fall on a vulnerable segment of the Medicare population, MedPAC Chair Glenn Hackbarth said at a March 15 House hearing on the report. However, the commission believes it tailored the co-pay so it's not too high as to reduce necessary access, but still high enough to discourage the use of home health when the services are of low value to the patient.

AARP has come out against the recommendation. "While some of MedPAC's other proposals for home health care address the root cause of rising costs, adding a co-payment would simply shift costs to vulnerable seniors who often don't have the resources to compare alternative treatments," the association said in a statement.

The report suggests the Dept. of Health and Human Services and the Office of Inspector General scrutinize counties with aberrant home health utilization, begin a two-year rebasing of home health rates in 2013 and eliminate the market basket update in 2012. The panel also calls on policymakers to revise the home health case-mix system to rely on patient characteristics when setting payment for therapy and nontherapy services.

In addition, MedPAC recommends that lawmakers or the administration:

• Increase hospital inpatient and outpatient rates by 1% in 2012.
• Increase physician rates by 1% in 2012.
• Increase ambulatory surgery center rates by 0.5% in 2012.
• Increase hospice rates by 1% in 2012.
• Establish a quality incentive program for skilled nursing facilities.

The March MedPAC report is available online (link).