Articles-Thought Leadership Five Factors Changing the Delivery of Care | Page 4

Changing Payment Models
The Bipartisan Budget Act of 2018, signed into law in
February, calls for a new pay model for home health
services. Instead of basing payments on the number
of therapy visits a patient receives in a 60-day period,
the new Patient-Driven Groupings Model (PDGM)
pays for 30-day periods of care without regard for
the number of therapy sessions. If the rule is finalized,
the PDGM is expected to go into effect in January
2020. This would result in a 2.1% increase or $400
million more in home health payments, a sea-change
from last year’s 0.4% cut of $80 million.
In the last ten years, managed care has grown
significantly. Medicare Advantage (MA) has increased
from 22% of beneficiaries in 2008 to 34% today. By
2026, this is projected to rise to 41%. As managed
care grows, and contract requirements change, care
continuum providers will need to shed their fee-for-
service mentality and aggressively pursue more
managed care contracts. Although most Medicare
payments are still tied to fee-for-service, HHS has set
a goal of 50% of Medicare payments from alternative
payment models by the end of 2018.
In a recent statement announcing the annual home
health payment rules, CMS Administrator Seema
Verma said, “The redesign of the home health
payment system encourages value over volume and
removes incentives to provide unnecessary care.”
As managed care grows, and
contract requirements change,
care continuum providers will
need to shed their fee-for-service
mentality and aggressively
pursue more managed
care contracts.
The healthcare industry will
be forced to innovate beyond
traditional home health,
skilled nursing, and hospice, by
developing and offering new
medical services to manage
conditions previously addressed
at acute care facilities.
The Medicalization of Senior Living
The Assisted Living Federation of America reports the
average age of an assisted living resident at 87 years
and rising. Advanced age increases the likelihood of
chronic conditions such as heart failure, diabetes,
COPD, and dementia, all of which require more
intensive medical services, even as residents age in
place. Patient safety concerns also increase.
As a result, the healthcare industry will be forced to
innovate beyond traditional home health, skilled
nursing, and hospice, by developing and offering new
medical services to manage conditions previously
addressed at acute care facilities. Physicians, nurse
practitioners, and physician assistants will need to
manage a greater variety of medical conditions
through onsite care. At present, only a few nursing
homes offer in-house lab and radiology; this may
become the norm as VBP incentivizes providers and
facilities across the continuum of care to prevent
unnecessary transfers to hospitals.
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