Despite being a significant regulatory change to the home health care industry, some providers aren’t so sure whether the Home Health Value-Based Purchasing (HHVBP) Model will have that significant of a bottom-line impact.

The model is constructed in such a way where the very best performers receive the largest payment boost, with a maximum adjustment of 5%. The worst-performing providers, in contrast, are exposed to a 5% payment penalty.

All other agencies, in theory, should fall somewhere in between.

But that basic methodology isn’t so simple, according to providers who have experienced the model in demonstration states since 2016. The nationwide expansion is set for Jan. 1, 2023.

For instance, the North Carolina-based home health and hospice provider 3HC was in the top 50th percentile of providers based on performance in one of the HHVBP demonstration years. Yet it ended up getting a slight deduction in reimbursement – about a quarter of a percent.

“One year, we did get a positive adjustment, about 1%. And we had a really good year,” Dean Lee, the president and CEO of 3HC, said at Home Health Care News’ VALUE event last week. “So those adjustments are minimal in that sense. The only folks that are really going to take real hits, or get real benefit, are those in the 99th percentile, or the 1st percentile. There aren’t meaningful adjustments the way it’s designed today.”

Essentially, this problem derives from the weighting system the U.S. Centers for Medicare & Medicaid Services (CMS) uses.

“They’re going to continue to play this game,” Lee said. “And making it work out so there’s a zero gain for the vast majority [of providers].”

Others have found shared similar experiences.

Brent Korte, the chief home care officer for the Washington-based EvergreenHealth Home Care, went around explaining HHVBP to his employees in the most simple of ways: If there are 60 home health providers, the “bottom 30” are going to end up paying for the “top 30” providers’ increased adjustments.

While EvergreenHealth Home Care found success under HHVBP compared to state peers, increasing its star ratings and overall quality amid the demo, it didn’t see significant upside adjustments.

“We ended up pretty high above that middle point, but the problem was the graduating payments,” Korte said.

Next year will be the first program year under the nationwide HHVBP model, with the first year of financial adjustments being 2025. Under the demo, 2018 was the first year providers were exposed to financial adjustments.

The maximum payment adjustment was 3%, and then gradually climbed to 4% in 2019, to 5% in 2019 and to 6% in 2020. In 2021, providers were supposed to be able to achieve an upward – or downward – adjustment of 7%, but the demo was halted.

It was halted for a few reasons, the first being the ongoing COVID-19 pandemic. The other reason was that it has been decided that the model would be taken nationwide, after saving about $140 million per year for Medicare.

No matter the reason, it meant that providers that had worked hard for the 7% upward adjustment ultimately did not have the chance to be rewarded for their efforts.

“Our home health [represents] about $40 million,” Korte said. “[A possible bonus of 7% in 2021] would have been a heck of a good payoff, but we didn’t get it.”

EvergreenHealth had invested heavily in preparing for HHVBP.

It paid for significant training among its staff over many months. It also set a goal to certify every employee that touched an admission or a discharge OASIS and conducted OASIS coordination training programs as well.

Overall, it put well over $1 million into that training when it was all said and done. And the upward adjustments from the demo ended up coming in at more than $1 million as well.

“The end result for us was over a million bucks, except you have to pull out $240,000 … that they just decided to not pay,” Korte said. “But we put way more than a million into it.”

Based on EvergreenHealth Home Care’s math and HHVBP performance, the organization expected an upward payment adjustment of $240,000 in 2021. That bonus could have been diverted into additional training efforts or quality programs, but instead CMS “just decided to not pay” that amount out last year.

Don’t need to outrun the lion

During the demonstration, providers were competing against their state peers.

Beginning in 2023, there will be a much larger, country-wide competition pool. That has worried some industry insiders who believe geographic differences make competition unfair across the country.

“The key is, I don’t have to outrun the lion chasing me; I just have to outrun you,” Lee said. “So if you think about it, you’re chasing a moving target.”

In 3HC’s experience, the re-weighting of the system – which altered which scores or measures mattered most – hurt it as well.

For instance, the agency raised its total performance (TPS) score considerably during the demo, Lee said. But then a reweighted measurement moved the goal posts, so to speak, and made certain aspects more important in the overall picture. That, in turn, ended up shaking things up and taking money away that the agency could have made.

And while it didn’t mean the agency was pleased with that, it was able to recover by recalibrating its own processes.

“You don’t have to like the game, you just need to know how to play it and play it extremely well,” Lee said. “Complaining about it won’t fix it, but working on your own processes will.”

Korte agreed that looking within one’s own organization is where providers should start.

Especially when kicking off under HHVBP for the first time, equipping an agency’s entire team with the right knowledge – albeit sometimes fluid guidelines – is imperative.

“I said, ‘If we’re going to do this right, we need to create an army of experts,’” Korte said. “Our goal wasn’t about being really smart [just as] senior leaders. We took a very different approach, which was that we needed every soldier to be a general. And that did a lot of other things that are actually paying off today, in terms of keeping staff, et cetera.”

Patient versus provider responsibility

A final concern related to HHVBP, or any performance-based models, is that a lot of what makes a patient better is what the patient does.

Home-based care providers can tend to do far more for the patient than some others may be able to because they are in the home, but there is still the rest of the race to run.

In fact, Lee told an anecdote about his own mother receiving home health services from 3HC. She wasn’t doing what she was supposed to on non-visit days, which led Lee to jokingly say to his own mom, “You’re going to cause my scores to go down.”

But that is the reality.

“Today’s society is such that we consider it the doctor’s responsibility or the home health agency’s responsibility to care for [someone],” Lee said. “But you cannot afford to take care of a patient who will not accept accountability for their own care.”

What that could ultimately lead to is providers around the country selectively taking patients once HHVBP is in effect, which would be bad for the health care system overall and also bad for the most at-risk patients.

It could also be worse for nonprofit organizations, who tend to be more likely to take on the more complex patients as part of their ethos. 3HC itself is a nonprofit provider.

“This is not a nonprofit thing, for-profit thing, publicly traded company thing, a system-based thing or a private equity-backed thing,” Korte said. “We have to compete from a quality perspective, period, or you’re in deep trouble, period.”