Medicare Hospital-at-Home Extension Finds Support Amid Scrutiny

Congress and the medical community are working to extend a pandemic-era program that allows hospitals to bill Medicare for acute inpatient care provided at home, even though it’s unclear if it actually saves money and provides equivalent care.

The Acute Hospital Care at Home program waiver, launched in November 2020, is set to expire Dec. 31 unless Congress extends it for five years after already extending it in 2022. Varied health-care interests, think tanks and patient groups support the program that’s designed for beneficiaries sick enough to be hospitalized, but stable enough to receive intensive care at home.

Lawmakers from both parties are big supporters, with one proposal (H.R. 8261) advancing unanimously out of the House Ways and Means Committee. Other bipartisan bills, (H.R. 7742) and (S. 3756), would allow observation-status beneficiaries to also receive hospital care at home under a two-year pilot program.

“These are patients who don’t quite meet the criteria to be admitted inpatient but have a diagnosis that is consistent with receiving care at home,” Rep. Kathy Castor (D-Fla.), said during a recent House Energy and Commerce Committee hearing in which legislation to implement the five-year extension (H.R. 7623) was advanced. “I’m an ardent supporter of this,” said Castor, a sponsor of H.R. 7742. “It really helped revolutionize care during the pandemic when we needed to find a way to treat critically ill patients outside of hospitals.”

That kind of enthusiastic support, both for the care concept and the extension, could help the US close the gap with other countries like the UK, Australia, and Canada that have had hospital-at-home programs for decades. As millions of aging baby boomers put more stress on limited hospital-bed space, the need for at-home care will only grow in coming years.

But questions remain about the program’s cost, effectiveness, and its impact on uncompensated family caregivers.

‘Toxic Positivity’

Sachin Jain, president and CEO of SCAN Health Plan, says policy makers and fellow program supporters should tap the brakes on the “toxic positivity” surrounding the hospital-at-home (HaH) movement.

“I just think that sometimes in the course of launching new programs, there’s a bit of toxic positivity that ‘everything is better’ and nothing is worse,” Jain said. “And I’m just trying to inject a dose of realism, which is that there are some real-world patient challenges associated with the program.”

While the program guidelines don’t call for family members to provide supplemental care for beneficiaries, Jason Resendez, CEO of the National Alliance for Caregiving, said that’s unrealistic. Family members have reported not even knowing their loved ones were part of the hospital-at-home program as they were “left navigating all of this additional care that’s taking place in the home,” he said.

“So, clearly while the expectation is not there,” for family caregiver support, “in reality, we see it playing out,” Resendez said. “We need to better understand that in a rigorous qualitative and quantitative way.”

The Bipartisan Policy Center and AARP have recommended that the CMS develop metrics for evaluating the experiences and impacts of family caregivers in the program.

Before the CMS waiver, there were roughly 20 hospital-at-home programs in the US. As of Oct. 3, 364 hospitals in 39 states had been approved for the program by the agency. Program patients receive two in-person nursing visits and one physician visit each day. Remote patient monitoring devices are standard equipment.

Many studies have shown the programs can lower costs, provide low mortality rates, and provide shorter stays with fewer readmissions. But with the programs’ limited footprint nationally, it’s unclear whether the promising metrics would translate to a larger sample size.

The Medicare Payment Advisory Commission reported in June that the CMS program’s “cost per unit of service may be higher” than traditional inpatient care “due to the additional costs and inefficiencies of providing care to patients in their homes,”

Whether the program “can provide value to beneficiaries and the Medicare program—through better outcomes and reduced Medicare expenditures for follow-on care—has yet to be conclusively determined,” the commission report said.

Payment Rate Debate

Jain said the program should receive 70% to 80% of the Medicare payment rate for traditional hospital care—not the same amount. Brick-and-mortar hospitals provide a controlled environment and 24-7 staffing that puts emergency assistance just seconds or minutes away, he said.

“It just makes you scratch your head,” jain added. “If I’m getting less of all these things, why is this priced at exactly the same price?” The “lower level of overall service capability” in at-home hospital care “should be built into the pricing,” he said.

Extending the five-year hospital-at-home waiver would provide more time to determine the appropriate payment rate, but 70%-80% of the current rate “is too low and suggests a fundamental misunderstanding of what HaH care is and what it takes to provide it,” said an email from Bruce Leff, a geriatrician and researcher at the Johns Hopkins University School of Medicine.

Services like physical therapy, nursing visits, and delivering and administering IV medications, “are actually more expensive to provide in the home due to travel time and logistic issues,” Leff said.

And unlike traditional hospitals, most hospital-at-home payments go to the “direct costs of care rather than the fixed costs to support the bricks-and-mortar facilities,” said Leff, who developed the basic clinical model for one of the nation’s first hospital-at-home programs while at Johns Hopkins in the mid 1990s.

Depending on the program size, Leff said it can cost a hospital several million dollars or more to get an at-home program up and working.

That may be why only 105 of 285 hospitals approved for the program in 2022 reported any volume that year, the Medicare commission reported recently. While the program discharged 6,200 beneficiaries in 2022, only about 37% of participating hospitals had at least one discharge. The 26 largest programs—with 75-plus discharges—accounted for 71% of volume, MedPAC reported.

Logistical and technical challenges during the pandemic may have kept hospitals from standing up programs, said Jennifer Holloman, senior associate director of payment policy at the American Hospital Association.

But without the extension, hospitals and health systems “may be reticent to make that investment without some certainty that there will be a continuation of the waiver,” she said.

Lower Mortality Rates

A new study by the Biden administration found beneficiaries in the program had lower mortality rates and slightly lower hospital-acquired infection rates than their inpatient counterparts.

While care episodes in the program were slightly longer than traditional hospital stays, program patients used fewer services, like physical therapy, lab tests, and imaging.

Program enrollees also had lower post-discharge medical costs, which suggests “hospitals may incur lower costs over time for the provision of care” to program patients, the study found.

However, “statistical bias” attributable to the program’s patient selection criteria, and “differences in clinical complexity” as measured across the two comparison groups, “make it difficult to definitively conclude” that beneficiaries in the program had “lower Medicare spending overall than the brick-and-mortar inpatient care group,” the study found.

—With assistance from Ganny Belloni