How Home Health’s Value-Based Purchasing Model Could Further Reduce Nursing Home Utilization

As patients continue to seek out ways to be cared for in the home over more institutional settings like nursing homes, an impending nationwide rollout of the Home Health Value-Based Purchasing (HHVBP) Model may dwindle managed care relationships and drive care further away from SNFs.

Results from a nine-state, five-year demo of HHVBP showed a 0.34 percentage-point decline in SNF use per year among home health beneficiaries. ​​

That corresponds to a 6.9% decrease in average measure values relative to pre-HHVBP implementation, as previously reported in sister publication Home Health Care News.

An annual evaluation of the model recognized the SNF decline, prepared and published in April by the Arbor Research Collaborative for Health and L&M Policy Research.

Brian Fuller, CEO of Integrated Care Solutions, a care management and care coordination company, told Skilled Nursing News that model’s primary impact the industry stems from less patients being eligible for a nursing home stay if there aren’t as many being readmitted to the hospital – one of the HHVBP’s quality metrics.

“It changed their care delivery patterns such that the frequency of patients who were cycling through the system decreased and therefore, there weren’t as many people readmitting back to hospitals, and there weren’t as many patients eligible for a subsequent SNF stay,” explained Fuller.

HHVBP prevented that cycle from perpetuating at the same rate it does in markets where the model wasn’t being tested, he added.

“What these programs do, which I think is their intent, is they create this hyper focus on the quality metrics … It causes [clinical leaders] to rethink the way that they deliver care,” Fuller said.

The report also found an increase in skilled nursing and therapy visits during the early weeks of a home health episode, another key takeaway for SNF operators, Fuller noted.

The process is called “front-loading” among home health care agencies, when a large portion of visits take place within the first few weeks of a 60-day home health care episode.

“We know from experience that starting care within 24 to 48 hours and front-loading that home health episode tends to create a smoother transition of care and stabilizes the patient,” he said. “Home health has a lot of influence over when [patients] start care, how they distribute the visits over the home health episode.”

HHVBP implementation also led to $201.2 million in Medicare savings specifically tied to SNF usage between 2016 and 2020, according to the report. That’s a 4% decline in SNF service spending on average.

If a nine-state demo can save $201.2 million in Medicare dollars that would normally be spent on SNF stays, a 50-state model could shift hundreds of millions – or billions – away from institutional care settings for years to come. It could be a significant macro-level consequence of value-based purchasing, if the trend continues into 2023 and beyond.

“The declines in overall Medicare spending due to HHVBP continue to be largely driven by reductions in spending for inpatient and SNF services among home health beneficiaries,” the report authors confirmed.

There was a 2.8% decline in average Medicare spending per day for inpatient services, which translates to $546.8 million in savings. The model is estimated to have saved Medicare $949.2 million in total, according to the report.

The report also found HHVBP plans saw an uptick in short-stay patients with heart failure, and more significantly knee and hip replacements, in turn leading to a decrease in SNF use for these types of patients.

Authors pointed specifically to the three-day stay requirement as a factor in this shift of short-stay patients from SNFs to home health, despite the requirement being waived as a result of the public health emergency (PHE) starting in 2020.

Next year is set to be a “performance year” for the HHVBP Model expansion across 50 states, according to the Centers for Medicare & Medicaid Services (CMS), while 2025 will be the “payment year,” when home health participants will receive payment adjustments based on performance quality measures.

For nursing home operators, such statistics could reshape post-acute and long-term care landscapes, as policymakers and the Biden administration continue to advocate home-based care while seeking extensive reform to the SNF sector.

“Our findings that HHVBP has decreased unplanned hospitalizations, ED use resulting in inpatient admission, and SNF use aligns with the intentions of policymakers to incentivize HHA activities that reduce unnecessary acute care use,” authors said.