The theme of this week is payment.

First, I’ve been paying close attention to a recent investigation by the Office of the Inspector General, which found that the three largest Medicare Advantage organizations (MAOs) denied post-acute services at higher rates than their smaller peers. Even more interestingly, MAOs collectively overturned 36% of long-term care hospital (LTCH) denials and 43% of inpatient rehabilitation facility (IRF) appealed denials. According to the OIG, those reversal rates suggest that some beneficiaries were initially denied medically necessary care.

The patient-access implications are troubling, but there’s also an important takeaway for home-based care providers. When Medicare Advantage plans deny admission to an LTCH or IRF, hospitals still need somewhere to discharge those patients.

“For the patients who did not appeal LTCH or IRF denials, they may have requested a lower level of care (e.g., SNF care or home health), paid for LTCH or IRF care out of pocket, or gone without post-acute care,” the report states.

While most patients with a medical necessity for IRF or LTCH care would be too complex for home health to be a viable alternative, I think these patients could be diverted to a skilled nursing facility (SNF) and then subsequently to home health. In these situations, the home health providers should expect patients with significant clinical needs – and a higher risk of hospital admission or readmission.

More Medicare Advantage news came this week when I covered a recent HHCN survey showing that more than half of respondents reported that Medicare Advantage is the payer type exerting the most pressure on their organizations. This serves as a reminder of why it’s critical to pay attention to news like the OIG’s investigation. 

The last reason this week is all about payment, for me, is that HHCN’s Payer Summit is happening today, with a full day of panels and networking. I’m moderating panels with compelling speakers, all about what matters in home-based care payment today. 

With all this in mind, I’ll share my top takeaways from the OIG’s report in this week’s exclusive, members-only HHCN+ Update, offering analysis and key takeaways including:

– What the OIG’s findings mean for acuity and referral processes

– What this says about Medicare Advantage in the home health industry

– What really matters in home-based care payment

What the OIG’s findings mean for home health

Prior authorizations are a burden across the health care system – I recently heard this firsthand in a conversation with my sister-in-law, a palliative pediatric doctor whose work includes home hospice visits, about how much time she spends dealing with administrative burdens like prior authorizations.

The OIG report underscores that prior authorizations are not just a headache for doctors; they are systematically limiting care. The OIG called the pattern of the largest MA plans refusing some patients’ medically necessary inpatient services “concerning.” To combat such a pattern, the OIG recommended that CMS regularly collect request-level prior authorization data, including service type and contractor information, and assess why the largest MAOs are denying and overturning LTCH and IRF services at rates higher than their peers.

The variation is wild: IRF overturn rates ranged from 14% to 86%, depending on the Medicare Advantage plan.

I can see a world in which prior authorizations reshape post-acute referral patterns. If a hospital starts pursuing an inpatient placement only to receive a denial and be forced to pivot, home health providers may have to start care even sooner than is normally expected and coordinate services on short notice. This is not an easy task to do in an industry that is chronically struggling with staffing.

Most critically, it ups overall patient acuity level. Home-based care providers have increasingly been dealing with more acute patients, and this trend, recognized by the OIG, likely has something to do with it. Higher acuity means more intensive clinical care, which requires greater staffing and increases operational risk. Patients are more likely to experience complications, emergency department visits or readmissions. And reimbursement doesn’t always increase in proportion to patient complexity.

The OIG report initially suggests a tale of greater volume, but upon reflection, demonstrates the industry’s pathway to increased complexity, risk and not necessarily getting paid to take on those burdens.

But providers are concerned about MA for a slew of reasons, not just rates. Respondents to HHCN’s survey also cited administrative burden, prior authorization delays and denials among their biggest Medicare Advantage challenges.

In many ways, the OIG report puts data behind those frustrations. Prior authorizations are reshaping how patients receive care, and home-based care providers are increasingly the ones absorbing the consequences of those decisions, whether that means taking on higher-acuity patients or managing more complicated hospital transitions on a compressed timeline and at lower rates than Medicare fee-for-service.

Taking the OIG report and the survey into consideration, what’s clear to me is that the home health payment landscape can only be understood holistically, as part of a larger story about how the growth of MA is reshaping care pathways, clinical models and financial sustainability. 

With that in mind, I’m heading back to HHCN’s Payer Summit, where many of these same issues will be front and center in the conversations. If this week has reinforced anything for me, it’s that payment remains one of the defining stories shaping the future of home-based care.