Publication
Article
The American Journal of Managed Care
Overcoming Challenges to Optimize the Clinical and Financial Benefits of In-Home Rehabilitation Services
Author(s):
The authors advocate for the implementation of value-based principles to address the underutilization and limited supply of home care and rehabilitation services.
Driven to some extent by the COVID-19 pandemic, programs redirecting patients from inpatient postacute care services, such as skilled nursing facilities or inpatient rehabilitation, to in-home rehabilitation solutions have expanded in number and in the scope of services provided.1 Available research suggests that this shift satisfies patients’ preferences to remain at home while also delivering comparable patient-centered outcomes.2 The advantages to patients are clear but from a payer perspective, home care and rehabilitation services are favored because they achieve similar quality and reduce total spending, as inpatient postacute care is 3 to 4 times more costly than care provided at home.3 The move away from inpatient postacute care toward home care is also attractive to providers in value-based payment arrangements (eg, accountable care organizations) that offer incentives to reduce the total costs of care while improving or maintaining quality.
In this issue of The American Journal of Managed Care (AJMC), Johnson and colleagues report an evaluation of a high-intensity home-based rehabilitation (HIHR) program for a specific subgroup of hospitalized patients for whom rehabilitation was indicated but clinical deficits were not significant enough to impede home discharge (ie, 30-day readmission risk < 35%).4 HIHR supplemented traditional home health care with more frequent visits that included services that would be provided at a skilled nursing facility and incorporated personal care services such as cooking, cleaning, and bathing. Those who participated in HIHR had improved functional outcomes and incurred lower costs. These positive findings are consistent with those of the randomized trial by Rowe et al published in AJMC demonstrating that a well-designed, personalized care management program delivered to carefully selected high-risk Medicaid beneficiaries can result in substantially better clinical and financial outcomes.5 These improvements, combined with the equity-enhancing features and environmental sustainability benefits attributable to home-based care, make an overwhelmingly positive case for more widespread adoption. However, despite robust evidence suggesting that these in-home services produce a “win-win-win” for patients, payers, and providers in risk-based contracts, it comes as no surprise that the illogical incentives entrenched in the US health care system present multiple barriers to broader adoption.
Challenge 1: Medicare’s current models tie postacute reimbursement to the physical location—not intensity—of care provided.Thus, current financial incentives favor inpatient rehabilitation services and discourage investment in home care. Johnson and colleagues note that the implementation of HIHR was financially feasible in their institution because the in-home program was a component of the integrated health delivery system that owned its hospitals and participated in a shared savings payment model such that the less expensive home-based postacute care was an attractive financial option.4 Only in these (rare) circumstances are the incremental resources accessible to develop and administer an HIHR program with the hopes of future savings to justify the investment. One potential solution to this “chicken and egg” problem is to abandon the policy that sets reimbursement rates for rehabilitation services based on where the care is provided and instead set a policy that ties payment to care intensity. Such a change would make programs such as HIHR more fiscally feasible and sustainable.
Challenge 2: Patients’ out-of-pocket costs deter the use of rehabilitation services.In our recently published study in AJMC, we reported that the patient out-of-pocket (OOP) costs paid by commercially insured enrollees and Medicare beneficiaries with cost sharing were nontrivial, posing a potential barrier to use.6 Benefit designs that reduce patients’ OOP costs (eg, co-payments, coinsurance, and deductibles) for high-value clinical services (ie, value-based insurance design [VBID]) have mitigated cost-related underutilization. Private and public payers have lowered cost sharing for cardiac rehabilitation in VBID programs, including 2 federal policies implemented during the first Trump administration: (1) US Department of the Treasury Notice 2019-45 allowed health savings accounts/high-deductible health plans to cover specified medications and services, including cardiac rehabilitation, used to treat chronic diseases prior to meeting the plan deductible; and (2) the 2021 HHS Notice of Benefit and Payment Parameters Final Rule enthusiastically supported VBID principles and recommended the elimination of cost sharing on high-value services—including cardiac rehabilitation—in Marketplace health plans.7,8
Challenge 3: Workforce shortages. The growing aging population has increased demands for home health care and rehabilitation services, but the requisite workforce has not met the growing need.9,10 Outpatient rehabilitation services are similarly constrained, with current capacity unable to service 50% of patients eligible for cardiopulmonary rehabilitation.11 These shortages are in part driven by reimbursement levels that are not commensurate with the clinical value provided. Johnson et al point out that under the current Medicare reimbursement structure, home health agencies were not appropriately incentivized to provide more frequent home-based services.4 Rehabilitation services are similarly undercompensated, and expanding current facilities may actually lead to lower reimbursement through regulations that would downgrade payment due to the change in designation of the facility as an outpatient provider.12 Although these lower costs may be more attractive to payers and providers under value-based contracts, payment policies that incentivize, rather than inhibit, more personalized and intensive home-based rehabilitative services are necessary to ensure that their growth meets population needs.
Challenge 4: Telehealth’s uncertain future. It remains unclear what long-term role telehealth will play in the provision of home care and rehabilitation services. The telehealth upsurge resulting from the COVID-19 pandemic and subsequent public health emergency legislation that expanded telehealth payment fueled new delivery options. For example, home-based cardiac rehabilitation services for patients with recent cardiovascular events have been shown to produce equivalent clinical outcomes to those of traditional in-person sessions, and these are now considered a viable alternative.13,14 Although public health emergency legislation provided temporary Medicare payment for home-based cardiac rehabilitation and other telehealth services, permanent reimbursement for these services has not been guaranteed. Such uncertainty may stifle broader adoption. Although telehealth payments are likely to continue through 2027, permanent payment solutions for home-based rehabilitation services are greatly needed to ensure security in provider-based investments in telehealth infrastructure and virtual delivery models.
Although home care and rehabilitation services are clinically beneficial and economically advantageous for patients, payers, and providers enrolled in value-based payment models, several barriers must be addressed to diminish underutilization and the limited supply of these services. Implementing outcomes-based financial incentives for patients and clinicians, addressing workforce and capacity problems, and integrating telehealth solutions into home care and rehabilitation services are examples of necessary changes to accelerate their equitable broader provision. Given the severe unmet clinical needs of the most vulnerable members of our communities, expansion and rigorous evaluations of highly personalized, intensive interventions that ensure the right postacute care is provided by the right clinician in the right setting are warranted.
Author Affiliations: Department of Cardiac Surgery, University of Michigan (MPT), Ann Arbor, MI; Center for Healthcare Outcomes and Policy, University of Michigan (MPT), Ann Arbor, MI; Department of Internal Medicine, University of Michigan School of Medicine (AMF), Ann Arbor, MI; Division of Health Management & Policy, School of Public Health, University of Michigan (AMF), Ann Arbor, MI.
Source of Funding: None.
Author Disclosures: Dr Fendrick reports serving as a consultant to AbbVie, CareFirst BlueCross BlueShield, Centivo, Community Oncology Alliance, EmblemHealth, Employee Benefit Research Institute, Exact Sciences, Grail, Health at Scale Technologies,* HealthCorum, Hopewell Fund, Hygieia, Johnson & Johnson, Medtronic, MedZed, Merck, Mother Goose Health,* Phathom Pharmaceuticals, Proton Intelligence, RA Capital Management, Sempre Health,* Silver Fern Healthcare,* Teladoc Health, US Department of Defense, Virginia Center for Health Innovation, Washington Health Benefit Exchange, Wellth,* Yale New Haven Health System, and Zansors* (asterisks indicate equity interest); research funding from Arnold Ventures, National Pharmaceutical Council, Patient-Centered Outcomes Research Institute, Pharmaceutical Research and Manufacturers of America, and Robert Wood Johnson Foundation; and outside positions as co–editor in chief of The American Journal of Managed Care, past member of the Medicare Evidence Development & Coverage Advisory Committee, and partner at VBID Health, LLC. Dr Thompson reports no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.
Authorship Information: Concept and design (MPT, AMF); drafting of the manuscript (MPT, AMF); critical revision of the manuscript for important intellectual content (MPT, AMF).
Address Correspondence to: Michael P. Thompson, PhD, Department of Cardiac Surgery, Michigan Medicine, 2800 Plymouth Rd, NCRC Building 16, Room 138E, Ann Arbor, MI 48109. Email: mthomps@med.umich.edu.
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