This week NAHC is holding a conference in Washington D.C. centered on Advocacy Day (April 16-17). Representatives of NAHC and others will attend this conference to share information regarding the current issues facing home health providers. Specifically, the conversation will most likely focus on the financial issues facing these providers and the decisions being made by CMS that are jeopardizing the future of the industry.
Last October, I began my effort to share what I have learned about the financial health of HHAs through cost report data by creating a website and blog to share this data and my conclusions. I posted articles weekly, this is the 26th one, dealing with the issues I had found. None of this data was new to me, I have been looking at it for years. What I did discover, that I did not know before, was the extent that the CMS proposed rules and the MedPAC reports distorted the same data to represent a totally inaccurate picture of the financial health of these agencies.
Although all payer margins are the primary measure used to describe the financial position of hospitals, this measure is omitted from the analysis of home health. We all know why.
In July, both CMS and MedPAC will repeat these errors when they once again report on the health of HHAs using cost report data from 2022. This is data I have already seen and reported on in my blog. Data that shows these margins under Medicare and MA dropping rapidly. Data that shows below cost reimbursement under MA and agencies reporting losses through the cost reports rising from 32.37% in 2021 to 38.15% in 2022.
On 2/27/24, Bill Dombi of NAHC and Joanne Cunningham of Partnership for Quality Home Healthcare submitted a letter to the administrator of CMS (Chiquita Brooks-LaSure). This letter makes many of the same points, without numbers to accompany them. The picture they describe is bleak, but entirely accurate. In the letter, they ask CMS to reconsider their cuts they will propose and consider the impact they will surely have in driving a struggling industry further toward disaster. They point out that the window of opportunity to do this is this summer, before a decision is made in the final rule.
When I began my blog, I thought that my content might provide help in convincing these organizations about the truth of what was happening. Those of you who have read it understand that I believe in the accuracy of my representation of the data and the truth in the picture it portrays in stark contrast to the data provided by CMS and MedPAC.
As an owner of a software company, I developed revenue cycle products for healthcare providers. My projects were developed when I saw an opportunity to provide tools that would assist providers in processing these transactions. Over my 32 year career running my company, I developed some products that were very successful and many more that were not. One of the things I learned was the value of discovering the difference as soon as I could and acting on it. An important part of this process was understanding when I was failing and learning to either let go of the project or alter your strategy by changing it.
When I look back at my blog, I have few regrets or mistakes I have made that I would change now. Since I have been doing this for six months, I thought an evaluation of this effort was overdue. How could I measure success regarding the blog and my goals I hoped to achieve in writing it?
The most important measures of success would be how many people have read this? How many people have interacted with me after reading my content? Has this blog made any difference on these issues? By all of these measures, it has been a failure. Some might argue that I have not been patient and that it takes time for these efforts to produce results, but I don’t see that we have the time to be patient. If this CMS process repeats for 2025 as it has since 2020, these new cuts might be what it takes to wipe out a significant portion of the remaining HHAs, especially the small ones in remote areas.
As was pointed out in the letter, the window of opportunity is this summer, a comment period after the proposed rule is published. If I continue my current strategy and continue to post weekly articles dealing with these issues topic by topic, I should expect the same results that I have seen over the last six months. The data I have uncovered will continue to be invisible to CMS and industry advocates that need to convince CMS to change their behavior. These advocates will continue to try to convince CMS and congress to let up through anecdotes, conversations, email campaigns and advocacy gatherings like the ones being held this week.
If these groups and individuals were to apply the same analysis to their strategy, they might also reach a similar conclusion that I have. These strategies are not working and we need to try something else.
My analysis regarding my lack of success is that I have not failed in producing convincing and accurate data, I have failed in delivering it to the right people and convincing them that it is accurate. In other words, my problem is not in the message, but the messenger.
During the last couple months, I have managed to engage with some industry leaders on this content. They have encouraged me to continue with the blog and my efforts to convey this information, but they are reluctant to promote this data themselves since it is in stark contrast to what they see elsewhere and are told by much larger organizations.
These individuals have significant followings in social media and are regularly interviewed by HHCN and appear as speakers at many functions dealing with these issues. What they have to say is heard by thousands of providers, their employees and their associates. Instead of trying to convince an “audience” that my information is real and accurate, my new mission is to convince some of these individuals.
To accomplish this, I am going to write my own report using cost report data. This report will include an accurate description of profit margins for HHAs and include the impact of MA. Instead of convincing these individuals of the accuracy of this data for all HHAs, I am going to use my data model to describe their agencies through their own cost reports. If I can convince them that their own data is described accurately first, I might be able to convince them that if I calculate all cost reports the same way, the total picture should be accurate as well.
I have found providers that are willing to help me with this. I will begin meeting with them next week. I am not going to mention them here until the report is finished and they are willing to back the results. These providers are associated with NAHC and if they can be convinced that this representation of HHAs is real, NAHC and others might be convinced as well. If we can make this happen, then this report can represent the data needed to back up the words in the letter described in this post. With data in contrast to what is provided by CMS and MedPAC and full transparency regarding how it was compiled and developed, HHAs might finally have the “weapon” they need to fight back.
If I really want to make this happen, I need to assume the role of the blacksmith. With the help of industry experts who have the ear of others and CMS, we can forge this weapon to their needs. The metal is the cost report data and the forge is the Sisense BI environment. When the weapon is ready, it should not be in my hands, but the hands of the people who know how to wield it. This needs to happen by July to have an impact in 2025. This week, the cost report data will be updated to the version that will be used by CMS and MedPAC in their July reports. I plan on starting this process now.
This will take a significant effort on my part, but I have the time and the skills to get it done. It remains to be seen if I can convince others to work with me to the completion of this project or if they can be convinced to believe and endorse its results. That will be on me.
This process will take precedence over this blog so it is unlikely that I will be able to continue weekly posts, but if you don’t hear from me, know that I have not given up. I plan on keeping a diary as I work on this project and I will post it when the report is ready. It will include descriptions of problems I encounter and how they are solved.
If any of you read this and would like to participate, your role would not require a lot of work. I simply need to review your cost reports in my data, share it with you as a spreadsheet. You will then tell me if it accurately represents the data you submitted to CMS and if I am accurately calculating your profit margins. I can be reached by email at kaloncon@gmail.com.
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