Policy Opportunities To Expand Home-Based Care For People With Complex Health Needs
Home-based care is an important and undertapped modality for providing care to millions of people in the United States who are unable to access or have difficulty obtaining care. This type of care is especially important for individuals with complex medical conditions requiring more specialized care and management. Interest in providing care in the home setting has accelerated during the COVID-19 public-health emergency (PHE) as policy makers, providers, and payers quickly pivoted to support care outside of facility settings, such as telehealth or in-person care delivered at home.
However, the home setting remains unevenly used and underutilized. Despite evidence indicating overwhelming patient preference for home-based care, the majority of the seven million Americans eligible for home-based care do not receive these services due to provider shortages, coverage barriers, and payment challenges. This mismatch between the demand for home-based care services and the current level of home-based care provided disproportionately affects individuals residing in communities that are economically and socially marginalized. This gap was exacerbated by the PHE and will become more pressing as the US population ages.
At present, there is a unique policy window to address the gap in care by leveraging administrative interest (such as the Centers for Medicare and Medicaid Services’ (CMS’s) refreshed strategic vision) and legislative momentum to expand home-based care at the federal and state levels. In this article, we assess near-term policy opportunities and provide strategic recommendations for policy makers seeking to expand home-based care for patients with complex needs. Through interviews with leading experts, policy makers, payers, and providers, we developed technical policy recommendations that can improve home-based care through value-based payment (VBP) models implemented by the Center for Medicare and Medicaid Innovation (the Innovation Center), traditional Medicare, Medicare Advantage, and Medicaid programs. This article synthesizes our findings and provides a high-level overview of immediate policy options to strengthen home-based care models.
Opportunities To Improve Home-Based Care through Value-Based Payment
Our recommendations focus on ways to expand home-based care to address the needs of the whole person. People who could benefit from home-based care—those with complex medical conditions—often have needs that change over time, requiring fluctuations in intensity and duration of services. For instance, a patient with a degenerative condition involving periods of remission and relapse requires both sustained longitudinal care and care management as well as more intensive, specialized care during acute periods. Payment and care delivery models should be responsive and adaptable to this variability to support continuity in care as services and patient acuity changes.
Predominant fee-for-service-based payment arrangements are ill-suited to achieve these goals. Providers operating under fee-for-service are often undercompensated for travel time, not reimbursed for many home-based services, and face additional administrative burdens from billing and coding practices. Since revenue in fee-for-service is determined by the volume of patients seen, providers have less financial support to conduct home visits, given that home-based care providers travel up to two hours a day to deliver care and therefore see fewer patients compared to office-based providers.
VBP models have increasingly been seen as a mechanism to overcome the limitations of fee-for-service and better support and advance home-based care services for people with complex health and social needs. VBP models afford flexibility for providers to deliver care tailored to patient need while ensuring accountability for patient outcomes across the full continuum of care. By holding providers accountable for the cost and outcomes of providing care, VBP models can also encourage health providers to appropriately target the level of care to match the needs of the home-based care population, many of whom require substantial health care services.
There is little coordination across existing models that do pay for home-based care, which perpetuates fragmentation. For example, Independence at Home is a home-based primary care model for fee-for-service Medicare beneficiaries with multiple chronic conditions and functional limitations; Hospital at Home allows patients to receive certain inpatient care at home and was rapidly expanded during the pandemic by CMS and other payers. These programs have been integral for serving populations with complex health needs but remain segmented from other payment models. The siloed approach to home-based care may not support patients adequately during transitions between types of care settings or when their needs change over time.
Therefore, the overarching objective is to ensure that home-based care is integrated into the broader health care system to provide coordinated and comprehensive care. As shown in exhibit 1, we identified four key areas to help achieve that objective: adapting existing VBP models to better support the nuances of home-based care; ensuring these models are accessible to small, independent care providers with limited resources; modifying technical components of existing models to account for the unique needs of individuals receiving home-based care; and strengthening the home-based care infrastructure by leveraging initial and ongoing flexibilities introduced during the COVID-19 PHE.
Exhibit 1: Policy opportunities to integrate home-based care into whole-person care
Source: Authors’ analysis.
Recommendation 1. Adapt Existing VBP Models To Achieve Whole-Person Care
Rather than create new models specifically for home-based care (which would silo home-based care further), interviewed stakeholders often emphasized that policy makers should leverage existing VBP programs in traditional Medicare (for example, Medicare Shared Savings Program [MSSP], Medicare Advantage, and Medicaid). This aligns with both CMS’s stated desire to streamline its existing portfolio and scale successful innovations through existing models and shift beneficiaries into value-based relationships.
One approach to embed home-based care is to develop a “sub-track” within existing population-based VBP models. The sub-track would be customized for people with complex health and social needs, such as the high-needs track of the newly announced ACO REACH model. This could help patients who require additional resources beyond those provided in general population-based models, enabling beneficiaries to seamlessly transition between the sub-track and the larger population-based model as their medical and functional requirements evolve over time. The sub-track would adapt technical model components (for example, risk adjustment, attribution) and modify evaluation components (for example, quality measures), as described below. The sub-track would benefit home-based care providers—who are often smaller practices more affected by cash flow disruptions—serving this high-cost, high-need population by coupling accountability for total cost of care along with predictable cash flows through per-member per-month payments.
At the state level, there are practical policy opportunities to implement VBP in Medicaid programs to provide home-based care. For example, states can leverage Medicaid managed care contracts to specify value-based payment models. Additionally, Medicaid programs can test home-based care payment reforms through section 1115 waivers, in addition to the section 1915(c) waivers that allow for more access to home- and community-based services.
Recommendation 2. Adjust Specific Technical Considerations For Home-Based Care
Although VBP arrangements are well situated to support the expansion of home-based care, there are technical components of existing models that must be adjusted to effectively care for people with complex health and social needs in the home setting. In general, risk-adjustment methodologies for CMS models may not adequately account for the needs of populations with complex health needs. Models using concurrent risk adjustment (such as those tested in the Direct Contracting—High-Needs Population Model) may be better for this population because they can account for patients’ varying level of need during the performance year. Other changes to risk adjustment are needed to account for this population’s needs, such as accounting for frailty and functional status.
Additionally, there are no widely used standardized quality measures that are inclusive of home-based care. For example, half of the quality measures selected for the CMS’s Merit-Based Incentive Payment System are unusable by home-based medical care providers. To effectively evaluate a model supporting home-based care, quality measures need to be adjusted to account for people with complex health and social needs. Examples of quality measures that can capture home-based care quality include fall rates, depression screening management, number of advanced directives in place, and days at home.
Recommendation 3. Support Small, Independent Home-Based Care Providers
Many home-based care providers belong to small, independent practices, which often lack access to the upfront funding and capital needed to engage in risk-bearing arrangements. This is a challenge beyond home-based care—for example, small, physician-led accountable care organizations (ACOs) have the highest dropout rate from risk-bearing arrangements. Given this, efforts to expand home-based care through VBP must account for the infrastructure investments needed to build the organizational capacity of home-based care providers.
One immediate way to invest in home-based care VBP is by providing upfront infrastructure investments (for example, for technology and care coordination), coupled with performance measures to ensure accountability, to home-based care providers. This approach is similar to the ACO Investment Model, which provided pre-paid shared savings for organizations participating in MSSP. States may also leverage the influx of federal funds authorized by Section 9817 of the American Rescue Plan Act (ARPA), which provides state Medicaid programs with a 10 percent federal medical assistance percentage increase to be used for home- and community-based services. This temporary increase in funding presents states with a unique opportunity for larger home-based care infrastructure investments that can lay the foundation for more sustainable, long-term opportunities for home-based care.
Another way for small practices to participate in VBP is by working with similar practices assisted by aggregators or enabler organizations. We see this commonly for ACOs, where 45 percent are small, physician-led ACOs. Aggregators manage risk and provide access to the resources and technical assistance necessary for participating in risk-bearing arrangements. While aggregators are leveraged in other programs, such as MSSP, they are not yet common among home-based care practices.
Recommendation 4. Creating The Foundation To Strengthen Home-Based Care
In addition to using VBP for expanding access to home-based care, there are other actions needed to provide the foundation for home-based care. For example, CMS implemented a range of temporary regulatory flexibilities during the COVID-19 PHE to rapidly expand providers’ ability to bill for telehealth visits, allowing providers to retain contact with patients when office visits put vulnerable populations at risk. CMS should consider making these flexibilities permanent (if found to be positively impactful) to support virtual care, with modifications to promote accountability, improve access to medically complex and vulnerable populations, and reduce chances for misuse or fraud.
In addition, the COVID-19 PHE exacerbated the national direct care workforce shortage, impacting the delivery of home-based care (especially for those with less caregiver support). Two-thirds of states reported permanent closure of at least one home- and community-based services provider during the PHE. To help address this shortage, states have used ARPA funding and existing levers in Medicaid programs to provide further investments in the direct care workforce. As an example, Tennessee’s Medicaid program includes comprehensive long-term services and supports (LTSS) workforce development as a component of their Medicaid VBP initiative, which aligns LTSS training with performance measures to reward program completion and high-quality LTSS.
Finally, there needs to be a standardized home-based care data strategy across CMS in response to the limited existing data on home-based care services. This strategy should include improvements to the data collected for home-based care (for example, who is receiving care), updated quality measures, and investments to data infrastructure (for example, admissions, discharge, and transfer systems), which could be supported through the temporary influx of federal funding through ARPA. Additionally, there is substantial opportunity to enhance data integration between Medicare and Medicaid to better serve people enrolled in both programs.
Conclusion
Recent policy activities and PHE-related responses have generated significant momentum for expanding home-based care services. As demand for these services continues to grow, policy makers should ensure that care delivery and payment models are capable of addressing the unique needs of people with complex health and social needs that would benefit from greater home-based services. Critically, home-based care must be integrated into the broader health care system to support continuity in care as services and patient acuity changes. We provide key areas that policy makers should consider to achieve that objective, including adapting existing VBP models to better support the nuances of home-based care, ensuring models are accessible to small, independent care providers, and leveraging regulatory flexibilities introduced during the PHE. Although additional actions may be required to strengthen home-based care in the long term, these immediate activities align with recent policy initiatives and can bolster a vital care modality that benefits millions of Americans.
Authors’ Notes
Dr. Saunders has a consulting agreement with Yale-New Haven Health System for development of measures and development of quality measurement strategies for the Center for Medicare and Medicaid Innovation alternative payment models under the Centers for Medicare and Medicaid Services contract No. 75FCMC18D0042/task order No. 75FCMC19F0003, “Quality Measure Development and Analytic Support,” Option Year 2. Dr. Bleser has previously received consulting fees from Merck for research for vaccine litigation unrelated to this work, from BioMedicalInsights, Inc., for subject matter expertise on value-based cardiovascular research unrelated to this work, from Gerson Lehrman Group, Inc., on health policy subject matter expertise unrelated to this work, and from StollenWerks, LLC, on health policy delivery system change unrelated to this work. He also serves as board vice president (uncompensated) for Shepherd’s Clinic, a clinic providing free health care to the uninsured in Baltimore, Maryland. Support for this work was provided by the Commonwealth Fund, the SCAN Foundation, and the John A. Hartford Foundation. We would like to thank members of our broader research team at Duke University’s Robert J. Margolis for strategic guidance and input, including Mark McClellan, MD, PhD, and Susan Dentzer, MS. In addition, we want to thank everyone who provided thoughtful discussions on the topics covered in this article.