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1 January 3, 2012 RE: Comments submitted at Marilyn Tavenner, Acting Administrator U.S. Department of Health and Human Services Centers for Medicare and Medicaid Services Attention: CMS-1345-P Mail Stop C Security Boulevard Baltimore, Maryland Dear Acting Administrator Tavenner: I am writing on behalf of the Visiting Nurse Associations of America (VNAA) to comment on the proposed Interim Final Rule, Medicare Program; Final Waivers in Connection With the Shared Savings Program [CMS 1439 IFC], issued on November 2, The VNAA exclusively represents nonprofit home health and hospice agencies throughout the United States. We appreciate the opportunity to comment on rules that govern new Accountable Care Organizations (ACOs) demonstrations. Medicare-certified home health and hospice agencies are an essential group of providers that will generate savings for ACOs and other demonstrations by providing health care in the home rather than in a more costly institutional setting. The Medicare Payment Advisory Commission, in a 2011 report, noted that in 2009, home health agencies served more than 3.3 million Medicare Beneficiaries while hospice agencies served nearly 1.1 million. Including home health and hospice agencies in a leadership role will therefore be critical to the success of any Accountable Care Organization (ACO) and should not be prohibited or discouraged by the Federal government. Language Clarifications Are Needed We are very concerned that language in the rule will have the unintended consequence of excluding Medicare-certified home health agencies from ACOs or discouraging their use. Specifically, the rule states: The parties to the arrangement may not include drug and device manufacturers, distributors, durable medical equipment (DME) suppliers, or home health suppliers. 76 Fed. Reg. at 68,000. The pre-participation waiver does not cover arrangements involving drug and device manufacturers, distributors, DME suppliers, or home health suppliers. Drug and device manufacturers and distributors are not Medicare enrolled suppliers and providers; DME and home health suppliers have historically posed a heightened risk of program abuse. 76 Fed. Reg. at 68,002. 1

2 The pre-participation waiver excludes drug and device manufacturers, distributors, DME suppliers, and home health suppliers. 76 Fed. at 68,005. We strongly urge that the final rule: 1) Clarify that the term home health supplier does not include Medicarecertified home health agencies or providers. 2) State, in a positive manner, that Medicare-certified home health agencies are fully eligible to participate as post-acute providers as specified in other sections of the ACO rule. 3) Create incentives and rewards (such as an increase in the percentage of shared savings) for ACOs that make Medicare-certified home health agencies a critical contributor along the same lines as an FQHC or RHC. VNAA notes that nonprofit home health agencies have not historically posed a heightened risk of program abuse. Instead, they have an outstanding track record of serving the most vulnerable and underserved patients, often avoided by other agencies, without regard for ability to pay. Excluding the participation of nonprofit home health agencies or discouraging their use in ACOs will certainly negatively impact access and care for such vulnerable patients. The short and long-term success of the new ACO model is dependent on mobilizing existing post-acute providers, including community-based Medicare-certified home health and hospice agencies, with the expertise needed to achieve success quickly in terms of meeting the needs of patients, ensuring quality and reducing costs. For that reason, we anticipate that many, if not all, ACOs will want to establish a relationship with an existing Medicare-certified home health agency. Why ACO Success Will Depend on Home Health Agencies ACOs will share in cost savings if they meet performance standards for both quality of care and cost savings. Home health agencies will undoubtedly play a key role in achieving success on key performance measures including but not limited to: Risk-Standardized, All Condition Readmissions; Ambulatory Sensitive Conditions Admissions: Chronic Obstructive Pulmonary Disease AHRC Prevention Quality Indicator (PQI) #5; Ambulatory Sensitive Conditions Admissions: Congestive Heart Failure (AHRC Prevention Quality Indicator (PQI) #8; Medication Reconciliation: Reconciliation After Discharge From an Inpatient Facility and; Falls: Screening for Fall Risk. 2

3 Conclusion We urge CMS to clarify the language to make it clear that Medicare-certified home health agencies are a key part of the post-acute care delivery system that ACOs should use to achieve their goals. We are concerned that failure to do might have a negative impact on the ability of ACOs to achieve their goals and on the use of Medicare-certified agencies in other healthcare demonstrations. VNAA May 2011 Comments on ACOs Re-Submitted As an attachment to this comment letter, we resubmit our comments made in May 2011, which provide further details on the importance of home health and hospice agencies in achieving ACO goals, the role of nurse practitioners and issues related to patient selection. About VNAA s Members VNAA represents only nonprofit providers who serve Medicare, Medicaid and other patients with chronic and often life threatening conditions, especially the provision of transitional care as well as chronic care management/care. Our members serve patients without regard to their profitability and provide charity services to the under-insured or uninsured as well as through community health and wellness initiatives. Thank you for the opportunity to comment on this important rule. If you have questions regarding these comments, please contact Kathleen Sheehan, VNAA s Vice President of Public Policy, at Sincerely, Andy Carter President and CEO Visiting Nurse Associations of America Attachment: May 25, 2011, Comment Letter from VNAA to CMS 3

4 Attachment May 25, 2011 RE: Comments submitted at Donald Berwick MD., Administrator U.S. Department of Health and Human Services Centers for Medicare and Medicaid Services Attention: CMS-1345-P Mail Stop C Security Boulevard Baltimore, Maryland Dear Dr. Berwick: I am writing on behalf of the Visiting Nurse Associations of America (VNAA) to comment on the proposed rule Medicare Shared Savings Program; Accountable Care Organizations (CMS-1345-P). The VNAA exclusively represents nonprofit home health and hospice agencies throughout the United States. We appreciate the opportunity to comment on this important component of the Affordable Care Act. The Accountable Care Organization (ACO) model brings together primary care providers and acute care providers to manage the new healthcare delivery system. What is missing is the inclusion of home health and hospice agencies that specialize in patient care in a post acute setting where medical treatment can be completed and rehospitalization avoided. The Medicare Payment Advisory Commission, in a 2011 report, noted that in 2009, home health agencies served more than 3.3 million while hospice agencies served nearly 1.1 million. Including home health and hospice agencies in a leadership role will therefore be critical to the success of any ACO. About VNAA Most of the home health agencies and hospices that are members of VNAA were founded before the Medicare program was established, some more than 125 years ago. Our members have a long tradition and significant expertise in caring for persons with chronic and often life threatening conditions, especially the provision of transitional care, chronic care management and care for dual eligibles. As part of the early public health movement, our members are also dedicated to prevention and population-based health initiatives. We serve patients without regard to their profitability and provide charity services to the under-insured or uninsured as well as through community health and wellness initiatives. 4

5 Home Health and Hospice Essential to the Success of ACOs Based on recent comments made by CMS on the important role of home health in preventing unnecessary and avoidable hospitalization, we had expected that the rule would provide options and incentives for home health and hospice agencies to participate as: 1) entities eligible to form an ACO and/or 2) participating entities on par with federally qualified health centers (FQHC) and Rural Health Clinics (RHC) where an increased shared saving is provided to the ACO. Both the home health agencies and hospice members of VNAA have a long history of working closely with physician and non-physician practitioner practices as well as hospitals to form effective teams for providing coordinated, evidence-based care while minimizing the use of unnecessary institutional care and polypharmacy. We believe that the community-based care provided by home health and hospice is essential to the success of any ACO. We strongly urge CMS to create incentives and rewards (such as an increase in the percentage of shared savings) for home health and hospice agencies that might take on creating an ACO, or for other ACOs that make such agencies a critical contributor along the same lines as an FQHC or RHC. Role of Nurse Practitioners We would also like to direct your attention to what we believe may be an oversight. While nurse practitioners are specifically cited in the rule and statute as potential participants, in the subsequent identification of ACO practice patients, nurse practice patients are not counted. This may have been a technical drafting error in the statute but would seem to present a possible operational dilemma in associating all the patients of ACO primary care participants in the base line and savings calculations. We urge CMS to look into this issue and correct this possible oversight. Patient Selection While patients would be attributed to an ACO by CMS, we believe there will be significant opportunities for an ACO to encourage or discourage certain types of patients in communications and actions. Based on the experience of our members under the home health prospective payment system and the Medicare hospice benefit, we believe this rule must give much greater and specific attention to the possibility of an ACO encouraging low risk patients and discouraging high risk patients to maximize their profitability under the system. In an increasing number of markets, nonprofit home health agencies and hospices find themselves becoming the providers of last resort for those patients who are predictably unprofitable under the Medicare payment system and are being avoided by agencies that are not mission driven that have become adept at filling their agency to capacity with predictably profitable, lower risk patients. 5

6 In the home health sector, our members serve patients who: 1) lack a stable primary care relationship, 2) have heavy wound care needs and/or multiple chronic conditions, 3) have poor rehabilitation prognosis, 4) are disabled with long treatment trajectories, 5) are dual eligible, 6) are poor and/or have language or health literacy issues and 7) are under age 65. In our nonprofit hospices, the patient population can be similar with the added complication that patients may be very close to dying. (Our hospices are often contacted because hospices that are not mission driven have refused to admit short stay patients.) In both cases, CMS has recognized that there is a problem with riskbased patient selection but has been unable to meaningfully address specific selective admission problems. We urge CMS to include specific requirements and procedures that will quickly identify those ACOs who are avoiding high-risk patients in favor or lower risk patients and specify meaningful steps that will be taken to assure compliance. Problems such as these will not only distort the ACO program but will put vulnerable, high risk patients in jeopardy when they cannot access care or are concentrated into the reduced number of overburdened providers that accept them. Encouraging Participation of Nonprofits in ACOs and Start Up Costs We appreciate the steps CMS has proposed in this rule in an effort to encourage smaller, innovative models of ACOs to participate. However, we are aware that a May 13 study by the American Hospital Association shows the start-up and management costs of an accountable care organization will run considerably higher than estimated by CMS. We are also aware that some group practice demonstrations that served as prototypes for the ACO program are unable to offset their full start-up costs. To encourage the participation of ACOs sponsored by nonprofit home health and hospice providers, we suggest that CMS allow nonprofit entities that have not recovered their start-up costs during the first three years of their participation (but have otherwise functioned in a satisfactory manner during the initial three-year initial period) be made whole for their start-up costs if they are not fully recovered. For budget neutrality purposes, this supplemental payment may be limited to the full amount of savings they generated (rather than only their shared savings percentage) during their participation. Thank you for the opportunity to comment on this important rule. Please feel free to contact Kathleen Sheehan, VNAA s Vice President of Public Policy if you have any questions regarding these comments at Sincerely, 6

7 Andy Carter, President and CEO Visiting Nurse Associations of America 7

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