Reimbursement uncertainty clouds expansion of hospital at home 

Uptake among provider organizations has been aided by a CMS waiver, but executives say more payment assurances are needed to aid future growth.



This article is part of Bringing Care Closer to Home - June/July 2024 COVERstory.

Despite all the positive vibes about providing acute care to patients in their homes, forgive provider organizations if they’re not a bit queasy about making the move. 

For most organizations considering such a program, it’s natural to fear that current demand for inpatient care could ebb, and that acute care at home programs could thus cannibalize revenue. There’s also a cost involved in starting these programs – one executive likened beginning a hospital at home program to starting a whole new department as a product line. And home at health pioneers admit that it’s been difficult to scale the programs quickly and cost-effectively – to be expected for any new startup. 

But many organizations remain queasy about the long-term prognosis for reimbursement for such programs. At present, there’s an endpoint to a federal waiver enabling such programs, and there’s no consistent approach among payers for reimbursing for the delivery of acute care at home. 

Assuring reimbursement 

For all the promise of delivering acute care in patients’ homes, gaining confidence in future reimbursement is crucial, many analysts say. 

CMS had authorized more than 320 hospitals across 133 health systems by April 2024 to offer acute hospital care at home, a report by the American Hospital Association indicates. There’s potential for this number to double by 2026 if reimbursement is assured, according to a May 2023 report from Chilmark Research. 

However, that’s largely dependent on whether a federal waiver enabling hospital at home programs is extended past the end of this year, Chilmark analysts say.  

The Centers for Medicare & Medicaid Services launched the Acute Hospital Care at Home initiative in November 2020, in response to capacity strains resulting from the COVID-19 pandemic. The initiative was enabled by a waiver that allowed certain Medicare-certified hospitals to treat patients with inpatient-level care at home, expanding the Hospital Without Walls initiative started earlier in 2020. While the COVID-19 crisis has ended, the initiative continues because the Consolidated Appropriations Act, 2023 extended the initiative’s waivers and flexibilities until Dec. 31, 2024.  

Extension of the CMS waiver beyond the end of the year is critical for providers because Medicare is such a significant portion of patient populations for providers, and also because large national payers are likely to follow the lead of federal reimbursement policy, as they have in other coverage matters. 

Extending the waiver 

Assurance of reimbursement is especially important in gaining buy-in from hospital system executives for investing in hospital at home programs, says David Levine, MD, clinical investigator for Brigham and Women’s Hospital and Harvard Medical School. 

“Prior to November 2020, we didn't have an acute hospital care home waiver, and we had no fee-for-service payment mechanism (for) Medicare and Medicaid. I think given the circumstances, right, this is a temporary waiver … we think we need to see more of a permanent opportunity, or at least a much more extended timeline to allow hospitals really the certainty that they can and should jump into this, because it won't be changed in a year from now.” 

Levine provides the following example to illustrate the impact of the waiver. “If you were to go to your CFO and say, ‘I'd really like to start an oncology center,’ and the CFO (was supportive) and then you said, ‘But actually, CMS is going to stop paying for oncology care next year because there's just a waiver,’ the CFO is going to tell you, ‘No way, I’m not doing that.’ And unfortunately, we have this same story right now for acute hospital care at home. So I think improvements in our regulatory space and in our policy space will go a long way to getting us beyond the tipping point.” 

Some draft legislation looks to extend the waiver. The Hospital Inpatient Services Modernization Act would extend the waiver for the hospital at home program through 2027. The AHA lauded the proposal, saying, “As you consider action beyond temporary extensions of the waiver, we would welcome the opportunity to work with you to establish and implement a permanent version of the program that enables qualified patients to receive safe and effective hospital-level care in the comfort and safety of their home,” writing to Reps. Brad Wenstrup (R-Ohio) and Earl Blumenauer (D-Ore.), who released the draft legislation in March. 

Absent federal leadership on waiver extension, uptake could slow dramatically. The Chilmark report warns that the industry should “expect slow adoption over the next few years as growing pains are worked through and reimbursement models catch up with proven demand.” 


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Payers assessing coverage 

Coverage of acute care at home services by healthcare insurers is all over the map, and that can further impact adoption. The AHA, in an issue brief, raised the concern by saying that, “most private payers do not cover hospital-level care in the home setting.” 

Single-payer systems such as the Veterans Affairs network or payer-provider systems such as Kaiser Permanente have been better able “to navigate the payment challenge,” the AHA brief noted. 

The pandemic has aided consideration of hospital at home services. For example, in late 2022, Anthem Blue Cross and Blue Shield noted that “Anthem Blue Cross and Blue Shield recognizes and accepts qualifying claims for acute Hospital in Home (HiH) services” through a new revenue code. Also, Humana notes that it is partnering with DispatchHealth in some areas to offer same-day acute care services in the home, in partnership with providers, to reduce emergency department visits. 

Still, improvements in the homogeneity of coverage are essential to take full advantage of the potential for hospital at home services, contends Atrium Health in a newly released white paper. “At the state level, however, embracing a payment model is coming much more slowly. Only nine state Medicaid programs extend coverage to hospital at home programs, including North Carolina, which began coverage in November 2023. 

“Regulatory oversight and working with payers are evolving processes as cost-savings, patient and care team enthusiasm, and effectiveness of virtual care become more recognized, said Molly McColl, Advocate Health’s vice president for virtual and global health care.” 

As reimbursement moves to value-based care, and more emphasis is placed on addressing the social determinants of health, hospital at home programs make more sense, says Colleen Hole, vice president of clinical integration and chief nurse executive for Atrium Health Medical Group.  

“It is absolutely linked to population health value-based care,” she says. “We still will have a capacity challenge probably for the next three decades in this market and in many markets in America. We see hospital at home as part of a broader continuum of home-based care. 

“It's a value-based care equation – we're creating capacity, and improving outcomes actually does improve the financial picture. It's a heavy lift of investing, to stand this program up. But I think ultimately, as we get better and better at it, I think America has the opportunity to decrease the overall spend in healthcare.”


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