As 2024’s end draws near, one of health care’s biggest success stories from the past five years finds itself in peril. That’s not great news for the home medical equipment (HME) industry, which could see a promising opportunity vanish.
The Centers for Medicare & Medicaid Services’ (CMS) hospital-at-home program, which began during the COVID-19 pandemic, is facing a potential expiration at the end of 2024. Initially introduced to help hospitals manage patient surges and provide care in patients’ homes, the program has remained in place with positive results, allowing hospitals to receive reimbursement for acute-level care provided outside of the traditional brick-and-mortar setting.
Despite strong support for the program, Congress has not yet implemented a permanent solution. Proposed legislation could extend the program for another five years, but it is still pending approval.
And that’s slowing continued adoption of hospital-at-home models.
This topic – delivering hospital-level care in the home and what it takes to do so – was discussed in depth at the HME Business FUTURE conference in Nashville in August. Speakers who participated in the conversation included Alex Hoopes, senior director of strategy and execution for Velocare, and Dr. Robert Moskowitz, the chief medical officer of Contessa.
“If there’s not a definitive payment [mechanism], people will sit on their hands and sit on the sidelines,” Moskowitz said at FUTURE. “And I think what we’ve seen up to this point, it was very helpful – tremendously helpful – for CMS to rapidly stand this up and give an opportunity to say, ‘Hey, we got some funding for it. Go ahead.’ Now, we’re just in a moment where it’s like, ‘Wait a second. I want some guarantees that this is where we’re going before we’ll do next steps.’”
Hoopes echoed those sentiments.
“I think the waiver drove the demand in the first place,” he said at FUTURE. “So without the waiver, there’s no kind of early renaissance of the hospital-at-home program.”
As of Oct. 10, there were 366 total hospital-at-home certification numbers granted by CMS, according to agency data. Overall, those 366 numbers are linked to 138 health systems in 39 states.
Hoopes’ organization, Velocare, is a division within the broader Cardinal Health (NYSE: CAH) network. Velocare was launched as a first-of-its-kind distributed supply chain logistical solution for health systems trying to set up hospital-at-home programs.
“The way the concept of Velocare came about was from some of the health systems that we worked with, who were starting to kick the tires on hospital at home, and they were used to Cardinal Health helping them make sure they had the right stuff at that site of care,” Hoopes explained at FUTURE.
Velocare officially worked with its first hospital-at-home patient on Oct. 24, 2022, teaming up with an Oklahoma City health system. As of August, it had expanded its hospital-at-home network to 18 health system partners around the U.S.
“It’s interesting, because you see a lot of variety in the way these programs are operated,” Hoopes continued.
Meanwhile, Contessa is a veteran in the hospital-at-home space. Initially built as a standalone company, home health giant Amedisys Inc. (Nasdaq: AMED) acquired Contessa for $250 million in 2021.
In addition to working with health system partners and payers to launch hospital-at-home models, Contessa also spearheads programs that deliver home-based palliative care services and skilled-nursing-facility-level care in the home.
As of the FUTURE conference, Contessa partnered with 10 large health-care systems across the U.S.
“We started doing it under value-based arrangements with payers, … moving care to the home and taking risk with respect to readmissions and escalations back to the hospital,” Moskowitz said. “We had an intentional sort of path to – if we could figure out how to do hospital-level care in the home, then we can start doing the other parts of what we consider the patient’s longitudinal journey.”
The inflection point
The funding aspect of hospital-at-home had previously been a major sticking point to broader adoption. Another challenge has been the supply-chain component – ensuring that all the necessary equipment gets to where it needs to go, when it needs to be there.
It’s this challenge that has turned into an opportunity for HME players such as Velocare.
“In this model, you have to be extremely planful,” Hoopes said.
Early on, some health systems may figure out a way to go it alone in setting up their hospital-at-home models. But as programs grow from a single-digit patient pool to double digits and beyond, they often quickly realize they need help.
“When we got involved with some of these early health systems, we were typically engaging with health systems whose programs had gotten started, were growing, and then they were hitting an inflection point,” Hoopes said. “They had figured out a way to get their programs off the ground. They could support a census of maybe eight or nine patients at a time. But right as they were trying to cross over into double digits, that’s when the things that they had [pieced] together [started to see challenges].”
Moskowitz likewise described the difficulties that come with jumping from a smaller patient pool to a larger one.
“It’s like, ‘Wait a second. Now, I’ve got issues,’” he said. “Whether it’s DME equipment, pharmacy getting sent to the [home], you know, labs, nurse scheduling, community paramedicine scheduling, etc.”
Hoopes offered some examples of the types of medical equipment patients need in the home. About 70% of the patients that Velocare works with, he said, need oxygen equipment. Another 60% of the patients the organization works with need IV infusion, he added.
Patients may also need suction-related equipment, various dressings and more.
“They’re kind of hitting that Goldilocks principle of patients having what they need, plus maybe a little bit more,” Hoopes said. “And we’re not going to put them in a position where they’re going to get pinched because they need something in the middle of the night and it’s not there.”
A common misconception around hospital-at-home is the notion that stakeholders are basically duplicating the brick-and-mortar hospital in the home setting. That’s far from the case, Moskowitz explained.
“The one thing you’re not doing is recreating the hospital in the home, because we know the problems that exist with a hospital,” he said. “So if you’re going to recreate the hospital in the home, you’re going to recreate those problems.”
Lessons learned
About a month after the HME Business FUTURE conference, CMS released a fact sheet highlighting key takeaways from the hospital-at-home program, which is technically titled the “Acute Hospital Care at Home Initiative” (AHCAH).
In addition to extending the hospital-at-home waiver, the Consolidated Appropriations Act of 2023 required CMS to study and analyze AHCAH.
When it comes to clinical conditions, patients in AHCAH were primarily treated for a relatively small set of conditions, according to CMS. The agency’s study found that the most common Medicare Severity Diagnostic Related Groups (MS-DRGs) and Major Diagnostic Categories (MDCs) treated through the AHCAH initiative included respiratory conditions, circulatory conditions, renal conditions and infectious diseases.
In terms of quality compared to traditional hospital settings, AHCAH had mostly positive results.
“The study found that beneficiaries who received care under the AHCAH initiative generally had a lower mortality rate than their brick-and-mortar inpatient comparison counterparts, consistent with existing HaH literature,” CMS wrote in the study.
AHCAH also seemingly did well from a cost perspective.
”The analysis showed that AHCAH inpatient episodes had, on average, a slightly longer length of stay than comparable brick-and-mortar inpatient episodes,” CMS wrote. “Additionally, there was, on average, lower Medicare spending for services furnished in the 30-day post-discharge period for AHCAH episodes, as compared to brick-and-mortar inpatient episodes, across more than half of the top 25 MS-DRGs in the AHCAH group.”
However, the differences attributable to AHCAH patient selection criteria and clinical complexity, as measured across the two groups, make it difficult to conclude that the AHCAH initiative resulted in lower Medicare spending overall as compared to brick-and-mortar inpatient care, according to CMS.
There are several health care groups that want to see a more permanent CMS hospital-at-home program, with many signed on to the Moving Health Home coalition.
Whether or not that happens is still unclear, but there’s certainty momentum behind the cause, according to Moskowitz.
“Very, very rarely in the health-care industry do you have all your forces agreeing upon something,” he said. “You have health-care systems saying, ‘I have to find an alternative site of care.’ You have payers that constantly look for alternative sites of care, if the outcomes are right and the economics right. You have patients … saying, ‘I want the alternative site of care, and I want to be my home.’”