Policy Opportunities to Support Home-Based Care

By Kelsey Brykman, Center for Health Care Strategies


Two million older adults in the U.S. rarely or never leave their homes and even more individuals face difficulty or need assistance to do so. This population faces significant disparities in health outcomes, such as having worse self-reported health and being at greater risk of hospitalization. Individuals who are homebound are also more likely to be part of groups that have been socially and economically marginalized, such as communities of color, people with low income, and adults with low educational attainment.

Home-based care models are an important strategy for expanding access to high-quality care for adults with complex needs and reducing health disparities for homebound populations. Home-based care models provide ongoing medical care in patients’ homes to treat chronic and/or acute conditions. Despite the opportunity for improving access to care, home-based care remains significantly underused and inequitably distributed.

To better understand Medicare and Medicaid policy options for expanding access to home-based care for people with complex health needs, the Better Care Playbook recently spoke with Robert Saunders, PhD, Senior Research Director, Health Care Transformation at the Duke-Margolis Center for Health Policy, and Jonathan Gonzalez-Smith, MPAff, Research Associate at the Duke-Margolis Center for Health Policy. Their recent research explores potential policy levers for supporting home-based care, with a focus on value-based payment.

Q. How has the COVID-19 pandemic changed the landscape for home-based care providers and for individuals who receive home-based care?

R. Saunders: There was a big rise in demand because of the public health emergency, especially as hospitals needed to free up capacity early in the pandemic. The Centers for Medicare & Medicaid Services introduced new regulatory flexibilities expanding where and how care could be delivered, that wouldn’t have been available otherwise. It was like moving the home-based care field forward 10 years in six weeks.

J. Gonzalez-Smith: The push to deliver care outside of acute care settings resulted in rapid scale up of home-based care to provide care to individuals with complex health and social needs. There has been a movement toward home-based care models for a while, but COVID-19 was a pivotal moment that accelerated this trend. As context, there were 12 programs providing acute-level care outside the home before Covid-19. After new regulatory flexibilities were put into to place, that rose to 145 programs as of July 2021.

Q. Why should policymakers focus on expanding access to home-based care? How is there a unique “window of opportunity” right now?

J. Gonzalez-Smith: Many policymakers, including the Biden administration, are explicitly focusing on addressing health equity. For example, the Center for Medicare & Medicaid Innovation (CMMI) recently released a strategy refresh which prioritizes equity. Home-based care models can play a central role in achieving this goal by expanding access to care for individuals who face difficulty leaving their home. This population often has complex health and social needs that historically have gone unmet.

R. Saunders: Additionally, now that we are coming to the end of the acute phase of the public health emergency, there is the question of which home-based care regulatory flexibilities will remain in place. We are in a unique window of opportunity because stakeholders have become more comfortable with home-based care and we have the policy tools to support uptake of these models we just need to determine which policy levers will be sustained going forward and in what capacity.

Q. Currently, what are key barriers to implementation and payment for home-based care?

J. Gonzalez-Smith: To understand the barriers, it is important to understand the uniqueness of the patient population receiving home-based care services. Patients have heterogenous health and social needs and require different levels of service intensity over time. Existing programs often do not address this full continuum of need and are not coordinated with one another.

R. Saunders: We also need to consider how to align all the different types of home-based care programs and services, such as primary, acute, and palliative care and how to dial the intensity of care up or down as needed. It is fantastic that there is now more capacity for providing hospital-level care at home, but what about when patients are discharged from these programs? How will their ongoing needs be addressed to ensure they do not end up back in the hospital?

Q. How can value-based payment (VBP) support wider access to high-quality, home-based care, as compared to fee-for-service (FFS) payment?

J. Gonzalez-Smith: FFS payment can reinforce fragmented ways of care delivery and makes sustaining home-based care challenging. Home-based care models often require more time per patient, which is challenging to sustain in a FFS environment which rewards volume of services. FFS also does not reimburse for all types of services. For example, some staff such as community health workers are often not billable. VBP can allow flexibility in how resources are directed while also providing accountability for health outcomes being met.

R. Saunders: Health care providers paid through FFS also may not have the funds to support care coordination. VBP models have more incentives for providers to take a population-level approach to care, including focusing on care coordination. Until payment is more aligned with the goals of home-based care delivery models, the scale of implementation will be limited.

J. Gonzalez-Smith: VBP is also an important consideration in the context of regulatory flexibilities. These policies are often thought about in a binary way do we continue the regulatory flexibility or end it? VBP offers another option since providers in VBP arrangements have more ability to operate home-based care programs without a regulatory waiver.

Q. What are some examples of how VBP models can be adapted to better support home-based care?

J. Gonzalez-Smith: Our work has focused on the question of how to augment existing VBP models, such as those designed by CMMI, as opposed to designing new models all together. For example, there may be opportunities to introduce sub-tracks within existing VBP arrangements for those in need of home-based care services. Within this framework, one challenge is there are not widely used quality measures for the population receiving home-based care services.

R. Saunders: To that point, care needs and priorities for individuals with serious illness may be very different from the rest of the population. For example, preventive care such as colon cancer screenings or mammography are often the focus for the general population but may not be appropriate for people receiving home-based palliative care. Other issues, such as pain management or days spent at home (versus in a facility) may take priority.

Another challenge is structuring models so that people with serious illness can be included in VBP arrangements and providers have sufficient resource to care for these patients. Some methods of attributing individuals to VBP models can exclude individuals with advanced illness who may benefit from the innovative care delivery models that VBP allows. There may also be a need to examine risk-adjustment methodologies to ensure appropriate payment for individuals with more complex conditions. In short, the nuance of VBP design can have important effects on the stability of and resources available for home-based care.

Q. How can policymakers better support small, independent home-based care providers?

J. Gonzalez-Smith: These small practices often don’t have access to the upfront capital required to move into VBP models. Payers and policymakers may consider what type of investments or capabilities are needed to include these providers in new payment models. The CMMI ACO Investment Model is an example of how upfront funding can enable providers to build capabilities, like data analytics and referral networks, in order to transition into VBP arrangements. Additionally, small providers may consider partnering with third-party organizations that have the scale to provide administrative supports and can aggregate financial risk across practices with small panel sizes.

Q. Going forward, are there additional opportunities to iterate on and improve home-based care models?

J. Gonzalez-Smith: Home-based care models can play a big role in expanding access to care but it is also important to understand that the care model and level of care needed may be different depending on the patient or community. How can home-based models be adapted to meet different needs and not disproportionately burden certain populations, including caregivers?

R. Saunders: We need to ask how home-based care models can be developed to serve a diverse group of patients. For example, how are we meeting the needs of patients without easy access to caregivers or who may need social supports like nutrition services? Home-based care can be a powerful mechanism for improving equity, if we do it right.