DOH Poses Draft Options for CHHA CON Reform

Last week, the Department of Health (DOH) issued some initial options for consideration regarding Certificate of Need (CON) reform for Certified Home Health Agencies (CHHAs). The Department is currently revising or developing the need review process for CHHAs, Licensed Home Care Services Agencies (LHCSAs), and Hospice. In a meeting of the Public Health and Health Planning Council (PHHPC), DOH provided a general history of the need process for CHHAs and a snapshot of the industry and its current challenges. Their goals are to simplify what is currently a complicated formula that is no longer practical, address patient population growth, and facilitate aging in place. DOH’s CHHA CON reform briefing document includes background on the current CHHA need methodology, including establishment and construction requirements, and an overview of agency numbers. The brief assumes continued consideration of character and competence and sets forth three options and additional considerations shown below.

Based on the current Public Health Law (PHL), the Department recommends the repeal and replacement of 10 NYCRR 760.5, which sets forth the requirements for demonstrating CHHA need. The following options are put forth for consideration in the development of a new need methodology. All options assume continued consideration of character and competence and financial feasibility for applicants.

1. Apply a presumption of no need if there were a choice of at least five CHHAs in a county. If an entity wanted to establish a new CHHA in a county where there were five CHHAs or more, they would need to file an application and be able to demonstrate to the Department an unmet need that could be accommodated by the approval of the establishment of the proposed agency. Factors that the Department would look for in the application could include, but would not be limited to, patient choice, cultural competence, and length of time to travel from one site to another. If there were four or fewer CHHAs in a county, there would be a presumption of need.
2. Develop a specific population-based formula based on the number of Medicare enrollees and the existing caseload of each CHHA in the planning area. The formula would begin with the assumption of a choice of at least two CHHAs in each county. The formula would use Medicare enrollee projections combined with population data to project a number of potential CHHA recipients. This would then be compared to the current CHHA patient counts to identify the projected total unmet need.
3. Issue a Request for Proposals (RFP) based on updated factors and allow all entities, both current and new, to compete for planning areas. This would be based on the 2012 experience but updated for current needs and policy objectives.

Additional ideas and issues for consideration include:

• Eliminating the requirement for public need review in its entirety, allowing the market to completely drive the need for additional CHHAs. This option could require a change to the PHL;
• Eliminating the special needs category of licensure and grandfathering all current special needs agencies by designating them as general purpose CHHAs; and
• Simplifying the review for character and competence.

PHHPC discussed several general issues regarding the home health industry. They asked whether existing CHHAs meet the current demand. DOH said that some of the larger CHHAs can contract and expand to meet demand; however, upstate CHHAs do not necessarily have this capacity and face significant workforce challenges. DOH indicated that competition is valuable in that it offers patient choice and encourages employers to provide competitive compensation and benefit packages to their workforce. PHHPC members inquired about DOH’s interest in incorporating quality requirements into the need process, and DOH will be looking into that matter. DOH staff and PHHPC members both acknowledged support for forgoing the special population CHHA designation, as some CHHAs with this status did not necessarily conform to delivering such care.

In concluding their meeting, PHHPC members acknowledged that CHHAs are seeing patients with a higher acuity level and that the patient population is growing. They acknowledged that the workforce issue is tied to lack of reimbursement and providers’ inability to negotiate adequate rates with managed care plans, a point that we will also raise in public comment.

The briefing document is a starting point for the Department, and they will be considering provider input as they move forward with this reform effort. The archived webcast of the presentation and discussion can be found here. Please email or call us with your thoughts, questions, and feedback so that we can develop preliminary comment to the Department.

Contact: Meg Everett, meverett@leadingageny.org, 518-867-8871