Hospital-Care-at-Home (HCAH) saw federal implementation in response to the COVID-19 pandemic and has since gained significant momentum in large part because of the numerous benefits seen by healthcare facilities, professionals, and patients alike.

In recent years, an increasing emphasis has been placed on cost-effective healthcare that is also patient-centric, lowering care costs while maintaining (or even improving) the quality of care given and the outcomes received. As technology continues to advance, telemedicine has also seen greater implementation, leading to a greater capacity for providing hospital-quality care at home.

Both the Centers for Medicare & Medicaid Services (CMS) and private payers have adapted to the evolving healthcare landscape and growing demand for home-based care, whether it’s to improve care, lower costs, or make healthcare more efficient, lowering the backlog of cases that drive down hospital care quality.

CMS: The Catalyst of Federal Hospital-At-Home Initiatives

In November 2020, in response to the COVID-19 pandemic, CMS launched the Acute Hospital Care at Home (AHCAH) initiative, which allows certain hospitals that are Medicare-certified to treat their patients at home with care that resembles inpatient-level quality. With this initiative, CMS made it possible for Medicare patients to receive care at home when they meet certain criteria, opening up hospital beds for those who need inpatient care. 

One way in which CMS has adapted to hospital care at home is through the establishment of the AHCAH waiver, which has some key changes to Medicare rules, such as:

Location flexibility – Hospitals may provide acute inpatient services in a patient’s home rather than a traditional inpatient setting.

Eligibility criteria – There are specific criteria that patients must meet in order to be eligible for HCAH, including their home environment (it must be safe and stable), clinical needs, and logistical support. The purpose of CMS’s criteria is to ensure that patients who are recommended for HCAH have the greatest likelihood of seeing its benefits, similar to how certain drugs are only FDA-approved for specific patient populations.

Telemedicine integration – Through the waiver, CMS allows for remote monitoring, telemedicine, and other digital health tools to be used in order to constantly survey patients and communicate with their care teams.

Through these adaptations in CMS rules, hospitals that offer HCAH remain eligible for Medicare reimbursement.

The HCAH initiative saw such great success that in 2023, through the Consolidated Appropriations Act, the waivers and flexibilities outlined above were extended through the end of 2024. Congress is expected to vote on whether to extend the HCAH initiative beyond 2024 in the next few days. Not only does this continue to allow hospitals to offer care at home for their patients, but it also shows CMS’s commitment to integrating hospital care at home into the broader healthcare system. It also allows hospitals to apply for hospital care at home on an ongoing basis rather than only in emergencies.

Finally, CMS has adjusted its payment structure in order to continue supporting hospital care at home. Through their new payment structure, hospitals are reimbursed similarly to traditional inpatient stays.

For HCAH services, CMS uses a bundled payment model wherein hospitals receive a single payment for the entire episode of care, which covers all services that are delivered to the patient at home based on the reimbursement amount for in-person care. The payment model also adjusts for the level of care required and the duration of the home care episode, which is designed to align financial incentives with cost efficiency and improved patient outcomes.

The CMS AHCAH program shifted home care from an experimental hope to a strategic priority, and their adaptations have made it possible for hospitals across the country to initiate and expand their hospital-at-home programs.

How Private Payers Are Joining In

Private payers often align their adjustments with the Centers for Medicare and Medicaid Services, typically by implementing policy changes that gradually resemble CMS’s policies.

As more and more providers see the benefits of hospital care at home, there is a shift toward greater funding and implementation. Some payers have goals to move more of their medical patients to home care, with research continually pointing out care services that can see the shift to at-home care. 

In the past, many private payers did not pay for care at home or telemedicine services, both key elements of hospital care at home. However, payers are accepting the shift of the healthcare market and expanding their coverage to these key areas, making hospital care at home possible.

When it comes to private payers, one of the greatest challenges in implementing a program of this scale and investing in it properly is ensuring that there will be enough of a need to make the investment worthwhile. Payers are adapting to this challenge by using greater sources of data to drive their advancements. Specifically, data allows payers to understand the patient population of their network or hospital and determine if enough patients with conditions that may be treated at home are admitted. Furthermore, this data allows payers to find an in-demand need to focus on first, helping them to prioritize the new technologies, processes, and additional specialized personnel that are needed to offer treatment for one specific service line at home.

The upfront cost of implementing hospital care at home remains a challenge for private payers, but to further mitigate the financial risks, some health systems may choose to partner with third parties. Some healthcare firms are building hospital-at-home programs as standalone services that are then marketed to hospitals, physicians, and insurers. For institutions that do not have the means to implement their own program, the third-party option is an adaptation that makes hospital care at home possible for their patients.

Thanks to the implementation and benefits analysis of the AHCAH initiative completed by CMS, private payers are able to see how they can also benefit from embracing hospital-at-home, prompting them to jump on the bandwagon. Challenges still exist for many payers, but they are learning to adapt in order to implement healthcare’s most promising care innovation.

Adapting to Hospital Care at Home 

The beauty of the healthcare field is that it is eternally evolving—yesterday’s challenges soon become obsolete thanks to tomorrow’s advancements. However, the key to making the most of these advancements is for healthcare facilities and institutions to evolve and adapt, as well, which CMS and private payers are actively working on with hospital care at home.

Hospital-at-Home is one of the most evidence-based healthcare delivery innovations of the past few decades, which is why we are seeing so many adaptations to make the most of this advancement. With each step forward, hospitals improve their care quality, and health systems lower the cost needed to provide exceptional care.

For those looking to jump on board, Inbound Health helps providers build and operate hospital-at-home programs and helps payers develop payment models with health systems. If you’re unsure how to adapt to HCAH, Inbound Health can help. 

References

Acute Hospital Care at Home Data Release Fact Sheet | CMS. (2024). Cms.gov. https://www.cms.gov/newsroom/fact-sheets/acute-hospital-care-home-data-release-fact-sheet