Choose Home Care Act Presents Senior Living Opportunities, Draws Skilled Nursing Backlash

A bill introduced last month in the United States Senate would allow in-home care alternatives to skilled nursing facilities and poses substantial ramifications for private-pay senior living providers.

Sponsored by Sens. Debbie Stabenow (D-Mich.) and Todd Young (R-Ind.), the Choose Home Care Act of 2021 would allow certain Medicare beneficiaries to receive extended Medicare services such as skilled nursing or rehabilitation services in their homes for up to 30 days following hospitalizations or surgeries, in addition to their usual home health allowance.

Additionally, beneficiaries may also receive traditional home health services for longer than 30 days, as needed.


If the bill becomes law, it would be a boon for certified home health agencies that already provide skilled care, and may prove popular with seniors living at home, and their families.

This includes seniors in independent living and assisted living settings, and opens opportunities for operators to partner with home health agencies to bring services into buildings.

The legislation is supported by a range of home care advocacy groups, as well as senior housing associations such as LeadingAge and advocates such as AARP.


Other industry associations are skeptical, however, and argue that the benefit for home health agencies comes at the expense of skilled nursing facilities which will see reduced occupancy, placing pressure on operations and margins.

Bringing skilled care home

The Choose Home Care Act would give home health agencies an expanded payment for home-based care services, in addition to traditional home health services, ATI Advisory Founder and CEO Anne Tumlinson told Senior Housing News.

Currently, Medicare recipients cannot receive home-based nursing services on anything other than intermittent/part-time basis. What this means is, for Medicare beneficiaries needing assistance with basic activities of daily living (ADLs) who may need a nurse on hand for more complicated matters, if a family member cannot assist, the only place where that care can be provided is a skilled nursing facility.

“This legislation would essentially allow home health agencies to compete with skilled nursing facilities,” Tumlinson said.

To qualify for the extended benefit, a patient must meet Medicare’s skilled nursing benefit eligibility including a three-day preceding hospital inpatient stay, and reside at home. An assessment tool would consider an individual’s place of care preferences, functionality, medical conditions, goals regarding care and family caregiver concerns. This assessment would occur as part of the hospital discharge planning process.

From there, eligible patients would be referred to a qualified home health agency offering the Choose Home option. Services would be covered for 30 days, and traditional home health services could extend beyond that period, based on further clinical assessments.

The expanded benefit includes transportation, meals, home modifications, remote patient monitoring, care coordination and discharge planning, respite care and caregiver supports training, additional nursing and therapy care as needed, and personal care services.

Add-on payments are capped at 80% of the median 30-day payment amount typically afforded skilled nursing facilities, meaning the Medicare beneficiary would incur some out-of-pocket costs.

Partnership potential

Some organizations in the senior living space could capitalize on the Choose Home Care Act, if it becomes law.

Several providers have found success during Covid-19 expanding their home care service lines to provide care to older adults in their homes, given that demand for these services dramatically increased. This has expanded revenues while offsetting losses brought about by lower occupancies. And more providers are exploring launching or expanding their home- and community-based service lines.

The bill also holds upside potential for private-pay senior living providers, because it allows residents in senior apartments, independent living and assisted living settings to bypass nursing home or rehabilitation center settings to receive skilled care directly in their living quarters.

For example, Brookdale Senior Living (NYSE: BKD), which recently sold an 80% stake in its home health, hospice and outpatient therapy arm to HCA Healthcare for $400 million, would conceivably see revenues for that service line expand if the bill becomes law.

Other private-pay providers, however, are not qualified for Medicare billing. But they can entertain partnerships with qualified home health agencies, Tumlinson pointed out. For instance, they might team up with a Medicare-certified home health provider that will receive the expanded Medicare payments to care for residents that are recently discharged from the hospital, while the senior living provider would be able to collect the private-pay rent.

Lifesprk, which specializes in providing value-based care through home- and community-based services partnerships, has had home care services inside of partnered assisted living facilities for years, CEO Joel Theisen said during a recent SHN+ TALKS interview. With the recent acquisition of Tealwood, Lifesprk now also owns a senior living portfolio of about 40 communities.

Theisen is supportive of the Choose Home legislation, seeing it as another route toward providing services in the setting that consumers prefer, at a lower cost to the U.S. health care system.

Industry groups split

The Choose Home Care Act has support from myriad stakeholders in home health care and consumer organizations including National Association for Home Care and Hospice, the Partnership for Quality Home Health Care, LeadingAge, AARP, and the National Council on Aging.

Among long-term care organizations, the American Health Care Association/National Center for Assisted Living (AHCA/NCAL) opposes the legislation as it is currently written, arguing that it would supplant existing benefits and increase out-of-pocket costs, Associate Vice President Dan Ciolek told SHN.

He notes that Choose benefit days would be deducted from 100 available skilled nursing facility benefit days for the spell-of-illness. Renewable Choose episodes could exhaust the entire 100 benefit days, forfeiting an established and important Medicare Part A benefit.

AHCA is also concerned that the legislation will lead to higher out-of-pocket costs. The current home health benefit does not include coinsurance payments. The submitted bill language suggests that beneficiaries receiving Choose benefits would be subject to daily Choose benefit coinsurance payments after day 20 of a spell-of-illness (up to 100 days of available benefit eligibility).

Choose benefits do not include costs for drugs and medical equipment that would otherwise be covered if daily skilled care were furnished in a skilled nursing facility. This means beneficiaries would be subject to surprise out-of-pocket costs even if they have Medicare Part B and Pat D coverage.

AHCA/NCAL believes that a separate, simpler and more accessible payment model design concept to offer daily skilled care in the home, built upon existing patient protection regulations and quality and payment models, should be tested before implementation.

“Such a model would align with the vision of the IMPACT Act while overcoming many of the obstacles that we believe make the current Choose design unworkable,” Ciolek said.

Tumlinson counters that there are already Medicare recipients receiving the current home health benefit who still qualify for the expanded benefit outlined in the legislation. And, while skilled nursing facilities see the Choose Home Care Act as a threat, the overlap between what they provide and what home health agencies offer give Medicare recipients more flexibility in how they receive skilled post-acute services, without placing undue burden on families to care for them.

“A lot of people don’t get the skilled care they need, period. You’re stuck without adequate support — clinical and functional support — at home. We’re just discharging people a lot quicker,” she said

LeadingAge’s support of the legislation falls in line with the organization’s mission statement, and its advocacy for member providers across the full care continuum for older adults, Director of Media Relations Lisa Sanders told SHN.

The association’s position on the bill is rooted in the notion that it expands the universe of options for older adults and tightens the safety net for older adults as they leave the hospital.

“We believe that the Choose Home Care Act is not about directing where or how older adults receive care. It simply provides one element in the broad range of care options that older adults and their families need,” Sanders said.

Tumlinson agrees.

“The benefits are long overdue,” she said.

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