Health Law Daily new payment model starts in 2020
Thursday, November 1, 2018

new payment model starts in 2020

By Kayla R. Bryant, J.D.

The new Patient-Driven Groupings Model (PDGM) will result in major changes to the home health (HH) prospective payment system (PPS) going into effect beginning January 1, 2020. Along with a shift from 60-day episodes of care to 30-day episodes of care, the new model will no longer base the home health payment on the number of therapy visits provided. The advance release of the final rule also implements a 2.2 percent payment increase for home health agencies (HHAs) in calendar year (CY) 2019.

2019 payment updates. For episodes of care ending on or after January 1, 2019, the CY 2019 standardized 60-day episode payment amount is $3,154.27 for HHAs that submit the required quality data to HHS. HHAs that do not submit required quality data are subject to a reduction, resulting in a standardized payment amount of $3,092.55.

CMS also updated the national per-visit rates used to pay the low-utilization payment adjustment (LUPA) for episodes with four or fewer visits. These per-visit rates differ according to type of discipline:

  • home health aide: $66.54;
  • medical social services: $234.82;
  • occupational therapy: $161.24;
  • physical therapy: $160.14;
  • skilled nursing: $146.50;
  • speech-language pathology: 174.06.

These rates are also subject to reduction for HHAs that do not submit quality data.

The rural add-on payment, set at 3 percent for HH services provided in rural areas by section 3131 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), was previously extended for episodes and visits ending before January 1, 2019. For episodes and visits ending during CYs 2019 through 2022, the Bipartisan Budget Act of 2018 (BBA) (P.L. 115-123) required CMS to implement new methodology for applying the rural add-on. Moving forward, the payment increase will vary depending on the rural county or equivalent area depending on utilization and population density.

Infusion therapy. The home infusion therapy benefit, established by the 21st Century Cures Act (Cures Act) (P.L. 114-255), is a separate Part B benefit category that covers professional services, patient training, and monitoring (including remote monitoring) for the provision of home infusion therapy and drugs. This benefit is not fully implemented under the Cures Act until January 1, 2021, but the BBA created a temporary transitional payment allowing this benefit to be implemented for CYs 2019 and 2020. This rule implements the temporary transitional payment and finalizes elements of the permanent benefit, from health and safety standards to accreditation.

PDGM. The PDGM implements changes required by the BBA. The new model was created to remove incentives to overprovide therapy in order to obtain increased payment. Instead, the PDGM relies on clinical characteristics and unique patient information to provide payments more closely representative of the type of care the patient receives. Home health periods of care will be placed into new payment categories to provide value-based payment.

The system also aims to reduce administrative burdens on providers. Some benefits will kick in earlier than the PDGM as a whole. Effective for recertifications made beginning January 1, 2019, CMS has chosen to remove the requirement for certifying physicians to estimate how much longer skilled services will be required for each home health recertification. The agency has also chosen to allow HHAs to include the costs of remote patient monitoring as an allowable operating expense, if such monitoring is used to supplement the care planning process.

MainStory: TopStory ReimbursementNews CMSNews BillingNews DrugBiologicNews DMENews HomeNews PartBNews PrescriptionDrugNews QualityNews

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