Health Reform WK-EDGE HHVBP model expands to all states
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Tuesday, January 19, 2021

HHVBP model expands to all states

By Jeffrey H. Brochin, J.D.

Based on the formal evaluation of the first three years of a nine-state Home Health Value-Based Purchasing (HHVBP) Model, CMS’s Chief Actuary has certified that expansion of the HHVBP Model would reduce program spending, and should be applied to home health providers in all states.

CMS has announced that the Home Health Value-Based Purchasing (HHVBP) Model has been certified for expansion through rulemaking beginning no sooner than Calendar Year (CY) 2022. The model, implemented in nine states, has resulted in an average 4.6 percent improvement in home health agencies’ quality Total Performance Scores (TPS scores) as well as average annual savings of $141 million for Medicare (CMS Letter, October 13, 2020).

HHVBP Model description. The Center for Medicare and Medicaid Innovation—also known as the CMS Innovation Center—implemented the five-year demonstration HHVBP Model on January 1, 2016 to test whether providing payment incentives for better quality care with greater efficiency would improve the quality and delivery of home health care services to Medicare beneficiaries. The HHVBP Model adjusted payments to Medicare-certified home health agencies (HHAs) based on the quality of care provided, rather than the volume of services rendered. The payment adjustments were determined based on a home health agency’s quality performance measures relative to peers in their state.

Participants in the model consisted of all Medicare-certified HHAs that provide services in Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee, and Washington. The goal of the model was to incentivize providers to offer improved care and to discharge healthier patients, thereby reducing hospital admissions and skilled nursing facility (SNF) stays during or immediately following home health care and achieving savings for the Medicare program.

Office of the Actuary analysis. As part of its analysis, CMS first assessed the financial arrangement imposed by the HHVBP Model. Home health agencies participating in the model were subject to payment adjustments based on their TPS scores. The TPS is a composite of scores on achievement and quality as compared to other HHAs in the same state. The adjustments were made in a budget-neutral manner and there were no up-front payments to the providers; therefore, impacts on total Medicare spending would only result from the changes in care delivery. Since the TPS scores included claims-based metrics as well as quality metrics, it was unlikely that this model design would result in cost increases. Additionally, CMS reviewed the September 2020 "Evaluation of the Home Health Value-Based Purchasing (HHVBP) Model: Third Annual Report", which was based on complete data through 2018, the first-year adjustments to home health payments were made.

Actuary Office findings. Among the findings of the evaluation were the following:

  • There was a small non-significant increase in HHA spending.
  • TPS scores increased during the demonstration, largely due to the OASIS measures.
  • The distribution of HHA payment adjustments was narrow. For 2018, the maximum adjustment was 3 percent, but actual average adjustment was 0.85 percent.
  • Medicare spending showed a statistically significant decrease of 1.2 percent for 2016-2018.
  • Unplanned Acute Care Hospital (ACH) expenditures were reduced by $1.50 per day or 4.5 percent, SNF expenditures fell by 4.0 percent per day, while emergency department expenditures increased by 5.9 percent per day.
  • For the 9 states participating in the model, expenditures in 5 states were reduced, 3 states did not show a statistically significant difference, and spending increased 3.5 percent per day in one state (Maryland), an increase which was statistically significant.

CMS also reviewed the preliminary data for the first three quarters of 2019 and the findings were very similar to the results for 2016 through 2018.

Certification for expansion. Under Section 1115A(c) of the Social Security Act, the Secretary of HHS may, through rulemaking expand the duration and scope of a model test if the Secretary determines that such expansion is expected to reduce spending without reducing the quality of care or improve the quality of patient care without increasing spending. In addition, the Chief Actuary of CMS must certify that such expansion would reduce (or would not result in any increase in) net program spending. Finally, the Secretary must also determine that such expansion would not deny or limit the coverage or provision of benefits. The HHVBP Model has met all three requirements.

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