Health Reform WK-EDGE Home health payment reform finally draws near
Tuesday, July 30, 2019

Home health payment reform finally draws near

By Kayla R. Bryant, J.D.

Home health payments will drop to 30 day units and receive a 1.5 percent update, while incorporating patient characteristics into consideration for case-mix groups.

Under the home health (HH) prospective payment system (PPS) proposed rule, CMS would implement the long-awaited patient-driven groupings model (PDGM) beginning in calendar year (CY) 2020. The changes will incorporate a 1.5 percent HH payment update percentage, resulting in an estimated increase in Medicare payments to home health agencies (HHAs) in 2020 of $250 million. CMS also proposes updates to the rates for home infusion therapy for 2020 and grouping home infusion drugs into three payment categories for 2021, and proposes allowing physical therapist assistants to provide maintenance therapy (Notice84 FR 34598, July 18, 2019).

Patient-driven groupings model payments. The PDGM implements changes required under the Balanced Budget Act (BBA) of 2018 (P.L. 115-123), and changes the case-mix adjustment methodology of the HHPPS and changes the unit of payment from 60 days to 30 days. Instead of relying on the number of therapy visits provided, the PDGM incorporates clinical characteristics to determine patients’ payment categories. Timing, admission source, diagnoses, and functional impairments are taken into consideration, resulting in 432 possible case-mix groups. Each group has its own threshold to determine whether a low-utilization payment adjustment (LUPA) will be applied.

For CY 2020, the HH payment update percentage will be 1.5 percent. HHAs that do not submit required quality data will be subject to a negative 0.5 percent payment update. The fixed-dollar loss ratio will be 0.63 percent. Split percentage payments will be reduced in CY 2020 for existing HHAs, and will be eliminated for CY 2021. For CYs 2020 through 2022, a rural county classification will increase services provided to beneficiaries in rural locations.

Quality reporting program. The HH quality reporting program (HHQRP) includes 19 measures for CY 2021. CMS proposes removing the "pain interfering with activity" measure for CY 2022 due to concerns of over-prescription of opioid medications. Two new measures would be added for that same year under the quality measure domain "Transfer of Health Information." The measures would involve the transfer of information to both providers and patients post-acute care. These measures are intended to promote effective communication and care coordination. CMS also intends to update specifications to the discharge to community measure to exclude baseline nursing facility residents.

Value-based purchasing model. The HH value-based purchasing (HHVBP) model adjusts payments for HHAs in nine test states according to applicable measure performance. CMS proposes to publicly report HHAs’ total performance score (TPS) and TPS percentile ranking, generated from each agency’s CY 2020 annual report, after December 1, 2021. This will allow CMS to complete the CY 2020 report appeals process before releasing the data.

FederalRegisterIssuances: ProposedRules AgencyNews GeneralNews HomeBasedServicesNews ProviderPaymentNews NewsFeed

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