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CMS Finalizes Payment and Policy Changes for Home Health Agencies

The Centers for Medicare & Medicaid Services (CMS) recently finalized payment and policy changes for Home Health Agencies (HHAs) and Home Infusion Therapy (HIT) suppliers for calendar years (CYs) 2019 and 2020.  The final rule contains Medicare payment updates for CY 2019 and implements provisions mandated by the Bipartisan Budget Act of 2018 (BBA) and the 21st Century Cures Act.  CMS continued its commitment to shift Medicare from volume-based to value-based payments in its final rule through initiatives such as the Home Health Value-Based Purchasing (HHVBP) Model, the Home Health Quality Reporting Program (HH QRP), and the Patient-Driven Groupings Model (PDGM).  CMS also estimated that the burden reduction resulting from PDGM implementation and HH QRP changes alone would result in $60 million in annualized cost savings for HHAs.

The final rule includes the following revisions and highlights:

  • Home Health Prospective Payment System (HH PPS) Rate Changes for CY 2019.
  • CMS estimated a 2.2 percent, or $420 million, increase in Medicare HHA payments for CY 2019. The increase resulted from a 2.2 percent payment update percentage.  A 0.1 percent, or $20 million, payment increase was also applied to offset the decreasing fixed-dollar-loss (FDL) ratio so that no more than 2.5 percent of total payments would be outlier payments.  The 0.1 increase was offset by a 0.1 percent payment decrease from the new rural add-on policy mandated by the BBA.  Under the rural add-on policy, CMS will classify rural counties and equivalent areas into separate categories based on high home health utilization, low population density, and all other areas.  The rural add-on payments will be determined by the category classification for CYs 2019 through 2022.
  • Modernized HH PPS Case-Mix Classification System.
  • The final rule also implemented BBA mandates for the case-mix classification system required for CY 2020. First, the unit of payment under the HH PPS changed from 60-day episodes of care to 30-day episodes of care.  This is to be implemented in a budget-neutral manner on January 1, 2020.  The BBA also mandated that Medicare stop determining home health payments by the number of therapy visits provided for 2020.  According to CMS, such therapy thresholds encourage volume over value and do not acknowledge differing patient needs.
  • Patient-Driven Groupings Model (PDGM).
  • CMS finalized the PDGM for home health care periods on or after January 1, 2020. The PDGM more closely reflects patients’ needs by relying on clinical characteristics and other patient information, which removes the incentive to over-provide therapy.  CMS predicted that the patient characteristics will place home health care periods into more meaningful payment categories, which will allow Medicare to move toward a more value-based payment system. A Home Health Claims—Outcome and Assessment Information (OASIS) Limited Data Set will be provided with the CY 2019 HH PPS final rule upon request to support assessment of the PDGM’s effects.  CMS is also making agency-level impacts and an interactive Grouper Tool available to allow HHAs to determine case-mix weights for their populations.
  • Remote Patient Monitoring under the Medicare Home Health Benefit.
  • The definition of “remote patient monitoring” for the Medicare home health benefit was finalized in the final rule. The definition will include the cost of remote patient monitoring as an allowable cost on the HHA cost report.  CMS finalized the definition in hopes that it will encourage more HHAs to adopt the remote patient monitoring technology.
  • New HIT Services Temporary Transition Payment.
  • CMS is implementing a temporary transitional payment for HIT services for CYs 2019 and 2020, as mandated by the BBA. The payment will pay eligible HIT suppliers for associated professional services related to administering certain drugs and biologics infused through a durable medical equipment pump, training and education, and remote monitoring and monitoring services. CMS is also monitoring the effects on access of care for the finalized definition of, “infusion drug administration calendar day.”  Additional rulemaking or guidance will be given regarding that definition for the temporary transitional payments if warranted by monitoring results or stakeholder concerns.
  • Permanent HIT Benefit.
  • The 21st Century Cures Act created a new, permanent Medicare benefit for HIT services beginning January 1, 2021. The final rule implements elements of the permanent HIT benefit, including health and safety standards for HIT, an accreditation process for qualified HIT suppliers, and an approval and oversight process for organizations that accredit qualified HIT suppliers.
  • Home Health Quality Reporting Program (HH QRP) Provisions.
  • CMS is finalizing the policy to remove previously-adopted HH QRP measures based on eight measure removal factors as part of its Meaningful Measures Initiative. This removal will more closely align the HH QRP with other CMS quality improvement programs.  Seven quality measures will be removed based on one of the eight measure removal factors.  CMS also clarified that not all OASIS data will be used to determine whether an HHA has satisfied HH QRP reporting requirements for a program year.
  • Home Health Value-Based Purchasing (HHVBP) Model.

     CMS is finalizing several changes to the HHVBP Model beginning with Performance Year 4, including:

  • Removal of two OASIS-based measures—the Influenza Immunization Received for Current Flu Season and Pneumococcal Polysaccharide Vaccine Ever Received—from the set of applicable measures;
  • Replacement of three OASIS-based measures with two new composite measures on total change in self-care and mobility;
  • Changes to how the Total Performance Scores are calculated by changing the weighting methodology for the OASIS-based, claims-based, and HHCAHPS measures; and
  • A change to the scoring methodology by reducing the maximum amount of improvement points and HHA can earn.
  • CMS also provided an update to its progress on developing public reporting of performance under the HHVBP Model.
  • Regulatory Burden Reduction.
  • The final rule eliminated the requirement for certifying physicians to estimate how much longer skilled services are required when recertifying continued home health care. CMS eliminated this requirement in hopes that claim denials resulting solely from the missing recertification statements will be reduced.  CMS estimated an annual costs savings of $14.2 million for certifying physicians beginning in CY 2019 as a result of this elimination.  Amendments to current regulations were also finalized to allow medical record documentation from HHAs to be used for supporting certification or recertification of home health eligibility.
  • MyHealthEData Request for Information (RFI).
  • CMS announced that it will consider feedback received from its RFI on revising the CMS patient health and safety standards in future guidance and rulemaking. These standards are required for providers and suppliers participating in the Medicare and Medicaid programs to further advance electronic exchange of information between hospitals and community providers.

The final rule is available at: