Great news! In the Medicare and Medicaid Programs; CY 2018 Home Health Prospective Payment System Rate Update and CY 2019 Case-Mix Adjustment Methodology Refinements; Home Health Value-Based Purchasing Model; and Home Health Quality Reporting Requirements Final rule scheduled to be published in the Federal Register on 11/07/2017, CMS discontinued their plans to move forward with the home health groupings model, that would have resulted in a home health spending cut of $950 million, or 4.3%, in 2019, when it would take effect. LeadingAge in their comment letter on the proposed rule to CMS, strongly opposed the implementation of the Home Health Groupings Model payment system for home health. More than 1,300 comments were left by stakeholders on the Federal Register during the public comment period, mostly urging CMS to drop the rule. This positive move forward demonstrates the importance for LeadingAge members to be engaged in the rule making process by working with their states and LeadingAge National in submitting comments to CMS on regulatory changes. More work needs to be done to develop a payment system that actually pays home agencies for the quality care they provide for Medicare beneficiaries. CMS will now take additional time to engage with stakeholders and move towards a system that shifts the focus from volume of services to a more patient-centered model.

Unfortunately in the Final rule, CMS also finalized a planned .04% decrease, or $80 million cut, for home health providers in 2018. There has been a consistent annual decrease in home health rates since 2014. These cuts appear to have resulted in more than 700 home health providers dropping from accepting Medicare over the last three years. LeadingAge is in the process of reviewing all the sections within the final rule. CMS finalized the 2018 standardized episodic payment rate of $3,039.64, which is more than the proposed rate of $3,038.43. There was also an increase in the per visit rates for 2018 compared to the proposed rule. As expected, the rates reflect a market basket update of 1% along with case mix creep adjustment of .97 percent. CMS maintains the proposed outlier policy and a non-routine supply conversion factor of $53.03 as proposed. 
CMS finalized the proposed changes to the HHVBP program. The OASIS based Drug education on All Medications will be removed beginning with payment year three. In addition, CMS finalized the number of completed HHCAPHS surveys that will be used for the HHVBP from 20 to 40 and will apply the 40 survey threshold to payment year one. CMS finalized the majority of the proposals related to the HHQRP beginning in 2019. The exceptions were to not finalize the standardized assessment item for Cognitive Function and Mental Status; Special Services, Treatments, and Interventions; and Impairments.

LeadingAge thanks Congresswoman Kristi Noems (R-SD) and the other members of Congress that pushed for CMS to rethink their proposal to move forward on the Home Health Groupings model. LeadingAge also thanks home health members, and state affiliate staff that joined us on calls to help us develop policy recommendation on the CY 2018 Home Health Prospective Payment System Rate Update and CY 2019 Case-Mix Adjustment Methodology Refinements; Home Health Value-Based Purchasing Model; and Home Health Quality Reporting Requirements rule.

The Centers for Medicare & Medicaid Services (CMS) had released the proposed CY2018 prospective payment system (PPS) rate update that reduces overall spending and proposes the implementation of the home health groupings model (HHGM) in 2019 . The proposed rule was published in the Federal Register on Friday, July 28, 2017.

The CY2018 Home Health Proposed Rule   (CMS-1672-P) recommends:

  • Home health agencies will see 2018 payments reduced by 0.4%, or $80 million, based on the proposals. These include a 1%, or $190 million, home health payment update; a 0.97% decrease to the national, standardized 60-day episode payment rate to account for nominal case-mix growth for an impact of -0.9%, or a $170 million decrease; and the sunset of the rural add-on provision, a $100 million decrease. Section 210 of the MACRA extended the rural add-on, which is an increase of 3 percent of the payment amount otherwise made for home health services furnished in a rural area, to episodes and visits ending before January 1, 2018. Therefore, for episodes and visits that end on or after January 1, 2018, a rural add-on payment will not apply. Section 411(c) of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) requires the market basket percentage increase to be 1 percent for home health payments for CY 2018. Therefore, the home health payment update percentage for HHAs that submit the required quality data for the Home Health Quality Reporting Program will be 1 percent. The home health update is decreased by 2 percentage points for those HHAs that do not submit quality data as required by the Secretary. For HHAs that do not submit the required quality data for CY 2018, the home health payment update will be -1 percent (1 percent minus 2 percentage points).
  • Proposed payment methodology refinements. CMS is proposing to remove or modify 35 current OASIS items, beginning on January 1, 2019. These OASIS items, or data elements within OASIS items, are not used in the calculation of quality measures already adopted in the HH QRP, nor are they used for previously established purposes unrelated to the HH QRP, including payment, survey, the HH VBP Model or care planning. Because they will no longer be used in any manner, CMS is proposing to no longer collect them. A list of these changes can be found at
  • Implementation of the home health groupings model (HHGM) in 2019. The new model could result in a $950 million Medicare payment cut for home health providers in calendar year 2019 if it is implemented in a non-budget neutral manner, and  $480 million if implemented in a partially budget-neutral manner. The groupings model would replace the current 60-day episode of care unit of payment to a 30-day period effective for services beginning on or after Jan. 1, 2019. In addition to changing episode timing, the model creates six new clinical groups to categorize patients based on their primary reason for home health care. CMS is not proposing a change to the split percentage payment approach in conjunction with proposing to change the unit of payment from a 60-day episode to a 30-day period of care; however, CMS is soliciting comments on the phase-out of the split percentage payment approach in the future. The proposed case-mix methodology refinements – called the home health groupings model (HHGM) – rely more heavily on clinical characteristics and other patient information to place 30-day periods of care into meaningful payment categories. The HHGM also eliminates therapy service use thresholds that are currently used to case-mix adjust payments under the HH PPS. The proposed HHGM includes changes to the episode timing categories, the addition of an admission source category, the creation of six clinical groups used to categorize 30-day periods of care based on the patient’s primary reason for home health care, revised functional levels and corresponding OASIS items, the addition of a comorbidity adjustment, and a proposed change in the Low-Utilization Payment Adjustment (LUPA) threshold. The LUPA add-on policy, the partial payment adjustment policy, and the methodology used to calculate payments for high-cost outliers would also be revised to be consistent with the proposed 30-day period of care.
  • Makes changes to the Home Health Value Based Purchasing (HHVBP) model .  CMS proposes to revise the definition of “applicable measure” to specify that HHAs in the HHVBP only would have to submit a minimum of 40 completed Home Health Care Consumer Assessment of Healthcare Providers and Systems (HHCAHPS) survey for purposes of receiving a performance score for any of the HHCAHPS measures, and to remove the Outcome and Assessment Information Set (OASIS)‑based measure, Drug Education on All Medications Provided to Patient/Caregiver during all Episodes of Care, from the set of applicable measures. We are also soliciting public comments on composite quality measures for future consideration.
  • Home Health Quality Reporting Provisions. CMS is proposing to adopt for the CY 2020 payment determination three measures to meet the requirements of the IMPACT Act. These three measures are assessment-based and are calculated using Outcome and Assessment Information Set (OASIS) data. The proposed measures are as follows:
    • Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury
    • Application of Percent of Residents Experiencing One or More Falls with Major Injury (NQF # 0674)
    • Application of Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631).

To meet the requirements for reporting of standardized patient assessment data required under section 1899B(b)(1) of the Act, CMS is proposing the data elements used to calculate the existing and proposed replacement pressure ulcer measures to meet the definition of standardized patient assessment data for medical conditions and co-morbidities. Additionally, CMS is proposing new, standardized data elements in four other categories: functional status; cognitive function and mental status; special services, treatments and interventions; and impairment. 

  • Request for Information (RFI) for feedback on improving the health care delivery system, how Medicare can contribute to making the delivery system less bureaucratic and complex, and how we can reduce burden for clinicians, providers and patients in a way that increases quality of care and decreases costs –thereby making the health care system more effective, simple, and accessible while maintaining program integrity and preventing fraud. CMS is soliciting ideas for regulatory, sub-regulatory, policy, practice and procedural changes to better accomplish these goals.CMS will not respond to RFI comment submissions in the final rule, but rather will actively consider all input in developing future regulatory proposals or future sub-regulatory guidance. 

LeadingAge submitted comments on the proposed rule. Our comment letter included the following recommendations:

  • Do not implement the HHGM until an analysis of the CPM + NRS approach can be completed to determine if the cost of home health staff transportation to provide patient services in rural and frontier areas would be reflected in the HHGM payment.
  • Include a rural add on payment, if the CPM + NRS approach fails to cover the cost of care.
  • CMS should not change from a 60 day Billing to 30 day Billing Under HHGMNational Standardized 30 day Payment Amount until there is a comprehensive analysis of the average number of visits during the initial 30 days for each of the  144 different HHGM payment groups. There should be an opportunity for stakeholders to work with CMS to determine if a move to a National Standardized 30 day Payment Amount would be an improvement to the home health payment methodology.
  • HHGM must have a billing cycle that reflects the cost of providing quality care throughout the episode.
  • Any change in the unit of payment must be implemented in a budget neutral manner.
  • Any change in the home health payment system must address the significantly lower reimbursement compared to cost for episodes providing care for patients with Behavioral Health conditions.
  • Any change in the home health payment system must pay for rehabilitation at a payment weight to adequately cover the cost of the care
  • Do not implement the HHGM until an analysis of the appropriate use of therapy, and the cost of the therapy could be completed including time for stakeholder involvement in formulating how to determine the payment for cases involving therapy 
  • Any change in the home health payment system must allow adjustments for all comorbidities that have a propensity to worsen health outcomes.
  • Any change in the home health payment system must allow adjustments for each comorbidity that are weighted based on how the comorbidity effects health outcomes
  • The development of measures that reflect person-centered domains are needed to improve our focus on outcomes for disadvantaged populations.

LeadingAge also submitted recommendations on  Flexibilities and Efficiencies within the Home Health regulations.