The proposed CY2024 Home Health Prospective Payment System Rate Update Proposed Rule was released on the Federal Register public inspection site on June 30, 2023, and is scheduled for publication in the Federal Register on July 10.

The summary below is not exhaustive; we encourage members to read the whole rule. The page numbers referenced in this summary refer to the public inspection copy of the rule. A copy of the fact sheet which accompanied the rule is available here.

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Monitoring the Effects of Implementation of PDGM

As part of the proposed rule, the Centers for Medicare & Medicaid Services (CMS) analyzed utilization, clinical groups, and comorbidities, admission source and timing, functional impairment level, and therapy visits since the implementation of PDGM. The charts outlining CMS’ findings can be found starting at Table B1.

Of particular interest, CMS’s review of CY2022 national, standardized 30-day period payment rate ($2,031.64) found that it was approximately 45% more than the estimated CY2022 estimated 30-day period cost of $1,402.27. In 2021, the average number of visits for non-LUPA, non- partial payment adjustments 30-day periods of care in 2021 was 8.81 visits. Using actual CY2022 claims data, the average number of visits for a non-LUPA, non-partial payment adjustments 30-day periods of care was 8.6 visits—a decrease of approximately 2.4%.

In 2017, the average number of visits for non-LUPA, non-partial payment adjustments 30-day periods of care in 2017 was estimated to be 10.5 visits. Therefore, the average number of visits for non-LUPA, non-partial payment adjustments, 30-day periods of care in CY2022 represents a decrease of 18% from the average number of visits for non-LUPA, non-partial payment adjustments 30-day periods of care in CY2017.

CMS cites MedPAC’s analysis that found decades of overpayment in home health due to agencies reducing the average number of visits per period to reduce period costs and cost growth in recent years being lower than the annual home health payment update percentages.

Proposed CY2024 Permanent Adjustment Calculations

CMS proposes to apply a −5.653% permanent adjustment to the CY2024 national, standardized 30-day payment rate based on the application of CY2022 data to the current payment methodology and accounting for the proposed, but not implemented -9.356% permanent adjustment proposed in CY2023.

CMS believes applying the full permanent adjustment of −5.635% in CY2024 would potentially reduce any future permanent adjustments, stem the accrual of the temporary payment adjustment dollar amount, and would help fulfill the statutory requirements to offset any increases or decreases on the impact of differences between assumed behavior and actual behavior changes on estimated aggregate expenditures.

CMS previously stated when they reduced the permanent adjustment in CY2023 that they would need to implement a greater rate reduction in future years, therefore CMS believes home health agencies had time to consider this proposed rate reduction.

Proposed CY2024 Temporary Adjustment Calculations

In order to calculate the temporary adjustment, CMS would add the CY2022 temporary adjustment dollar amount of $1,355,208,655 to the previously finalized CY2020 and 2021 dollar amounts for a total of $3,439,284,729. However, CMS is not proposing to take the temporary adjustment in CY2024. They will propose a temporary adjustment factor to the national, standardized base payment rate when they propose this temporary payment adjustment in future rulemaking. CMS will update these permanent and temporary adjustments in the final rule to reflect more complete claims data for CY2022.

Proposed CY2024 Home Health Payment Rate Updates

The proposed CY2024 home health market basket percentage increase is 3.0% based on the proposed 2021-based home health market basket (outlined below). If additional updates become available prior to the final rule, CMS will update the market basket percentage in the final rule. The proposed productivity adjustment for CY2024 is 0.3%. Therefore, the proposed CY2024 home health payment update percentage is 2.7% (3.0% market basket percentage increase, reduced by 0.3 percentage point productivity adjustment).

TABLE B36: CY2024 NATIONAL, STANDARDIZED 30-DAY PERIOD PAYMENT AMOUNT

 For HHAs that do not submit the required quality data for CY2024, the home health payment update would be 0.9 percent (2.9 percent minus 2 percentage points).

TABLE B37: CY2024 NATIONAL PER-VISIT PAYMENT AMOUNTS

Proposal To Rebase and Revise the Home Health Market Basket and Revise the Labor-Related Share

CMS has rebased and revised the home health market basket periodically through the years since CY2002. Beginning with CY2024, CMS proposes to rebase and revise the home health market basket from 2016 base to reflect a 2021 base year using October 1, 2020, to October 1, 2021, cost reports for freestanding home health agencies. This is the most complete year of data. CMS also proposes to revise by using different data sources, cost categories, and price proxies use in the input price index. CMS plans to monitor for COVID implications and make adjustments in future years.

CMS identified the following as the major cost weights:

• Wages/Salaries
• Benefits
• Transportation
• Professional Liability Insurance
• Fixed Capital
• Movable Capital
• Medical Supplies

TABLE B25: PROPOSED 2021-BASED HOME HEALTH MARKET BASKET COST WEIGHTS COMPARED TO 2016-BASED HOME HEALTH MARKET BASKET COST WEIGHTS

The decrease in the proposed wages and salaries cost weight of 0.9 percentage point and the decrease in the proposed benefits cost weight of 0.2 percentage point is primarily attributable to direct patient care contract labor costs. CMS’s analysis shows that a decrease in the compensation cost weight from 2016 to 2021 occurred, in aggregate among all agencies regardless of characteristics.

Proposed CY2024 Patient Driven Grouping Model (PDGM) Low Utilization Payment Adjustment (LUPA) Thresholds and PDGM Case-Mix Weights

For CY2024, CMS proposes to update the LUPA thresholds, functional impairment levels and comorbidity subgroups using CY2022 home health claims utilization data (as of March 17, 2023).

The proposed rule lists the revised LUPA Thresholds and case mix weights for all 432 case mix weights on Table B22 in the proposed rule. Members should review these proposed changes and assess their impact on the agency. This is especially important for the LUPA changes. Members need to be aware of any Home Health Resource Group (“HHRGs”) where the LUPA threshold will increase for 2024.

CMS proposes to update OASIS functional points as follows:

• M1800: Grooming – no change
• M1810: Current Ability to Dress Upper Body – no change
• M1820: Current Ability to Dress Lower Body – Response 2 decreased from 4 to 3 points and Response 3 decreased from 12 to 11
• M1830: Bathing – Response 2 decreased from 1 to 0 points, Response 3 or 4 decreased from 9 to 7, Response 5 or 6 decreased from 17 to 14
• M1840: Toilet Transferring – Response 2, 3 or 4 – increased from 5 to 6
• M1850: Transferring – no change
• M1860: Ambulation/Locomotion – Response 3 – decreased from 5 to 4
• M1033: Risk of Hospitalization – Four or more items – increased from 10 to 11

The comorbidity subgroups for CY2024 reflect the proposed coding changes detailed on the previous slide and include:

• 21 low comorbidity adjustment subgroups
• 101 high comorbidity adjustment interaction subgroups

Fixed-Dollar Loss (FDL) Ratio Changes for Outlier Payments

Using CY2022 claims data, CMS is proposing an FDL ratio of 0.31 for CY2024, a .13% decrease from CY2023.

Proposal for Disposable Negative Pressure Wound Therapy (dNPWT)

The Consolidated Appropriations Act of 2023 mandates several amendments to the Medicare separate payment for dNPWT devices beginning in CY2024. For the purposes of paying for a dNPWT device for a patient under a Medicare home health plan of care, CMS is proposing that the payment amount for CY2024 of $263.25.

Request for Information (RFI) for Access to Home Health Aide Services

CMS has heard that beneficiaries have difficulty receiving home health aide visits under the Medicare home health benefit and CMS’s own monitoring shows that home health aide visits have decreased. CMS wants to ensure that all Medicare beneficiaries receiving care under the home health benefit are afforded all covered services for which they qualify. Therefore, in an effort to better understand any challenges facing Medicare beneficiaries in accessing home health aide services, CMS solicits public comment on the following:

• Why is utilization of home health aides continuing to decline as shown in Table B2 and Figure B4 if the need for these services remains strong?
• To what extent are higher acuity individuals eligible for Medicare (for example, individuals with multiple co-morbidities or impairments of multiple activities of daily living) having more difficulty accessing home health care services, specifically home health aide services?
• What are notable barriers or obstacles that home health agencies experience relating to recruiting and retaining home health aides? What steps could home health agencies take to improve the recruitment and retention of home health aides?
• Are HHAs paying home health aides less than equivalent positions in other care settings (for example, are aides in the inpatient hospital setting or nursing home setting paid more than in home health)? What are the reasons for the disparity in hourly wages or total pay for equivalent services?
• In what ways could HHAs ensure that home health aides are consistently paid wages that are commensurate with the impact they have on patient care that they provide to Medicare beneficiaries?
• How effective is the coordination between Medicare and Medicaid to ensure adequate access to home health aide services? Please share insights on the level of utilization of Medicaid benefits by dually eligible beneficiaries for additional home health aide services that are not being provided by Medicare.
• Are physicians’ plans of care less reliant on home health aide services in the past, or are HHAs less willing/able to provide these services? If so, what are the primary reasons for why such services are not provided?
• What are the consequences of beneficiary difficulty in accessing home health aide services?

Home Health Quality Reporting Program (HH QRP)

Proposed Measures for 2025

CMS proposes to adopt a new outcome measure, Discharge Function Score (DC Function) measure, in the HH QRP beginning with the CY2025 HHQRP. This assessment-based outcome measure evaluates functional status by calculating the percentage of HH patients who meet or exceed an expected discharge function score. CMS proposes to replace the topped-out, cross-setting “Percent of Long-Term Care Hospital Patients With an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function” process measure with this new measure.

If finalized, HHAs would be required to report these OASIS assessment data beginning with patients discharged between January 1, 2024, and March 31, 2024, for the CY2025 HH QRP. Starting in CY2024, HHAs would be required to submit data for the entire calendar year beginning with the CY2026 HH QRP.

CMS is also proposing to begin publicly displaying data for the DC Function measure beginning with the January 2025 refresh of Care Compare, or as soon as technically feasible, using data collected from April 1, 2023, through March 31, 2024, (Quarter 2 2023 through Quarter 1 2024). HHAs that have fewer than 20 eligible cases would be distinguished with a footnote that notes that the number of cases/patient stays is too small to report.

Additionally, CMS proposes to adopt the COVID–19 Vaccine: Percent of Patients/Residents who are Up to Date (Patient/Resident COVID–19 Vaccine) measure for the HH QRP beginning with the CY2025 HH QRP. LeadingAge serves on the Measure Applications Partnership, the group which advises CMS on which quality measures to introduce into program, and roundly rejected this addition to the HHQRP along with the rest of the MAP. Unfortunately, CMS is not required to follow these recommendations. The proposed Patient/Resident COVID–19 Vaccine measure is an assessment-based process measure that reports the percent of home health patients that are up to date on their COVID–19 vaccinations per CDC’s latest guidance. This measure has no exclusions and is not risk adjusted.

If finalized, HHAs would be required to report these OASIS assessment data beginning with patients discharged between January 1, 2025, and March 31, 2025, for the CY2025 HH QRP.

Starting in CY2025, HHAs would be required to submit data for the entire calendar year beginning with the CY2026 HH QRP. Like the Discharge measure, CMS is proposing to begin publicly displaying data for the COVID–19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure beginning with the January 2026 refresh of Care Compare or as soon as technically feasible using data collected for Q2 2024 (April 1, 2024 through June 30, 2024).

Public Reporting Health Information Measures

In addition to these two new measures, CMS is proposing to begin publicly displaying data for the measures: (1) Transfer of Health (TOH) Information to the Provider—Post-Acute Care (PAC) Measure (TOH-Provider); and (2) Transfer of Health (TOH) Information to the Patient—Post-Acute Care (PAC) Measure (TOH-Patient).

OASIS Changes

For the OASIS tool, CMS plans to remove two OASIS items, the M0110—Episode Timing and M2220—Therapy Needs effective January 1, 2025. These items are no longer used in the calculation of quality measures already adopted in the HH QRP, nor are they being used currently for previously established purposes unrelated to the HH QRP, including payment, survey, the HH VBP Model or care planning.

Health Equity Update

In this year’s rule CMS provides and update on health equity efforts in quality measurement. In CY2023 Home Health Proposed Rule, CMS requested feedback on supporting health equity through quality measurement. CMS convened a Technical Expert Panel to review a potential structural measure and advise CMS on next steps. A summary of the Home Health and Hospice HE TEP meetings and final TEP recommendations are available here.

CMS did not propose any changes to the current measures or introduce any future measures. However, CMS did provide thoughts on what they could consider a future health equity measure like screening for social needs and intervention using the SDOH data items that are currently collect as SPADEs on the OASIS. These SDOH data items assess health literacy, social isolation, transportation problems, preferred language (including need or want of an interpreter), race, and ethnicity.

However, these SDOH data items differ from data elements considered as screening items in the acute care settings, which are housing instability, food instability, transportation needs, utility difficulties, and interpersonal safety. This means that CMS could consider in the future adding the SDOH data items to OASIS which are used by acute care providers.

Proposal To Codify HH QRP Data Completion Thresholds

CMS proposes to codify data completeness thresholds at § 484.245(b)(2)(ii)(A) for measures data collected using the OASIS. Under this section, CMS is proposing to codify requirements that HHAs must meet or exceed a data submission threshold set at 90% of all required OASIS and submit the data through the CMS designated data submission systems. This threshold would apply to required quality measures data and standardized patient assessment data collected adopted into the HH QRP. CMS also proposes to codify a policy at § 484.245(b)(2)(ii)(B) that a HHA must meet or exceed this threshold to avoid receiving a 2-percentage point reduction to its annual payment update for a given CY as codified at § 484.225(b). This is consistent with the FY2023 Hospice Proposed Rule as well.

Principles for Selecting and Prioritizing HH QRP Quality Measures and Concepts Under Consideration for Future Years: Request for Information (RFI)

CMS included another RFI to gather input on existing gaps in HH QRP measures and to solicit public comment on either fully developed HH measures, fully developed measures in other programs that may be appropriate for the HH QRP, and measurement concepts that could be developed into HH QRP measures, to fill these measurement gaps.

CMS plans to prioritize these measures by the four following objectives: actionability, comprehensiveness and conciseness, focus on provider responses to payment, and alignment with CMS statutory requirements and key program goals.

The gaps identified by CMS include:

• Cognitive Function
• Behavioral and Mental Health
• Chronic Conditions and Pain Management

CMS is soliciting feedback on the following questions as well as input on data available to develop measures, approaches for data collection, perceived challenges or barriers, and approaches for addressing challenges.

• Principles for Selecting and Prioritizing HH QRP Measures
  • To what extent do you agree with the principles for selecting and prioritizing measures?
  • Are there principles that you believe CMS should eliminate from the measure selection criteria?
  • Are there principles that you believe CMS should add to the measure selection criteria?
  • How can CMS best consider equity in measures?
• HH QRP Measurement Gaps
  • CMS requests input on the identified measurement gaps, including in the areas of cognitive function, behavioral and mental health, and chronic conditions and pain management.
  • Are there gaps in the HH QRP measures that have not been identified in this RFI?
• Measures and Measure Concepts Recommended for Use in the HH QRP
  • Are there measures that you believe are either currently available for use, or that could be adapted or developed for use in the HH QRP program to assess performance in the areas of: (1) cognitive functioning; (2) behavioral and mental health; (3) chronic conditions; (4) pain management; or (5) other areas not mentioned in this RFI?

Proposed Changes to the Expanded Home Health Value-Based Purchasing (HHVBP) Model

CMS is proposing to make four changes to the HHVPB applicable measure set.

First, CMS proposes to codify the eight HHVBP measure removal factors effective in CY2024 to make the program consistent with other CMS quality reporting programs including the home health quality reporting program as noted above. These factors include:

Factor 1. Measure performance among HHAs is so high and unvarying that meaningful distinctions in improvements in performance can no longer be made (that is, topped out).

Factor 2. Performance or improvement on a measure does not result in better patient outcomes.

Factor 3. A measure does not align with current clinical guidelines or practice.

Factor 4. A more broadly applicable measure (across settings, populations, or conditions) for the particular topic is available.

Factor 5. A measure that is more proximal in time to desired patient outcomes for the particular topic is available.

Factor 6. A measure that is more strongly associated with desired patient outcomes for the particular topic is available.

Factor 7. Collection or public reporting of a measure leads to negative unintended consequences other than patient harm.

Factor 8. The costs associated with a measure outweigh the benefit of its continued use in the program.

Second, CMS is proposing to remove five measures from the current applicable measure set and add three measures starting in CY2025.

Measures proposed for removal:

• OASIS-based Discharged to Community (DTC);
• OASIS-based Total Normalized Composite Change in Self-Care (TNC Self-Care);
• OASIS based Total Normalized Composite Change in Mobility (TNC Mobility);
• claims-based Acute Care Hospitalization During the First 60 Days of Home Health Use (ACH); and
• claims-based Emergency Department Use without Hospitalization During the First 60 Days of Home Health (ED Use).

Measures proposed for inclusion:

• claims-based Discharge to Community-Post Acute Care (DTC-PAC) Measure for Home Health Agencies;
• OASIS based Discharge Function Score (DC Function) measure; and
• claims-based Home Health Within-Stay Potentially Preventable Hospitalization (PPH) measure.

Third, due to the net change in the number of measures proposed, CMS is proposing to adjust the weights for the measures in the OASIS-based and claims-based measure categories starting in CY2025.

• Claims-based:
  • Discharge to Community: 9 for large volume agencies and 12.857 for small volume agencies
  • Potentially Preventable Hospitalization (PPH): 26 for large volume agencies and 37.143 for small volume agencies
• OASIS-based:
  • Discharge Function Score (DC Function): 20 for large volume agencies and 28.571 for small volume agencies

Lastly, CMS is proposing to update the Model baseline year for all measures starting in CY2025.

CMS is also proposing to amend § 484.375(b)(5) to specify that an HHA may request Administrator review of a reconsideration decision within seven days from CMS’ notification to the HHA contact of the outcome of the reconsideration request.

Medicare Home Intravenous Immune Globulin (IVIG) Items and Services

The CAA 2023 added coverage and payment of items and services related to administration of IVIG in a patient’s home of a patient with a diagnosed primary immune deficiency disease furnished on or after January 1, 2024.

Payment for these items and services is required to be a separate bundled payment made to a supplier for all administration items and services furnished in the home during a calendar day. The standard Part B coinsurance and the Part B deductible will be applied.

In addition, the statute states that the separate bundled payment for these IVIG administration items and services does not apply for individuals receiving services under the Medicare home health benefit.

Proposed Changes to the Provider and Supplier Enrollment Requirements

In addition to the hospice specific program integrity proposals offered in the CY2024 Home Health Proposed Rule, CMS includes additional provisions impacting all Medicare providers and suppliers including hospices.

Provisional Period of Enhanced Oversight: The Secretary of the Department of Health and Human Services (HHS) has authority to provide for a provisional period of between 30 days and 1 year during which new providers and suppliers would be subject to enhanced oversight (so-called Provisional Period of Enhanced Oversight – PPEO).

This oversight can include prepayment review and payment caps, among other actions. CMS previously implemented a PPEO through sub-regulatory means for “new” HHAs such that their Requests for Anticipated Payments (RAPs) were suppressed (not paid) for a period of between 30 days and one year.

In the rule CMS is proposing regulations under which a “new” provider would be defined as any of the following:

• A newly-enrolling Medicare provider or supplier (this includes providers that must enroll as a new provider in accordance with the change in majority ownership provisions in Section 424.550(b)).
• A certified provider or certified supplier undergoing a change of ownership consistent with the principles of 42 CFR 489.18 (including providers that qualify under Section 424.550(b)(2) for an exception from the change in majority ownership requirements in Section 424.550(b)(1) but which are undergoing a change of ownership under 42 CFR 489.18).
• A provider or supplier (including an HHA or hospice) undergoing a 100% change of ownership via a change of information request under Section 424.516.

Secondly, CMS is proposing that the effective date of the PPEO’s commencement is the date on which the new provider or supplier submits its first claim (rather than, for example, the date the first service was performed or the effective date of the ownership change). CMS has chosen this approach so that a provider or supplier is unable to avoid the PPEO by delaying billing until the PPEO’s expiration—which happened during the PPEO instituted for HHAs previously.

• These proposed changes to the PPEO are part of the home health proposed payment rule with comments due August 29, so if finalized as proposed would go into effect in the fall. CMS used its existing PPEO authority and announced that all newly enrolled hospice providers in California, Nevada, Arizona, and Texas will be subject to an enhanced oversight process. This is effective starting July 13, 2023. This initiative will include providers who started enrollment prior to July 13, 2023, but have not yet received their final approval letter from CMS. It will not be retroactive.
• CMS said in their recent meeting with LeadingAge and other stakeholders that this authority allows them to use a targeted approach that a moratorium might not have. LeadingAge followed up with CMS with further questions about how CMS can expand this enhanced oversight to new areas that may become problem areas (or removes the PPEO from the states in question).

Retroactive Provider Agreement Termination: Under current policy, a provider may voluntarily terminate its provider agreement with Medicare and may do so on a retroactive basis. CMS is proposing to incorporate into regulation that a provider may request a retroactive termination date, but only if no Medicare beneficiary received services from the facility on or after the requested termination date.

Deactivation for 12 Months of Non-Billing:  Currently CMS has a policy in place under which it has the authority to deactivate Medicare billing privileges for several reasons. Such billing privileges can be reactivated upon submission of required information. CMS has growing concerns about schemes under which providers hold multiple billing numbers so they can move between provider numbers. For example, one provider number may be subject to an overpayment or investigation, a different (dormant) provider number may be used to continue to bill services.

To combat these schemes, CMS is proposing to revise its requirements at Section 424.540(a)(1) that currently allow for deactivation of a provider number after 12 months if no billings have been submitted; the proposed new time period is six months, after which CMS could deactivate billing privileges.

Previously Waived Fingerprinting of High-Risk Providers and Suppliers: During the COVID-19 Public Health Emergency(PHE), CMS temporarily waived the requirement for fingerprint-based criminal background checks (FBCBCs) for 5 percent or greater owners of newly enrolling providers and suppliers in the high-risk screening category. CMS now plans to perform FBCBCs for high-risk providers and suppliers that initially enrolled during the PHE upon their revalidation once the PHE ends. CMS is proposing regulatory language that would provide authority to conduct these FBCBCs despite the waivers.

CMS is also proposing to modify existing regulatory language related to providers and suppliers at the moderate-risk level and clarify that certain high-risk providers revert to the moderate risk level once they have undergone FBCBCs when they enrolled initially or upon revalidation.

Provisions Related to Reapplication Bar in the Home Heath Rule

Expansion of Reapplication Bar:  CMS is authorized to prohibit a prospective provider or supplier from enrolling in Medicare for up to three years if its enrollment application is denied because the provider or supplier submitted false or misleading information on or with (or omitted information from) its application in order to enroll. CMS is proposing to expand the maximum length of reapplication bar from the current three years to 10 years.

Ordering, Referring, Certifying, and Prescribing Restrictions: CMS is proposing that any provider or supplier currently subject to a reapplication bar may not order, refer, certify, or prescribe Medicare-covered services, items, or drugs. Further, CMS is proposing a prohibition on Medicare payment for any otherwise covered service, item, or drug that is ordered, referred, certified, or prescribed by a provider or supplier that is currently under a reapplication bar.

CMS is also proposing that a physician or other eligible professional who had a felony conviction within the previous 10 years, that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries, may not order, refer, certify, or prescribe Medicare-covered services, items, or drugs. Further, CMS is proposing a prohibition on Medicare payment for any otherwise covered service, item, or drug that is ordered, referred, certified, or prescribed by a physician or other eligible professional who had a felony conviction within the previous 10 years that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries. These provisions would apply regardless of whether the provider or supplier has opted out of Medicare.