Fact sheet

CMS Announces Proposed Payment Changes for Medicare Home Health Agencies for 2018 and 2019

CMS Announces Proposed Payment Changes for Medicare Home Health Agencies for 2018 and 2019

Today, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule (CMS-1672-P) that would update the calendar year (CY) 2018 Medicare payment rates and the wage index for home health agencies (HHAs) serving Medicare beneficiaries. Additionally, the proposed rule proposes changes to the home health prospective payment system (HH PPS) case-mix adjustment methodology, including a change in the unit of payment from 60-day episodes of care to 30-day periods of care, to be implemented January 1, 2019. 

The proposed rule also includes proposals for the Home Health Value-Based Purchasing Model and the Home Health Quality Reporting Program, as well as a Request for Information (RFI) to welcome feedback on positive solutions for program simplification, flexibility, and innovation.

Proposed Rule Details

Payment Policy Provisions for CY 2018 

CMS projects that Medicare payments to HHAs in CY 2018 would be reduced by 0.4 percent, or $80 million, based on the proposed policies. The proposed decrease reflects the effects of a 1 percent home health payment update percentage ($190 million increase); a -0.97 percent adjustment to the national, standardized 60-day episode payment rate to account for nominal case-mix growth for an impact of -0.9 percent ($170 million decrease); and the sunset of the rural add-on provision ($100 million decrease). 

Annual Home Health Payment Update Percentage 

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).

Adjustment to Reflect Nominal Case-Mix Growth

CMS will implement a 0.97 percent reduction to the national, standardized 60-day episode rate in CY 2018 to account for nominal case-mix growth from 2012 to 2014. CY 2018 will be the third year of the three-year phase-in of the reduction to account for nominal case-mix growth. The -0.97 percent adjustment to the national, standardized 60-day episode payment rate to account for nominal case-mix growth results in an estimated decrease in HH PPS payments for CY 2018 of -0.9 percent. 

Sunset of the Rural Add-on Provision 

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. 

Case-Mix Adjustment Methodology Refinements for CY 2019

This rule proposes case-mix methodology refinements, including a change in the unit of payment from 60-day episodes of care to 30-day periods of care, to be implemented for 30-day periods of care beginning on or after January 1, 2019. 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. 

CMS is soliciting comments on these proposed payment methodology refinements.

Home Health Quality Reporting Provisions

Section 2(a) of the Improving Medicare Post-Acute Care Transformation Act of 2014 (the IMPACT Act) amended Title XVIII of the Social Security Act (the Act) by adding new section 1899B, which requires HHAs, Skilled Nursing Facilities, Inpatient Rehabilitation Facilities, and Long-Term Care Hospitals to report: standardized patient assessment data, data on quality measures, and data on resource use and other measures. The data must be standardized and interoperable so as to allow for the exchange of such data among providers. It also requires the modification of the PAC assessment instruments to provide for the submission and comparison of such standardized patient assessment data. These requirements are intended to enable interoperability as well as improve quality and discharge planning, among other purposes. 

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); and
  • 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. Unless otherwise specified, this data would be collected at start or resumption of care and discharge. More information about the specifications for standardized measures and standardized data elements can be found at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html. 

CMS also reviewed the OASIS-C2 item set to identify candidate items for removal. Based on this analysis, 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, we are proposing to no longer collect them. A list of these changes can be found at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html

CMS is proposing to formalize its processes for requesting reconsideration of determinations regarding compliance with the HH QRP, as well as its policies for requesting exceptions and extensions of reporting timeframes. 

Home Health Value-Based Purchasing Model

In the CY 2018 HHS PPS proposed rule, CMS proposes to refine 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.

Request for Information

CMS would like to start a national conversation about 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. Ideas could include recommendations regarding payment system re-design; elimination or streamlining of reporting; monitoring and documentation requirements; operational flexibility; and feedback mechanisms and data sharing that would enhance patient care, support the doctor-patient relationship in care delivery, and facilitate patient-centered care within hospices. Ideas could also include recommendations regarding when and how CMS issues regulations and policies and how CMS can simplify rules and policies for beneficiaries, clinicians, providers, and suppliers.

In responding to the RFI, CMS should be provided with clear and concise proposals that include data and specific examples. If the proposals involve novel legal questions, analysis regarding CMS’ authority is welcome. 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. 

For additional information about the Home Health Prospective Payment System, visit https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/index.html.

For additional information about the Home Health Value-Based Purchasing Model, visit https://innovation.cms.gov/initiatives/home-health-value-based-purchasing-model.

The proposed rule can be viewed at https://www.federalregister.gov/public-inspection

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