CMS Finalizes Calendar Year 2022 Home Health Prospective Payment System Rate Update; Home Health Value-Based Purchasing Model Expansion
Today, the Centers for Medicare & Medicaid Services (CMS) acted to improve home health care for older adults and people with disabilities through a final rule that would accelerate the shift from paying for Medicare home health services based on volume to a system that pays for value. The rule finalizes a nationwide expansion of the successful Home Health Value- Based Purchasing (HHVBP) Model and makes updates to the Medicare Home Health Prospective Payment System (PPS) and the home infusion therapy services payment rates for Calendar Year (CY) 2022, in accordance with existing statutory and regulatory requirements.
This final rule makes permanent the changes to the home health Conditions of Participation (CoP) that were implemented during the COVID-19 public health emergency (PHE) and finalizes changes to the CoPs to implement a provision of the Consolidated Appropriations Act, 2021.
This rule also finalizes changes to the Home Health, Long -Term Care Hospital (LTCH), and Inpatient Rehabilitation Facility (IRF) Quality Reporting Programs (QRP); finalizes revisions to the infection control requirements for Long-Term Care Facilities (Medicaid nursing facilities and Medicare skilled nursing facilities, also collectively known as “nursing homes”) that will extend the mandatory COVID-19 reporting requirements beyond the current COVID-19 PHE until December 31, 2024; incorporates into regulation several existing Medicare provider enrollment policies; and finalizes survey and enforcement requirements for hospice programs to implement provisions of the Consolidated Appropriations Act, 2021.
Home Health Value-Based Purchasing (HHVBP) Model Expansion
Under the authority of Section 1115A of the Social Security Act, the CMS Innovation Center (Innovation Center) implemented the original HHVBP Model on January 1, 2016. This Model tests whether payment incentives can significantly change health care providers’ behavior to improve quality of care through payment adjustments based on quality performance during a given model performance year. The HHVBP Model’s current participants provide services in nine randomly selected states and comprise all Medicare-certified Home Health Agencies (HHAs) providing services in Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee, and Washington. The evaluation findings showed that participants’ performance from 2016-2018 achieved an average 4.6 percent improvement in quality scores as well as average annual savings of $141 million to Medicare. The CMS Chief Actuary’s certification and determinations made by the Secretary designated the HHVBP Model as eligible for expansion nationwide through rulemaking. On January 8, 2021, CMS announced its intention to expand the Model no earlier than January 1, 2022, through notice and comment rulemaking, and a proposal for nationwide expansion was included in the CY 2022 HH PPS proposed rule.
CMS is expanding the HHVBP Model nationwide. The HHVBP Model is one of four Innovation Center models that have met the requirements to be expanded in duration and scope since 2010. Given this expansion, CMS is also ending the HHVBP Model for participants in the original model’s nine states. The first performance year of the expanded HHVBP Model will be CY 2023, with quality performance data from that year used to calculate payment adjustments under the expanded Model in CY 2025. Throughout 2022, CMS will provide technical assistance to HHAs to ensure they understand how performance will be assessed as finalized in this rule.
CY 2022 Payment Updates and Policy Changes Updates for Home Health Agencies and Home Infusion Therapy Suppliers
Updates to the Home Health PPS for CY 2022
The final rule updates CY 2022 Medicare home health payment rates and the wage index for HHAs, in accordance with existing statutory and regulatory requirements. CMS estimates that Medicare payments to HHAs in CY 2022 would increase in the aggregate by $570 million (3.2 percent). The $570 million increase in estimated payments for CY 2022 reflects the effects of the CY 2022 home health payment update percentage of 2.6 percent ($465 million increase), an estimated 0.7 percent increase that reflects the effects of the updated fixed-dollar loss ratio ($125 million increase) and an estimated 0.1 percent decrease in payments due to the changes in the rural add-on percentages for CY 2022 ($20 million decrease). The Home Health PPS uses the latest core-based statistical area (CBSA) delineations and the latest available “pre-reclassified” hospital wage data collected under the Hospital Inpatient Prospective Payment System. The wage index is applied to the labor share of the payment rate to account for differing wage levels in areas in which home health services are rendered.
Recalibration of Patient-Driven Groupings Model (PDGM) Case-Mix Weights
Each of the 432 payment groups under the PDGM has an associated case-mix weight and low utilization payment adjustment (LUPA) threshold. CMS’ policy is to annually recalibrate the case-mix weights using the most complete utilization data available at the time of rulemaking. In this final rule, we are finalizing the recalibration of the PDGM case-mix weights, functional levels, and comorbidity adjustment subgroups while maintaining the CY 2021 LUPA thresholds for CY 2022 to more accurately pay for the types of patients HHAs are serving.
Occupational Therapy LUPA Add-on Factor
Division CC, Section 115, of the Consolidated Appropriations Act, 2021 (CAA 2021) included provisions to allow Occupation Therapists (OTs) to conduct initial and comprehensive assessments for all Medicare beneficiaries under the home health benefit when the plan of care does not initially include skilled nursing care, but includes either Physical Therapy (PT) or Speech-Language Pathology (SLP). Because of this change, we are finalizing conforming regulation text changes for this provision. Since OTs can now conduct the initial and comprehensive assessments, CMS is establishing a LUPA add-on factor for calculating the LUPA add-on payment amount for the first skilled occupational therapy visit in LUPA periods that occurs as the only period of care or the initial 30-day period of care in a sequence of adjacent 30-day periods of care. Currently, there is insufficient data regarding the average excess of minutes for the first visit in LUPA periods when the initial and comprehensive assessments are conducted by OTs. Therefore, CMS will utilize the physical therapy LUPA add-on factor as a proxy until CY 2022 data is available to establish a more accurate occupational therapy add-on factor for the LUPA add-on payment amounts.
Updates to the Home Infusion Therapy Benefit for CY 2022
CMS is updating the home infusion therapy services payment rates for CY 2022 as required by law. In addition, CMS is updating the geographic adjustment factor used for wage adjustment and to maintain the percentages finalized in the CY 2020 Home Health PPS final rule with comment period for the initial and subsequent visit payment policy. The overall economic impact of updating the payment rates for home infusion therapy services is expected to be an increase in payments to home infusion therapy suppliers of 5.1 percent, based on the percentage increase in the consumer price index for all urban consumers (CPI-U) reduced by the productivity adjustment for CY 2022. The CPI-U for the 12-month period ending in June of 2021 is 5.4 percent and the corresponding productivity adjustment is 0.3 percent.
Home Health Quality Reporting Program Updates
The Home Health Quality Reporting Program (Home Health QRP) is a pay-for-reporting program for HHAs that report quality data to CMS. HHAs that do not meet reporting requirements receive a 2 percentage point reduction to their annual market basket percentage update for that calendar year.
This rule improves the Home Health QRP by finalizing several proposals, including removing an OASIS-based measure that is no longer demonstrating meaningful differences in performance and replacing two claim-based measures with a new claims-based measure that addresses concerns raised surrounding attribution and is more strongly associated with desired patient outcomes. In supporting the coordination of care, CMS is finalizing its proposal that effective January 1, 2023, HHAs begin collecting data on the Transfer of Health Information to Provider-Post Acute Care measure, the Transfer of Health Information to Patient-PAC measure, as well as six categories of standardized patient assessment data elements effective January 1, 2023.
Fast Healthcare Interoperability Resources (FHIR) in support of Digital Quality Measurement in Quality Reporting Programs (QRP) – RFI
CMS is working to further the mission to improve the quality of health care for beneficiaries through measurement, transparency, and public reporting of data. We believe that advancing our work with use of the FHIR standard offers the potential for supporting quality improvement and reporting, which will improve care for our beneficiaries. We received feedback on our future plans to define digital quality measures (dQMs) for the Home Health QRP. We also received feedback on the potential use of FHIR for (dQMs) within the Home Health QRP aligning where possible with other quality programs. We are currently analyzing the feedback received for future consideration in program development and future rulemaking.
Long-Term Care Hospital (LTCH) Quality Reporting Program and Inpatient Rehabilitation Facility (IRF) Quality Reporting Program
CMS is finalizing its proposals to revise compliance dates for the Transfer of Health Information to Provider-Post Acute Care measure, the Transfer of Health Information to Patient- PAC measure, and six categories of standardized patient assessment data elements under the IRF QRP and LTCH QRP beginning October 1, 2022. This earlier adoption also supports the recent Executive Order 13985 of January 20, 2021, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government.
Additionally, the rule finalizes the mandatory COVID-19 reporting requirements for Long Term Care facilities (nursing homes) established as a part of the May 2020 and May 2021 Interim Final Rules beyond the current COVID-19 PHE until December 31, 2024. Extending the mandatory COVID-19 reporting requirements will allow for effective surveillance of this novel virus to continue well beyond the end of the PHE and ensure that CMS has timely and actionably data to help drive additional response or action should facilities experience new COVID-19 infections or outbreaks.
Home Health Conditions of Participation (CoPs)
CMS is finalizing policies that makes permanent current blanket waivers related to home health aide supervision and the use of telecommunications in conducting assessment visits. CMS issued these waivers for Medicare participating home health agencies during the COVID-19 PHE. While we are finalizing the limited use of telecommunications technology when performing the 14-day supervisory visit requirement when a patient is receiving skilled services, we expect that in most instances, the HHAs would plan to conduct the 14-day supervisory assessment during an on-site, in person visit, and that the HHA would use interactive telecommunications systems option only for unplanned occurrences that would otherwise interrupt scheduled in-person visits.
CMS is also updating the home health (CoPs) to implement Division CC, section 115 of CAA 2021, which requires CMS to permit an occupational therapist to conduct the initial home health assessment visit and complete the comprehensive assessment under the Medicare program, but only when occupational therapy is on the home health plan of care with physical therapy and/or speech therapy, and skilled nursing services are not initially on the plan of care.
Survey and Enforcement Requirements for Hospice Programs
CMS continues to review and revise our health and safety requirements and survey processes to ensure that they are effective in driving quality of care for hospice programs. In this final rule, CMS is finalizing provisions to implement Division CC, section 407(a) of the CAA 2021 with respect to transparency, oversight, and enforcement of health and safety requirements for hospice programs.
These provisions enhance the hospice program survey process by requiring the use of multidisciplinary survey teams, prohibiting surveyor conflicts of interest, expanding CMS-based surveyor training to accrediting organizations (AOs), and requiring AOs with CMS-approved hospice programs to begin use of the Form CMS-2567. Additionally, the provisions require that state survey agencies establish a hospice program complaint hotline. Finally, the rule implements the CAA 2021 provision requiring the establishment of enforcement remedies that may be imposed instead of, or in addition to, termination of participation in the Medicare program for noncompliant hospice programs. We are finalizing the proposed surveyor prohibition of conflicts of interest and enforcement remedy provisions as proposed with two exceptions. First, we are not finalizing our proposal for the Special Focus Program for poor-performing hospice programs that have repeated cycles of serious health and safety deficiencies. Numerous comments indicated CMS should not finalize the proposed provision until a Technical Expert Panel (TEP) is convened to further define the parameters and provide a targeted approach based on national measures. Therefore, we are establishing a TEP with stakeholder engagement that integrates the public comments and will finalize this program through future rulemaking. Second, the suspension of payment enforcement remedy will be finalized with modifications to limit the suspension of payment to all new patient admissions, rather than suspension of all or part of the payments to which a hospice program would otherwise be entitled.
The CAA 2021 provisions expanding requirements for AOs will apply to AOs that CMS has approved to accredit hospice programs. CMS “deems” accredited hospice programs to meet Medicare requirements. Currently, there are three CMS-approved AOs for hospice programs: Accreditation Commission for Health Care (ACHC), Community Health Accreditation Partner (CHAP), and The Joint Commission (TJC). Half of all the Medicare-certified hospices have been deemed by these AOs.
Medicare Provider Enrollment
This final rule incorporates into regulation several Medicare provider enrollment sub-regulatory policies. These policies involve, but are not limited to: (1) deactivations; (2) the rejection and return of provider enrollment applications; and (3) the establishment of effective dates for various provider enrollment transactions.
The final rule can be downloaded from the Federal Register at:
For additional information about the Home Health Patient-Driven Groupings Model, visit https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/HH-PDGM
For additional information about the Home Infusion Therapy Services benefit, visit https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Home-Infusion-Therapy/Overview.html