In the short term, CMS plans to reduce home health agencies’ payments by 0.4% next year. In the long term, CMS plans to drastically redesign the way agencies are paid beginning in 2019.
 
CMS made these announcements in the 2018 proposed PPS rule for home health, which was posted July 25.
 
Within the proposed rule CMS announced plans to shift to the Home Health Groupings Model (HHGM) beginning Jan. 1, 2019.
 
Unlike the current system, the groupings model doesn’t rely on the number of therapy visits performed to influence payment. It instead “relies more heavily on clinical characteristics and other patient information (diagnosis, functional level, comorbid conditions and admission source),” the proposal states.
 
The groupings model also uses a 30-day period of care — not a 60-day episode. That’s because most 60-day episodes have more visits on average during the first 30 days. Dividing a single 60-day episode into two periods allows payments to be more accurately apportioned and would have no impact to the OASIS, according to an explanation given by CMS contractor Abt Associates, Cambridge, Mass., during a prior webinar about the model.
 
 “In the HHGM, the HHRG and payment would be determined based on the patient’s admission source (community or institutional), clinical grouping (medication management teaching and assessment/MMTA, neuro/rehab, wounds, complex nursing intervention, MS rehab, behavioral health), functional level (from OASIS) and a comorbidity adjustment (from the patient’s secondary diagnosis),” the rule states.
 
With HHGM, there would be “changes in the episode timing categories, the addition of an admission source category, the creation of six clinical groups used to categorize patients based on their 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 policies, partial episode payment adjustments and methodology to calculate outlier payments wouldn’t change, though they’d occur on a 30-day basis, CMS says.
 
CMS estimates the net impact of the HHGM would be a decrease of 4.3% in Medicare payments to agencies in 2019 if the model “is implemented in a fully non-budget neutral manner.”
 
The decrease in payments to agencies would be a decrease of 2.2% if the HHGM is “implemented in a partially budget-neutral manner” in 2019 “with the removal of the HHGM partial budget neutrality adjustment factor in CY 2020.”
 
Here’s why payments are down in 2018
 
CMS discussed in the rule why it projects an $80 million decrease in payments to agencies in 2018.
 
There will be a 0.5% reduction in payments “due to the sunset of the rural add-on provision,” a 1% home health payment update percentage and a 0.9% drop in payments to account for nominal case-mix growth, CMS says.
 
By comparison, the 2017 PPS final rule included a 0.7% payment reduction.
 
Other major changes in the rule
  • Value-based purchasing changes. For performance year three and subsequent years, CMS is seeking to remove from the set of applicable measures the OASIS-based measure drug education on all medications provided to patient/caregiver during all episodes of care.
  • Proposed quality measures. CMS proposes to adopt for 2020 payment determination three measures that meet IMPACT Act requirements. Those measures are: 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).
  • Removing OASIS items. CMS reviewed OASIS-C2 and plans to remove or modify 35 current OASIS items. Those changes would be made beginning Jan. 1, 2019. View a list of those changes at http://go.cms.gov/1Pbkv3Z.
Related link: View the proposed rule at http://bit.ly/2tWOxV4. Comment at www.regulations.gov. The comment period ends 5 p.m. EST Sept. 25.