For the first time in at least a decade, the proposed home health payment rule discusses increasing agencies’ payments.
 
The 2019 proposed PPS rule released July 2 includes a 2.1% increase to agencies’ payments next year — $400 million more in payments than in 2018. That’s a considerable shift for an industry used to suffering significant annual payment decreases.
 
In the 2016, 2017 and 2018 PPS final rules, the home health industry faced payment decreases ranging from $80 million to $260 million.
 
The 2019 proposed payment change reflects a 2.1% home health payment update percentage; a 0.1% increase due to decreasing the fixed-dollar-loss ratio in order to pay no more than 2.5% of total payments as outlier payments; and a 0.1% decrease in payments due to the new rural add-on policy mandated by the Bipartisan Budget Act of 2018.
 
The proposed rule doesn’t include rebasing or the case-mix creep that had led to payment decreases in recent years, notes Bill Dombi, president of the National Association of Home Care & Hospice (NAHC).
 
One result of payment changes outlined in the proposed PPS rule is a low-utilization payment adjustment (LUPA) rate of $146.41 per visit for skilled nursing in 2019 compared with $143.40 in 2018.
 
Agencies would receive $160.05 per physical therapy visit in 2019 compared with $156.76 in 2019. 
 
CMS calculates the 2019 national standardized 60-day episode payment at $3,151.22 compared with $3,039.64 in 2018.
 
Pacific states see the biggest increase
 
Agencies in all regions nationwide are slated to see their payments increase in 2019 under the proposed rule.
 
But agencies in the Pacific region would have the biggest increase, 2.7%.
 
The Pacific region includes Alaska, California, Hawaii, Oregon and Washington.
 
Agencies in the New England region would see the smallest increase, 1.4%. That region includes Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.
 
Providers in urban areas would receive a 2.2% payment increase, while providers in rural areas would receive a 2.0% payment increase.
 
How should you spend your money?
 
For many agencies, the proposed 2.1% payment increase is “not exactly like they’re getting a present in the mail,” Dombi says.
 
That’s because agencies face higher salaries, increased costs for rent and higher insurance costs, for example, he says.
 
But some providers will receive extra money in 2019 than they had in 2018.
 
Those agencies should consider saving that money to help if they have financial difficulties beginning in 2020 as a result of the Patient-Driven Groupings Model (PDGM), says attorney Robert Markette of Indianapolis-based Hall, Render, Killian, Heath & Lyman. 
 
Under PDGM beginning in 2020, CMS would stop using the number of therapy visits agencies provide to determine payment. For agencies that are heavy in their use of therapy, the payment increase they would receive in 2019 would be useful to help ride out the storm, Markette says.
 
Another thing agencies could do with the extra money in 2019 is to invest in what it takes to be successful in realms such as accountable care organizations and Medicare Advantage, Dombi adds.