Medicare Payment and Reimbursement

CY2019 Home Health Prospective Payment System Proposed Rule: HFMA Executive Summary

July 18, 2018 12:02 pm

HFMA Executive Summary

On July 2, 2018, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule updating the payment rates under the home health prospective payment system (HH PPS) for calendar year 2019 (CY2019), the 2020 case-mix adjustment methodology refinements, the Home Health Value-Based Purchasing (VBP) model, home health quality reporting requirements, and other items. For more information on the proposal, download a full summary of the rule. Comments on the proposed rule are due by August 31, 2018.

Payment rate increases
For home health agencies (HHAs) that submit quality data, the proposed update to the national standardized 60-day episode rate would be 2.1 percent, reflecting a market basket increase of 2.8 percent, reduced by a 0.7 percent multi-factor productivity (MFP) adjustment. The proposed update for HHAs that do not submit quality data would be 0.1 percent, reflecting a 2.0 percent reduction to the MFP adjusted market basket update. CMS would update the 2019 home health wage index using fiscal year 2015 hospital cost report data. 

Implementation of the Patient-Driven Groupings Model (PDGM) for 2020
For HH services beginning on or after January 1, 2020, CMS proposes to revise its case-mix methodology and payment categories by using its Patient-Driven Groupings Model (PDGM). In the PDGM, CMS would refine the comorbidity case-mix adjustments; all other variables remain as proposed in the 2018 HH PPS proposed rule. 

Home Health Value-Based Purchasing (HHVBP)
Two Outcome and Assessment Information Set based measures: Influenza Immunization Received for Current Flu Season and Pneumococcal Polysaccharide Vaccine Ever Received would be removed from the HHVBP measure set. Three other measures: Improvement in Ambulation-Locomotion, Improvement in Bed Transferring, and Improvement in Bathing would be removed, and the Total Normalized Composite Change in Self-Care, and Total Normalized Composite Change in Mobility measures would be added. CMS believes that the composite measures would create a more comprehensive assessment of HHA performance across a broader range of Activities of Daily Living outcomes.

Home Health Quality Reporting Program (HH QRP)
CMS proposes to update the policy for removing previously adopted measures from the HH QRP to align with other quality reporting programs. In keeping with the Meaningful Measures Initiative, beginning with the 2021 program, CMS would remove seven of the 31 currently adopted measures. Updates are provided regarding Improving Medicare Post-Acute Care Transformation Act measures, public display of HH QRP measures, and accounting for social risk factors in HH QRP measures. Also, the number of years of data used to calculate the Medicare Spending per Beneficiary measure would be increased from one to two years.

Medicare Coverage of Home Infusion Therapy Services
CMS proposes to add new regulations that address health and safety requirements for home infusion therapy suppliers, and provide a framework to approve home infusion therapy accreditation organizations. Requirements for such organizations, the process for CMS approval, and ongoing CMS oversight are also proposed. Information on temporary transitional payments for home infusion therapy services for 2019 and 2020, as mandated by section 50401 of the Balanced Budget Act of 2018, is provided. 

Impact
CMS estimates that the overall impact of the proposed rule will be an increase of $400 million (2.1 percent) in Medicare payments to HHAs in 2019. This overall total and percentage increase, however, does not take into account the items and services associated with furnishing transitional home infusion drugs. It also does not take into account the estimated reduction of $378 million in aggregate payments to HHAs over five years (2018 -2022) due to the reduction in unnecessary hospitalizations and SNF usage.

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