Home Health & Hospice Week

Stay on CMS's case every step of the way.

If you thought your biggest priorities this year would be CoPs and audits, think again. Helping shape - and preparing for - the now-required reform of the Home Health Prospective Payment System should top your priority list in 2018, experts say.

Why? On Feb. 9, Congress passed and President Trump signed the Bipartisan Budget Act of 2018. In addition to funding the government through March 23, the Act makes a two-year budget agreement increasing federal spending by about $300 billion, notes law firm Baker Donelson in analysis of the legislation.

For home care providers, the legislation is a "mixed bag," judges the National Association for Home Care & Hospice. Read on for the pros and cons of the agreement.

Payment Reform Is Definitely Happening

Despite industry lobbying for better terms, most of the home health provisions from the original House-passed version of the budget agreement stayed in the final bill that was enacted Feb. 9. "It has been a wild and very impactful week for home care and hospice," NAHC said upon the law's passage. "Many changes will be occurring in the coming years in our industry as a result of the federal budget."

Based on the budget legislation, "Congress still hates home health," laments attorney Robert Markette Jr. with Hall Render in Indianapolis. "They give us back the rural add-on, but the price appears to be HHGM. Seems a little one-sided."

Reminder: After the Centers for Medicare & Medicaid Services pulled back the Home Health Groupings Model in the 2018 HH PPS final rule, legislators incorporated two of the reform plan's biggest changes into the budget bill - switching to 30-day episodes and eliminating therapy utilization from the PPS methodology (see Eli's HCW, Vol. XXXVII, No. 7).

Many HHA commenters on the rule opposed the switch to a 30-day payment period, citing problems ranging from payment-data collection mismatches to poor patient outcomes.

And scores of home health therapists wrote in to criticize the therapy elimination from case mix calculations. Therapy keeps patients at home and out of ERs and hospitals, saving Medicare money, they stressed.

Nevertheless, Congress implemented both changes in the law and set a 2020 implementation date for reform.

Big difference: In contrast to the HHGM proposal in the 2018 rule, at least the Budget Act requires payment reform to be budget neutral. CMS estimated its proposal would have stripped nearly $1 billion from home health spending in HHGM's first year alone.

Mandating budget neutrality "will, in theory, reduce the impact of reform," Markette tells Eli. The industry's biggest criticism of HHGM as proposed "was the massive cuts that resulted from it not being budget neutral." While the neutrality requirement "may provide some relief, payment reform will still move to a 30-day episode and eliminate therapy payments," Markette points out.

Requiring reform at all, and those specific elements, is "bad news," judges nonprofit aging services association LeadingAge.

Don't Count On Last-Minute Reprieve

To minimize the negative effects of any reform, home care providers must be ready to step up, Markette insists. "The statute requires CMS to work with technical experts and it appears the industry will have the opportunity to provide feedback," he says. "It will be extremely important for the industry to be vigilant, review any reports or other information from CMS, and provide continual feedback."

Warning: "We cannot afford to get to the 11th hour again and then hope to get CMS to change direction," Markette stresses. "We need to be providing input from the beginning about how these changes will impact patient care."

One example: "The original HHGM model incentivized care to postacute, nursing patients immediately after discharge" and "reduced payments to longer term chronic patients," Markette explains. "Unfortunately, there are a lot of chronic long term home health patients, as more and more people strive to stay home and not go into facilities. The industry needs to be providing data to CMS to show how any changes will impact patient access to care and, in turn, issues such as ER utilization, re-hospitalization, and even increasing institutionalization."

Using statistics to illustrate payment reform's impact "is important, because as CMS strives to reduce home health spending, we need to make them aware that they will likely end up spending more on other forms of care," Markette says. "They just don't see the connections."

Timeline: Some industry veterans expect to see the payment reform proposal in the 2019 HH PPS proposed rule expected in July 2018, or maybe even the next year's 2020 proposed rule in July 2019. But the law gives CMS until Dec. 31, 2019, to "pursue notice and comment rulemaking on a casemix system with respect to the prospective payment system for home health services."

Regardless of the official notice's date, industry members must be active in engaging with CMS on the model before it hits that stage, Markette urges.

How Does Add-On Restoration Affect You?

The presumed trade-off for payment reform, restoration of the rural add-on, may not necessarily help you even if you operate in a rural area.

Details: The law reduces the add-on to 1.5 percent in 2019 and 0.5 percent in 2020 for agencies "in the highest quartile of all counties ... based on the number of Medicare home health episodes furnished per 100 individuals." But in areas with "a population density of 6 individuals or fewer per square mile," the add-on will be 4 percent in 2019, 3 percent in 2020, 2 percent in 2021 and 1 percent in 2022. All agencies not fitting in those two categories will see an add-on of 3 percent in 2019, 2 percent in 2020, and 1 percent in 2021.

The HHS Office for Inspector General will generate a report on "whether such payments should continue to be made based on county data" as well.

"Even though the government is taking a more targeted approach to how they pay the add-on payments to rural home health agencies, Leading-Age is pleased the home health rural add-on will continue," the association says.