Home Health & Hospice Week

Highest-paying clinical groups see utilization drops under PDGM, Medicare data shows.

Policy- and lawmakers are going to be making big decisions about home health reimbursement based on newly emerging Patient-Driven Groupings Model data — and some of that data is not flattering.

In the 2020 rulemaking cycle, the Centers for Medicare & Medicaid Services estimated that PDGM’s 30-day payment amount was about 16 percent higher than the average costs for a 30-day period of care, based on 2017 cost report data, CMS says in the proposed home health payment rule for 2022 published in the July 7 Federal Register.

In this rule, CMS uses updated cost report data from 2019 and concludes that “the CY 2020 national, standardized 30-day period payment rate was $1,864.03, which is approximately 34 percent more than the estimated CY 2020 30-day period cost of $1,394.68.”

An important change was in visits per period of care. CMS estimated 10.5 visits in its initial calculations. Now, “using actual CY 2020 claims data, the average number of visits in a 30-day period was 9.25 visits — a decrease of approximately 12 percent,” the rule says.

CMS also highlights statements from the Medicare Payment Advisory Commission’s latest annual report to Congress. “MedPAC noted that for more than a decade, payments under the HH PPS have significantly exceeded HHAs’ costs pri­marily due to two factors — agencies reducing visits to reduce episode costs and cost growth in recent years has been lower than the annual payment updates,” the rule notes.

Uh-oh: “I think the discussion of MedPAC continuing to believe the industry is overpaid is important,” stresses attorney Robert Markette Jr. with Hall Render.

Markette points to CMS comments in its discussion of how it calculates assumed versus actual behavior changes. “We are in year 2 of PDGM and CMS announces that a preliminary analysis of the ‘CY 2020 30-day base payment rate was approximately 6 percent higher than it should have been, and would require temporary retrospective adjustments for CY 2020 and subsequent years until a permanent prospective adjustment could be implemented in future rulemaking,’” he tells AAPC.

“The industry needs to be preparing and planning now for a rate reduction next year,” Markette warns.

CMS does acknowledge that COVID-19 has thrown a wrench into its cost estimation works. “We recognize that with the COVID-19 PHE, the 2019 data on the Medicare cost reports may not reflect the most recent changes such as increased telecommunications technology costs, increased personal protective equipment (PPE) costs, and hazard pay,” the rule says.

CMS may also find that per-period visit numbers rebound from initial COVID-era lows, experts note.

Take a look at more stats CMS included the proposed rule, which will inform possible reimbursement and other actions in the future:

• The number of 30-day periods has fallen from 9.3 million in 2018 to 8.2 million in 2020. (CMS uses simulated 30-day periods in pre-PDGM years by splitting 60-day episodes into two.)
• “While the number of 30-day periods of care decreased between CY 2018 and CY 2020, the average number of 30-day periods of care per unique HHA user is similar,” CMS takes pains to point out in the rule. However, that figure is still lower — 2.93 periods per user in 2020 versus 3.13 in 2018.
• The total number of home health visits per 30-day period of care fell from 9.86 in 2018 to 8.59 in 2020 — a decrease of 1.27 visits.
• The percentage of Low Utilization Payment Adjustment episodes is up sharply, from a simulated 6.7 percent in 2018 to 8.6 percent in 2020.
• The percentage of Community-Early and Institutional-Late periods of care fell, while the ratio of Community-Late and Institutional-Early periods rose. Community-Early periods decreased from 13.5 percent in 2018 to 12.5 percent in 2020; Institutional-Late periods fell from 6.8 percent to 5.8 percent in the same time period; Community-Late increased slightly from 61.6 percent to 61.9 percent; and Institutional-Early rose from 18.6 percent to 19.9 percent.
• Ratios of PDGM clinical groups saw movement from 2018 to 2020. Groups that dropped were Medication Management Teaching & Assessment - Endocrine (17.3 percent to 7.2 percent), MMTA - Other (4.7 percent to 3.1 percent), Neuro (14.4 percent to 10.5 percent), and Wound (14.5 percent to 14.2 percent). Wound and Neuro are the two highest case mix groups. Groups that increased were Behavioral Health (1.7 percent to 2.3 percent), Complex (2.6 percent to 3.5 percent), MMTA - Cardiac (16.5 percent to 19 percent), MMTA - GI/GU (2.2 percent to 4.7 percent), MMTA - Infectious (2.9 percent to 4.8 percent), MMTA - Respiratory (4.3 percent to 7.8 percent), MMTA - Surgical Aftercare (1.8 percent to 3.5 percent), and MS Rehab (17.1 percent to 19.4 percent).
• The percentage of therapy-only and no-therapy periods increased from 2018 to 2020, while the percentage of periods with a combination of therapy and other services fell from 48.2 percent to 42.2 percent.
• By location, HHAs that stand to benefit the most from the proposed 2022 changes are those in the South Atlantic region (Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia) at 2.5 percent, CMS estimates. Those with the smallest pay boost, aside from territories, are HHAs in the East South Central region (Alabama, Kentucky, Mississippi, Tennessee) at 1.0 percent.
• By size, HHAs that will benefit the most by 2022 changes are the smallest ones — providers with less than 100 30-day billing periods — at 1.9 percent, CMS judges. The largest providers — those with more than 1,000 periods — will gain slightly less at 1.7 percent. Agencies in between those are estimated to gain 1.5 percent next year, according to the rule.

Note: Links to the rule and other associated materials are online at www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center.