Home Health & Hospice Week

Expect the cuts to keep on coming in the future.

Home care providers are having a hard time deciding whether Medicare gave them a trick or a treat with the Halloween release of the 2020 home health payment rule.

Treat: The Centers for Medicare & Medicaid Services scales back the reduction for anticipated behaviors under the Patient-Driven Groupings Model by nearly half, to 4.36 percent. That compares to the 8.01 percent cut proposed back in July.

CMS arrives at the 4.36 percent figure by applying its behavioral assumptions to only half of the 30-day episodes it expects in 2020, the agency explains in the final rule scheduled for publication in the Nov. 8 Federal Register.

The new figure seems to be “a concession to the backlash from the home health industry,” judges Julianne Haydel with Haydel Consulting Services and The Coders in Baton Rouge, Louisiana.

Scores of home health agencies criticized the preemptive cuts — many with marked intensity — in the more than 550 comment letters on the proposed rule (see Eli’s HCW, Vol. XXVIII, No. 34).

While providers would have liked to see the cut go away altogether in 2020, HHAs can consider the adjustment reduction a “minimal win,” says Joe Osentoski with Quality in Real Time in Sterling Heights, Michigan. Due to CMS’s “well-established history of assigning behavioral assumptions to home health payment,” the cut was unlikely to go away altogether, Osentoski adds.

Scaling back the cut by nearly half was “a huge relief,” cheers Melinda Gaboury with Healthcare Provider Solutions in Nashville.

Securing a reduction to the cut, let alone one of this magnitude, is a surprise, believes attorney Robert Markette Jr. with Hall Render in Indianapolis. The pressure exerted by the industry, including from lawmakers on HHAs’ behalf, seems to have “gotten CMS to blink,” Markette tells Eli.

While CMS didn’t drop the preemptive cut altogether, at least downsizing the cut will “make the damage a little bit less,” Markette says.

The National Association for Home Care & Hospice “is greatly heartened by CMS’s modifi­cation,” NAHC President William Dombi says in a release. With the reduced rate, “CMS has given the home health community a chance to safely transition to the dramatically new payment model.”

Trick: While the industry appreciates the more reasonable adjustment level, “it is annoying that it is still that high,” Gaboury tells Eli.

CMS shouldn’t be making anticipatory cuts based on assumptions at all and should instead wait and see if HHAs’ behaviors actually change to increase reimbursement, many providers argued in their comment letters on the 2020 proposed rule.

“Assumption-based rate calculation should not occur because of the high risks of error and the creation of an incentive to change behavior solely to maintain Medicare revenues,” Dombi maintains. “Instead, NAHC supports adjustments only after actual behavioral changes have occurred.”

While “the revised assumptions are a definite improvement over the proposed ones … the behavioral adjustment remains a concern, albeit to a reduced level,” Dombi continues.

Ahead: NAHC is “evaluating all of the options with respect to further advocacy” on this issue, Dombi tells Eli. A short timeframe to get legislation passed before the payment system takes effect is a barrier to success, however.

If the adjustment moves forward as finalized in the rule, vulnerable agencies that also must grapple with the drastic reduction in Request for Anticipated Payments could go under.

RAP changes and the behavioral adjustment “pile on the burden for smaller and mid-size agencies to stay solvent,” Osentoski warns. Added to other PDGM burdens such as therapy utilization changes and diagnosis coding needs, “this could provide the tipping point for agencies with limited resources to weather the initial choppy waters of PPS to PDGM reimbursement,” he says.

Watch For More Cuts Ahead

Don’t expect the 4.36 percent reduction to be the last adjustment you’ll see for behavioral changes under PDGM.

“If CMS underestimates the reductions to the 30-day payment amount necessary to offset behavior changes and maintain budget neutrality, larger adjustments to the 30-day payment amount would be required in the future, by law, to ensure budget neutrality,” the agency warns in the rule.

CMS throttles back its cut for 2020 based on timeline rather than the assumed behavior changes’ reasonableness. “We continue to believe that the behavior assumptions are valid ones and supported by evidence” CMS has cited in previous rules, the rule insists. “However, given the scale of the payment system changes, we agree that it might take HHAs more time before they fully implement the behavior assumed by CMS.”

The rule cites another instance where that’s happened — its acute care hospital inpatient PPS rulemaking cycle for 2008. In that case, CMS estimated that a 4.8 percent adjustment was required, but only a 2.5 percent change actually occurred in the first year, according to the new rule. The second year, however, saw a 5.4 percent change.

NAHC praises CMS’s move to reduce this year’s adjustment to “reflect a much more realistic view that any behavior changes in coding or service utilization would not occur instantaneously and in full starting January 1, 2020.”

But you should prepare for future rate cuts based on behavioral changes, experts urge. “The concern remains that CMS can rely on assumptions for future adjustments,” Dombi says.

In the final rule, CMS actually increases its behavior change projection a bit, predicting that clinical group coding changes (based on diagnosis coding) will cause a 6.4 percent increase in payment, adding visits to avoid a Low Utilization Payment Adjustment will cause a 1.88 percent increase in payments, and comorbidity coding will cause a 0.25 percent increase, to total 8.389 percent. That’s up from the 8.01 percent in the proposed rule.

“The forceful argument on the adjustment followed by the significant reduction may indicate that the original draft of the final rule was modified late in the process,” Dombi theorizes. NAHC was thinking there might be a phase-in rather than a significant cut in the first year.

Time will tell whether CMS’s behavior predictions actually pan out. For example, it seems the LUPA gaming may be overstated since thresholds will not be uniform, but will instead vary between two and six visits depending on the case mix category, Markette points out.

On the other hand: Case mix weight may increase more than CMS expects in the functional domain, Haydel cautions. “The functional domain will comprise 20 percent of payment” under PDGM, she explains. “While most of the questions affected payment in the past, it was usually much less than that.”

HHAs often scored M0 questions incorrectly in the past, Haydel believes. Now with an increased reimbursement focus on the items, HHAs will educate their assessment staff on how to complete them correctly, increasing their accuracy — and payment for the patient.

The change won’t occur “because anyone is cheating,” Haydel maintains. It will be because the questions were often under-scored in the past due to confusion.

CMS: Coding Changes Are Positive,

In fact, CMS addresses the widespread reaction to the proposed rule, with providers accusing the agency of pointing the finger at HHAs as gamers and cheats.

“By including behavior change assumptions in the proposed calculation of the 30-day payment amount, as required by statute, we did not intend to imply that HHAs would engage in unethical behavior,” CMS maintains in the final rule. It’s merely that “system-wide case-mix levels have risen over time throughout the country, while patient characteristics data indicate little real change in patient severity over that same time.”

Further, “behavior assumption adjustment is not meant to be punitive, rather we are required by law to make such assumptions,” CMS stresses. The assumptions aren’t required by law for other settings, such as for skilled nursing facilities, CMS adds.

Specifically related to diagnosis coding, CMS argues that “modification of current coding practices does not mean that HHAs are engaging in inappropriate behavior nor are the coding assumptions meant to encourage any type of negative behavior change,” as many commenters charged. “ICD-10-CM diagnosis codes are granular and specific, and provide HHAs a better opportunity to report those codes that reflect the patient’s conditions and support the need for home health services. We view improved diagnosis reporting as a positive change that affords HHAs the latitude to fully ‘paint the picture’ of their patients.”

But that “better opportunity” CMS cites is going to come with behavioral adjustment reductions to rates.

Note: The 511-page final rule is at https://s3.amazonaws.com/public-inspection.federal­register.gov/2019-24026.pdf.