Home Health & Hospice Week

After a punishing pandemic and often rocky start to the Patient-Driven Groupings Model, many home health agencies have been hoping for some relief on the payment cut for PDGM behavioral adjustments. But those rules were dashed by the newly released home health payment proposed rule for 2022.

Recap: When formulating PDGM, the Centers for Medicare & Medicaid Services included a payment cut based on expected behavior changes. The so-called behavioral adjustment reached as high as 8 percent at one point, although in its final reckoning CMS reduced it to 4.36 percent (see HCW by AAPC, Vol. XXVIII, No. 39-40). CMS expected home health agencies to upcode diagnoses and add visits to avoid Low Utilization Payment Adjustment episodes, it said.

Then an August 2020 study by health economics consulting firm Dobson DaVanzo & Associates found that in the first four months of 2020, home health agencies were paid up to 22 percent less than they were under the old prospective payment system, showing that the behavioral adjustment was significantly overstated (see HCW by AAPC, Vol. XXIX, No. 33). Influential lawmakers such as Sen. Susan Collins (R-Maine) wrote to CMS last fall, urging the agency to eliminate the behavioral assumption cut.

In its 2021 rule, CMS declined to do so. But it was a bare bones regulation that made very few changes while COVID-19 still ravaged America’s health care system. Providers and their representatives hoped for a better outcome in the 2022 rulemaking cycle.

Instead, CMS has issued an assessment in the proposed rule that “the CY 2020 30-day base payment rate was approximately 6 percent higher than it should have been” and “our preliminary analysis shows an additional payment decrease would more appropriately account for behaviors reflected in CY 2020, after the implementation of the PDGM and 30-day unit of payment” (see story, p. 188).

The Partnership for Quality Home Healthcare is concerned CMS’s new rule “continues to impose a flawed 4.36 percent payment cut on Medicare’s home health benefit,” the home health lobbying group says in a release. “Given Medicare’s own data about home health provider behavior, it is troubling that the agency continued the unjustified behavioral assumption cut for 2022,” PQHH’s Joanne Cunningham says.

“I was disappointed to see the behavioral adjustment stayed in the rule,” says consultant J’non Griffin, owner of Home Health Solutions in Carbon Hill, Alabama.

“Many of us hoped that CMS would address the behavioral assumptions they made that have not panned out,” says consultant Angela Huff with BKD in Springfield, Missouri. “But it is not a surprise that CMS did not do so,” based on its actions in the skilled nursing facility payment space, Huff says. With SNFs’ Patient-Driven Payment Model, CMS “took the same approach of holding the line on making any adjustments,” she notes.

“CMS states they want an entire year of data, but many of us in the industry feel like there are some adjustments that would make sense now based on the data we have so far,” Huff maintains.

Instead, CMS appears to be “punting for now” on this issue, observes attorney Robert Markette Jr. with Hall Render in Indianapolis.

On one hand: “The expected behavioral adjustments made were not seen in reality,” points out Joe Osentoski with Gateway Home Health Coding & Consulting in Madison Heights, Michigan. That would support removing the adjustment.

On the other hand: “2020 was not a good year to develop data for refinement due to the multiple external factors pushing at home health service: the [COVID-19] Public Health Emergency and changes to care patterns from COVID chief among them,” Osentoski notes. That would support waiting on any adjustment actions.

“The statute requires [CMS] to make the assessment and take action, but they are right to be skittish about that,” Markette judges. “The pandemic really impacted numbers and I think CMS is trying to avoid reaching conclusions from data when they can’t be sure the pandemic was not the final cause of the shifts.”

Despite the gray area, many providers and their representatives stand by the request to appeal the behavioral adjustment cut.

“PQHH strongly urges CMS to eliminate the behavioral adjustment for home health payment rates for CY 2022 and reconcile any unsupported payment cuts for CYs 2020 and 2021,” Cunningham says in the release.

Another wrinkle is that COVID may have permanently altered practice patterns, Markette offers. “Many agencies will have a different utilization pattern post-pandemic. The pandemic forced a lot of changes and there is no reason to now go back to pre-pandemic operations,” he says. “The question I have is whether they can ever get past this.”