Home Health & Hospice Week

About $150 million less will make it into HHAs’ coffers than proposed.

The scores of comments on the home health payment rule for 2021 fell mostly on deaf ears, the newly released final rule shows. The Centers for Medicare & Medicaid Services has changed almost nothing from the 2021 rule it proposed back in July, shows the final rule released Oct. 29.

What HHAs wanted: Home health agencies and their representatives urged CMS to eliminate the 4.36 percent behavioral adjustment cut it implemented in 2020, based on assumptions about how providers would react to PDGM (see HCW by AAPC, Vol. XXIX, No. 39).

What HHAs got: “As we stated in the CY 2021 HH PPS proposed rule, we believed it would be premature to propose any changes to the CY 2021 payment rate based on the data available at the time of CY 2021 rulemaking and in light of the ongoing COVID–19 PHE,” CMS says in the final rule published in the Nov. 4 Federal Register. “We will analyze data for CYs 2020 through 2026 … to annually determine the impact of the differences between assumed and actual behavior changes on estimated aggregate expenditures and, at a time and manner determined appropriate by the Secretary, make permanent and temporary adjustments to the 30-day payment amounts,” CMS says in the final rule.

Further, CMS has ratcheted down the inflation payment update for agencies, bringing the rate of increase for next year down from the proposed 2.6 percent to 1.9 percent. It still will be the biggest pay increase in over a decade — but just barely. CMS raised rates 1.3 percent last year, and made cuts in the previous eight years: 0.4 percent in 2018; 0.7 percent in 2017; 1.4 percent in 2016; 0.3 percent in 2015; 1.05 percent in 2014; 0.01 percent in 2013; 2.3 percent in 2012; and a whopping 5 percent in 2011. Before 2020, the last Medicare payment rate increase was 1.75 percent in 2010.

CMS calculates the 2021 increase with a 2.0 percent home health payment update percentage ($410 million increase) — down from 2.7 percent in the proposed rule — and a 0.1 percent decrease due to the rural add-on phase-out ($20 million decrease) — which is the same as proposed. Both the proposed and final update percentages include a 0.4 percent multifactor productivity (MFP) adjustment required by law.

The end result will be an additional $390 million in home health payments next year, compared to the proposed $540 million increase, CMS estimates.

The 30-day PDGM period base payment rate will be $1,901,12, the rule says. That compares to the proposed rate of $1,911.87, and will be up from $1,864.03 this year.

“CMS rejected pleas to roll back the 4.36 percent behavioral adjustment based on its position that it does not have the data yet to evaluate whether its budget neutrality obligation has been met in 2020,” notes the National Association for Home Care & Hospice in its rule analysis. “NAHC and others argued that the data to date clearly shows that the assumptions made by CMS in its establishment of the adjustment have not become reality.”

The 2021 final rule “knowingly includes a rate reduction that doesn’t match provider behavior,” blasts Joanne Cunningham of The Partnership for Quality Home Healthcare in a release. The lobbying group points to the study it funded from health economics consulting firm Dobson DaVanzo & Associates showing that HHAs are getting significantly underpaid under PDGM (see HCW by AAPC, Vol. XXIX, No. 33).

“Despite data demonstrating that actual provider behaviors under PDGM did not reflect Medicare’s theoretical assumptions, and lawmaker concerns, CMS failed to remove the -4.36 percent behavioral adjustment for CY 2021,” Cunningham says. “Continuation of the -4.36 percent adjustment is clearly not supported by the data, which shows that payments are not budget neutral as the law requires. We remain concerned that home health spending has been significantly lower than what Congress budgeted, which could impact negatively on the home health system,” she says.

“We are disappointed that CMS put off consideration of dropping the behavioral adjustment to payment rates based on its view that it needs a full year of data before it can act,” NAHC President William Dombi says in a message to members.

Note: Links to the final rule and associated files for case mix weights, LUPA thresholds, wage index, and rural add-on designations are at www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center.