Home Health & Hospice Week

Watch for the VBP base year to possibly change.

While the one-year delay to Home Health Value-Based Purchasing is welcome, Medicare is sticking to its guns on other VBP provisions that home health agencies lobbied to change, including:

Cohorts. In the nine-state VBP model, HHAs were compared against agencies in their own state for VBP scores and financial rewards/punishments. In the proposed rule, CMS instead wanted to make two national cohorts — a very large group of larger-sized agencies and a relatively small group of smaller agencies.

Many commenters were against national cohorts, according to the proposed rule comment letters. “We are concerned about geographic variation, especially with the proposed weighting of the 60-day acute care hospitalization measure, which is worth at least 26.25 percent of the Total Performance Score (TPS),” said Joy Cameron, associate vice president of public policy with Humana, in her letter.

CMS did explore making state-based cohorts, it says in the final rule. But “applying the State, territory, and District of Columbia-level cohorts, we found that 11 of the 55 potential cohorts would have fewer than 20 HHAs based on the CY 2019 Home Health Star Ratings data,” CMS reveals. “We do not believe this would allow for a sufficient number of HHAs to develop prospective benchmarks and achievement thresholds.”

Commenters also “expressed concern that not using State-based cohorts will significantly shift home health payments across State lines, leading to shortages of necessary home health services in certain areas,” CMS reports in the final rule.

“We do not have evidence that suggests that moving to national small- and large-volume cohorts would significantly redistribute resources between states,” CMS maintains. “When the small- and large-volume HHAs in each of the States, territories, and the District of Columbia are combined, the average payment adjustment for the majority of States, territories, and the District of Columbia is within ±1 percent, with none exceeding ±2 percent,” the agency adds.

“Since Medicare is a national program, all beneficiaries should have the same expectations for high-quality care,” CMS concludes. “The use of national cohorts for purposes of the expanded Model would allow for competition among HHAs across similar measures while also providing sufficient numbers of HHAs in each cohort.”

Tip: CMS expects to issue cohort benchmarks and other data from the base year some time next summer, a CMS official revealed in the Open Door Forum.

“The national competition within the cohorts will certainly be an adjustment, especially for those agencies moving from the demonstration project to the national expansion, since that’s one of the aspects of the model that’s going to be different,” expects reimbursement expert M. Aaron Little with BKD in Springfield, Missouri.

Reimbursement at risk. The nine-state VBP model started out adjusting HHAs’ payment rates +/-3 percent, but the national expansion would up that to +/-5 percent. VBP programs for other provider types were only 1 percent (hospitals) or 2 percent (skilled nursing facilities) to start, in comparison, commenters noted.

CMS brushes off that suggestion without much justifi­cation. “We anticipate that most HHAs will receive a positive or negative payment adjustment smaller than the proposed 5 percent maximum adjustment,” the agency offers in the final rule. “We are finalizing the payment adjustment as proposed.”

Ending nine-state model early. In tandem with advocating for a year delay to VBP’s national rollout, many commenters asked for the fifth and final year of the VBP model to proceed — and for agencies that perform well to receive up to an 8 percent bonus to their 2022 rates based on 2020 data.

CMS rejects that widespread recommendation. “Because the COVID-19 PHE did not impact all HHAs equally, we continue to believe that implementing payment adjustments based on the impacted data could unfairly penalize certain HHAs,” the agency says in the final rule. “We are finalizing our proposal not to apply any payment adjustments for CY 2022 and to end the original Model early as proposed.”

Long-term viability. CMS confirms that it is “finalizing that the expanded Model would generally use benchmarks, achievement thresholds, and improvement thresholds based on CY 2019 data to assess achievement or improvement of HHA performance on applicable quality measures,” according to the rule.

Using that data may come with long-term problems, cautions attorney Robert Markette Jr. with Hall Render in Indianapolis. “It’s a zero-sum game,” Markette tells AAPC. The agencies that get 5 percent cuts on top of already-barely-covering-cost rates will soon be out of business, he predicts. Then determinations will be made between competitors that all score very close to one another. “Eventually, there will be no more savings to be had,” he predicts.

CMS acknowledges the program will change over time. While “the achievement score maintains the incentive to improve in the long-term … continuing to include the improvement score methodology is important in the initial years of the expanded model,” CMS explains. “This will allow HHAs with lower measure performance historically to be rewarded for improving upon those scores, even if the improvement does not move them into the highest performing tier of HHAs.”

What’s Going On With VBP Base Year?

Another area where commenters aren't getting what they want is with the VBP base year. “Due to the potentially de-stabilizing effects of the COVID-19 public health emergency (PHE) on quality measure data in CY 2020, we proposed that the baseline year would be CY 2019 (January 1, 2019 through December 31, 2019) for the CY 2022 performance year/ CY 2024 payment year and subsequent years,” CMS notes in the final rule. “The data from this baseline year would provide a basis from which each respective HHA’s performance would be measured for purposes of calculating achievement and improvement points under the expanded Model,” the rule explains.

Using a 2019 baseline year will mean comparing pre-COVID and post-COVID data, commenters criticized.

CMS dismisses that critique. “We believe the HHVBP Model can continue unchanged when HHA periods of care are paid according to the case-mix adjustments of the PDGM,” the rule maintains.

However: “We may conduct analyses of the impact of using various baseline periods and consider any changes for future rulemaking,” CMS allows in the final rule.

CMS is going to look at the baseline year “analytically” and make any potential changes in future rules, a CMS official confirmed in the Home Health Open Door Forum. But agencies shouldn’t automatically assume the 2019 baseline will be out, the speaker implied.