Home Health & Hospice Week

Retained behavioral adjustment provision ruins new model, trade group insists.

Medicare issued its Home Health Prospective Payment System final rule on Halloween, and it contains some provisions scarier than any monsters.

As expected, the Centers for Medicare & Medicaid Services adopted a final rule that is essentially the same as the proposed rule issued in July (see Eli’s HCW, Vol. XXVII, No. 24-25). That means it contains a Patient-Directed Groupings Model payment reform plan that will take effect in January 2020. PDGM will be budget-neutral and will:

• shorten home health episodes to 30 days;
• eliminate therapy from the HH PPS case mix system; and
• significantly revamp the case mix methodology.

CMS has increased the clinical grouping categories “by moving up to 12 with the additions of subgroupings,” points out finance expert Mark Sharp with BKD in Springfield, Missouri.

That doubles the number of categories, the National Association for Home Care & Hospice explains in a rule summary. “CMS agreed to add seven subgroups within the MMTA clinical group to improve payment accuracy,” NAHC notes.

And: “Therapy thresholds encourage volume over value and do not acknowledge that all patients are not the same, with some patients having complex needs that do not involve a lot of therapy,” CMS notes in a fact sheet about the rule. “The PDGM removes the current incentive to overprovide therapy, and instead, is designed to reflect CMS focus on relying more heavily on clinical characteristics and other patient information to allow payments to more closely reflect patients’ needs.”

The rule “focuses on patient needs and not on the volume of care,” CMS Administrator Seema Verma says in a release.

PDGM is expected to create groups of winners and losers, with it sometimes being difficult to determine which is which prospectively.

PDGM “is a modestly adjusted and warmed-over version of the highly criticized 2017 Home Health Groupings Model proposal, says NAHC President William Dombi. “Many of the same weaknesses present in HHGM exist in this new version.” Most observers probably won’t be surprised that “PDGM is moving forward with the core structure intact,” Sharp tells Eli.

Plus: While it’s good that PDGM will be budget neutral as required by law, it still contains “a significant ‘behavioral adjustment’ based solely on assumptions of behavioral changes that HHAs might undertake in the future,” Dombi blasts in a statement about the rule. “Rate reductions based on behavioral changes that have not yet occurred create significant dangers for home health patients.”

Dombi expresses frustration that “we addressed these same concerns with CMS through the rulemaking process only for our concerns to be rejected in toto.” He adds, “we have supported rational payment model reforms for many years. While the new model does include some good system refinements, its foundation is severely weakened by an unwarranted and unsupported rate reduction based on nothing but pure assumptions that home health agencies will abuse the payment process.”

Good news: CMS projects that Medicare payments to HHAs in 2019 will increase by 2.2 percent, or $420 million, according to the rule scheduled for publication in the Nov. 13 Federal Register. That’s slightly higher than the 2.1 percent cited in the July proposed rule.

The pay boost “is welcome,” Sharp notes. It’s “the best annual increase for home health agencies since 2007, I believe,” he adds. It comes after eight straight years of reimbursement rate cuts.

Other provisions in the final rule:

• eliminate the requirement that the certifying physician estimate how much longer skilled services are required when recertifying the need for continued home health care. “This policy is responsive to industry concerns about regulatory burden reduction and could reduce claims denials that solely result from an estimation missing from the recertification statement,” CMS says in the release. CMS estimates an annual cost savings to certifying physicians of $14.2 million beginning in CY 2019.
• revamp rural add-on amounts in accordance with the Balanced Budget Act of 2018, based on location. Ultimately CMS will phase out the add-on;
• make remote patient monitoring costs allowable in Medicare cost reports. This change is both surprising and “long overdue,” Sharp cheers;
• implement a temporary transitional payment system for home infusion therapy services in 2019 and 2020. A final system will take effect in 2021;
• change the criteria and procedures for removing previously adopted Home Health Quality Reporting measures; and
• tweak the HH Value-Based Purchasing system.

Note: For more rule details as well as expert insight and analysis, see the next issue of Eli’s Home Care Week. The 682-page rule is at https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-24145.pdf.