Home Health & Hospice Week

Therapy utilization cut on deck for payment.

A topic that has been a minor, rather vague provision in the last two home health payment update rules may be about to come into sharp focus for home health agencies: payment reform.

Background: In the 2016 and 2017 home health prospective payment system rules, the Centers for Medicare & Medicaid Services outlined research for HHA costs involved with “providing ongoing access to care to low-income Medicare beneficiaries or beneficiaries in medically underserved areas and in treating beneficiaries with high levels of severity of illness,” CMS notes in the 2017 proposed rule. The research was required by the Affordable Care Act.

According to CMS contractor Abt Associates’ presentation during CMS’s Aug. 23 Home Health Open Door Forum, research shows the current PPS produces lower margins for patients who:

• need parenteral nutrition;
• have traumatic wounds or ulcers;
• require substantial assistance in bathing;
• begin home health following an acute or post-acute stay;
• have a high Hierarchical Condition Category score;
• have certain poorly controlled clinical conditions; and
• are dual eligible.

In addition to conducting the study and submitting a report on the findings to Congress, the ACA also told CMS it could “analyze methods to potentially revise the home health prospective payment system,” the proposed rule explains.

Now it looks as though CMS may be kicking the payment reform process into gear. In the 2016 final rule, CMS outlined three approaches to payment reform. In the 2017 proposed rule, it narrows the reform ideas to just one model with refinements.

And after spending only two of the 76 pages in the 2017 proposed rule on the topic, the agency had Abt give a relatively lengthy presentation on the approach it settled on, the Home Health Groupings Model, in the Aug. 23 forum.

Watch for: In both the proposed rule and the forum, CMS noted that it will be issuing a technical report on the HHGM model later this year. “Once the Technical Report is released, we will post a link … to receive comments and feedback on the model,” the rule says.

Along with the technical report, CMS will release “a list of the ICD-9-CM and ICD-10-CM codes assigned to each of the clinical groups within the HHGM to further assist the industry in analysing the HHGM model,” it adds.

CMS Extolls Virtues Of New Model

CMS isn’t ready to completely throw out the current payment structure. “In many ways, the structure of the HHGM is similar to the current payment system,” the rule notes. “However, by either adding to or removing certain components of the current payment system, the HHGM could help to strengthen the HH PPS by addressing the margin differences.”

But the HHGM system would have some major differences (see story, p. 247). That includes omitting therapy utilization from the calculation altogether. That change would remove “unintended financial incentives,” CMS notes in the rule.

Therapy utilization seemed a particular target in the change. In the Abt presentation, the staffer noted that the Medicare Payment Advisory Commission has repeatedly criticized the current PPS for its use of therapy thresholds.

Bottom line: “Margin differences would be addressed by moving to a HHGM approach where those characteristics are better accounted for in the model,” CMS maintains in the rule.

Work In Progress

While momentum on home health payment reform appears to be picking up steam, CMS has not issued any sort of timeline beyond the technical report’s issuance later this year.

William Dombi, vice president for law with the National Association for Home Care & Hospice, hopes that means “CMS views it as something to work on further rather than implement,” he says. “The new module is lacking in detail. What is particularly missing is how it works to eliminate or minimize the impact of therapy volume in the payment amount determination.”

Given those deficiencies, “at this point, the model seems far from ready for prime time,” Dombi tells Eli.

Note: See the discussion of HHGM in the proposed rule on pp. 43744-43746 at www.gpo.gov/ fdsys/pkg/FR-2016-07-05/pdf/2016-15448.pdf. The slides from Abt’s HHGM presentation are at http://abtassociates.com/AbtAssociates/files/e8/e81bd5e3-b676-40d0-b286-590fc0daaa09.pdf.