Home Health & Hospice Week

Industry needs Congress’ help.

While the Patient-Driven Groupings Model is supposed to be a budget-neutral reform to how Medicare pays home health agencies, in reality providers will see a big cut in transitioning to the new payment system, the 2019 Home Health Prospective Payment System final rule indicates.

When the Centers for Medicare & Medicaid Services proposed PDGM back in July, many providers were surprised to see a rate reduction incorporated into the change. CMS’s assertion that it would assume agencies would engage in clinical group upcoding, comorbidity diagnosis code upcoding, and Low Utilization Payment Adjustment gaming was “shocking” and “offensive,” attorney Robert Markette Jr. with Hall Render in Indianapolis said at the time (see Eli’s HCW, Vol. XXVII, No. 24-25).

Many of the more than 1,300 commenters on the proposed rule took CMS to task for making the preemptive adjustments, which it estimated would be 6.42 percent.

CMS summarizes many of the comments in the final rule it issued Oct. 31. For example, commenters said the assumptions:

• “appear to be randomly determined, inappropriate and that there is no evidence to support them”
• “lack any foundation in actual evidence based data and therefore penalize providers in an arbitrary and capricious fashion”
• “are ‘mere guesses’ and appear to be used solely to reduce home health payments”
• “appear to be overly complex and unsubstantiated” and
• “are illogical because the broad assumptions … basically construct a completely new payment system that is predicated on a presumption that HHAs will attempt to manipulate the system.” CMS dismisses those concerns, repeatedly noting that the Bipartisan Budget Act of 2018, which required budget neutrality for PDGM, demands the agency make behavioral assumptions.

Alternate viewpoint: The National Association for Home Care & Hospice disagrees with CMS on this point. “We think there is more flexibility than CMS is reading into the provision,” NAHC President William Dombi tells Eli.

Nevertheless, CMS finalizes that interpretation — apparently backed by its legal counsel, Dombi adds — and the behavioral adjustments in the final rule scheduled for publication in the Nov. 13 Federal Register. CMS doesn’t set a specific adjustment level yet, citing the need for updated data, but the last estimate was a 6.42 percent cut.

Even if BBA ’18 didn’t require the preemptive assumption cuts, CMS lays out a multitude of reasons why the reductions are reasonable and necessary, including:

• Past experience. Over the course of HH PPS, CMS has repeatedly found evidence of significant case-mix growth not due to real changes in patients’ conditions. For example, “between CY 2000 and 2010, total case-mix change was 23.90 percent, with 20.08 considered nominal case-mix growth,” CMS says.
• Other settings. Commenters pointed out that CMS isn’t using preemptive adjustments for Skilled Nursing Facilities in its transition to a revamped case-mix system in 2019. CMS responds that the SNF payment system adjustments aren’t required by law. And in the hospital setting, CMS did use similar adjustments when it transitioned from DRGs to MS–DRGs.
• Current practices. “In the current HH PPS, the assignment of points as part of the clinical level in the case-mix methodology is dependent upon the reporting of diagnoses,” CMS notes. “However, the points assigned are not generally dependent on whether the diagnosis is reported as the primary diagnosis or other diagnosis, except for a few exceptions. This means, that for most of the clinical point assignments, the ordering of the diagnosis does not matter as much as whether the diagnosis is present or not.” With the ordering of the codes making an impact under PDGM, you would naturally expect behavioral changes that are not gaming or upcoding, CMS says.
• OASIS limits. Likewise, OASIS has only six slots to record comorbidity codes, while home health claims have 24 slots for secondary codes. One would naturally expect to see more codes that qualify patients for comorbidity adjustments under PDGM, compared to the current information.
• LUPA patterns. When HH PPS began, “the episode file showed that approximately 16 percent of episodes would have received a LUPA,” CMS notes in the final rule. But “currently, only about 7 percent of all 60-day episodes receive a LUPA. In other words, it appears HHAs changed practice patterns such that more than half of 60-day episodes that would have been LUPAs upon implementation of the HH PPS are now non-LUPAs.” CMS expects the same pattern to occur with PDGM. “Current data for CY 2017 suggest that what would be about one-third of the LUPA episodes with visits near the LUPA threshold would move up to become non-LUPA episodes as we currently see clustering of episodes at and around the current LUPA threshold of 5 visits.”
• Gaming inevitability. CMS also dismisses commenter concerns that “it would be difficult to change their behavior in response to the PDGM. For example, these commenters referenced the LUPA thresholds that vary by case-mix group and stated that these are difficult to understand and that it would be extremely difficult for a front line care provider to know for a specific patient whether they were close to a LUPA threshold.” CMS responds that “the evidence supports a pattern of ‘practicing to the payment’. Specifically, there is ample evidence that there are notable behavior changes as they relate to payment thresholds.”

The data and facts are driving this provision, CMS insists. “We did not intend to imply that HHAs would engage in unethical behavior; therefore, these assumptions are not meant to be punitive,” CMS says in the final rule.

Bottom line: “We have provided sufficient detail for these behavioral assumptions as well as referenced past rules in which nominal case-mix change has been evaluated,” CMS maintains in the final rule. “The reconciliation process involving temporary and permanent adjustments required by law” — which requires CMS to see whether the assumptions occurred as estimated and adjust the next year’s rates — “should assure HHAs that any over or underestimate of the payment amount will be adjusted accordingly.”

Industry Revs Up For Prospective Adjustment Fight

HHAs aren’t ready to just accept the steep cut yet. “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,” Dombi says in a release about the rule.

“Actual changes should be the yardstick” by which behavioral adjustments are made, Dombi insists in a video about the rule posted to the trade group’s website.

Next step: Now is the time that Congress has to step in and help, Dombi says in the video. “There is bipartisan, bicameral legislation already pending before Congress that will permit Medicare to adjust rates only after there are actual changes in provider behaviors, not simply based on conjecture,” the release adds.

There is a “real chance” of securing legislative relief from the preemptive adjustment before the end of the year, Dombi believes. If that doesn’t pan out, HHAs will have all of next year to work on it before PDGM takes effect in January 2020.

Do this: HHAs and all of their staff should be contacting their entire congressional delegations about this matter, Dombi urges.