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Value-Based Purchasing:

6 Things Likely To Surprise You About Value-Based Purchasing

Published on Fri Apr 22, 2022

Tip: Your non-Medicare data counts too.

Unless you’re ready to give up 5 percent of your Medicare pay based on data you’ll start producing this coming January, you’d better get up to speed on the Expanded Home Health Value-Based Purchasing Model.

The Centers for Medicare & Medicaid Services originally proposed to collect quality data for VBP payment adjustment purposes nationwide starting in January 2022. But the agency listened to home health agencies’ calls to take it slow and pushed the first performance year back to January 2023.

Timeline: As finalized in the 2022 home health final rule, HHA quality data from the 2023 calendar year, which will be the first “performance year,” will affect agencies’ payment rates in 2025, the first “payment year” of the model, CMS officials explained in an “HHVBP Model Expansion 101” webinar in February. Then every year, the performance and payment years will roll forward, so that data from 2024 affects 2026 rates, data from 2025 affects 2027 rates, and so on.

That means that data you collect and submit in less than nine months can push your Medicare payment rate up or down by as much as 5 percent in 2025.

Whether you have operated under the original VBP model in one of nine pilot states for years, or are encountering the new payment structure for the first time, there are some things that might surprise you about the system. Read on to discover the details.

Surprise No. 1: The nationwide expansion of HH VBP has already begun. “Calendar year 2022 is a pre-implementation year, allowing home health agencies time to learn about the Model without risk to payments,” explained Marcie O’Reilly, CMS’s acting program coordinator for the expanded HH VBP model, in the webinar. “CMS will not apply a payment adjustment to HHAs for their performance in calendar year 2022,” O’Reilly clarified.

“During 2022, CMS will provide education and support to competing home health agencies, allowing time to prepare for implementation of the expanded model,” O’Reilly told attendees. “Home health agencies can use this time to assess their own performance,” she recommended.

“We are four months into the pre-implementation year,” O’Reilly later stressed in the April 20 Home Health Open Door Forum.

Surprise No. 2: Non-Medicare data contributes to your VBP ranking and ultimate payment adjustments under the model. “The HHVBP Model includes different payers based on the measure category,” explained Linda Krulish with CMS contractor OASIS Answers Inc. “Calculation of the OASIS-based measures includes OASIS assessment data from Medicare fee-for-service, Medicare Advantage, Medicaid fee-for-service, and Medicaid managed care patients,” Krulish said in the webinar. And “the HHCAHPS measure includes data from Medicare fee-for-service, Medicare Advantage, Medicaid fee-for-service, and Medicaid managed care patients,” she said.

In contrast, calculation of the claims-based measures might be more in line with many agencies’ expectations, since it “only includes data from Medicare fee-for-service patients,” Krulish noted. (See the measures and their categories in chart, p. 109).

But remember: “While the data from some of the measures comes from patients with all Medicare and Medicaid payers, an agency’s HHVBP payment adjustment will only be applied to Medicare Home Health PPS claims,” Krulish detailed.

Surprise No. 3: You may know that the baseline year for the VBP model is 2019, because CMS thought 2020 data would be too skewed by the COVID-19 public health emergency to prove reliable. But you may not realize baseline years for individual HHAs can vary — and even for individual measures within one agency.

“The model baseline year is used to determine the benchmarks and the achievement thresholds for each cohort and each measure,” Krulish explained. On the other hand, “the HHA baseline year is used to determine HHA improvement thresholds by measure for each individual agency.”

CMS will use 2019 as the baseline year for individual HHAs and their improvement thresholds as long as they were certified before Jan. 1, 2019. If the agencies were certified between Jan. 1, 2019 and Dec. 31, 2020, their baseline year will be 2021. After that, the HHA baseline year will be the HHA’s first full calendar year of services beginning after the date of Medicare certification, CMS explains.

In other words: If you were certified some time in CY 2021, your base year will be 2022; if you are certified some time in CY 2022, your base year will be 2023, and so forth.

Another quirk that affects the baseline year is the amount of data available. “An agency needs to have sufficient data to establish a baseline year for each particular measure,” Krulish emphasized.

The minimum threshold of data per reporting period is 20 quality episodes for measures in the OASIS-based category, 20 stays for measures in the claims-based category, and 40 completed surveys for measures in the CAHPS category, explained Elaine Gardner, also with OASIS Answers, in the webinar.

“So there could be instances where an agency’s quality measures each have a different baseline year for improvement thresholds,” if the amount of data varies for them by year, Krulish elaborated.

Surprise No. 4: Risk adjustment. A number of HHAs asked the webinar presenters about risk adjustment in the question-and-answer portion of the session. “All 12 measures in the measure set are adjusted to account for differences in patient characteristics across agencies,” Krulish responded.

CMS goes into more detail about risk adjustment for the two claims-based measures regarding hospitalization and emergency department use in its recently updated VBP frequently asked questions set. “To account for beneficiary characteristics that may affect the risk of [acute care hospitalization] or ED use, the risk adjustment model uses potential risk factors that fall into five categories,” FAQ 3007 explains. Those categories are prior care setting; health status; demographics; enrollment status; and interactions terms.

“This risk adjustment effort is really important when assessing healthcare service quality,” Krulish said. “More detail about the quality measures, including … more about risk adjustment, will continue to become available during this pre-implementation year,” she said.

Surprise No. 5: Public reporting of your quality data won’t be limited to Care Compare when VBP gets rolling.

“Public reporting of home health agency performance data will begin with calendar year 2023 performance year, calendar year 2025 payment year,” said Judith Ouellet with CMS contractor University of Colorado Anschutz Medical Campus. “Data will be available to the public on the CMS website on or after Dec. 1, 2024,” Ouellet told webinar attendees.

“The home health agency-level data includes applicable measure results and improvement thresholds, total performance score, TPS percentile ranking, and payment adjustment percentage for a given year,” Ouellet elaborated. “And the agency-level information is for agencies that qualify for payment adjustments based on the performance year,” she added.

CMS addresses the topic at more length in its VBP FAQs. “Publicly reporting performance data under the expanded HHVBP Model will enhance the current home health public reporting processes, as it will better inform beneficiaries when choosing an HHA, while also incentivizing HHAs to improve performance,” CMS maintains in FAQ 1011. Skilled nursing facilities and hospitals already report their VBP data under their respective VBP models, the agency adds.

Don’t look for the data on Care Compare. “CMS will separately publicly report applicable measure results for the expanded HHVBP Model, because the public reporting periods for the HHVBP Model differ from those used for the HH QRP public reporting on Care Compare,” the FAQ says. And “the expanded HHVBP Model’s performance data would be supplemental to the Home Health Quality of Patient Care and Patient Survey Star Ratings and does not form a part of these or other star ratings.”

Surprise No. 6: HHAs that operated under the original VBP model in Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska, and/or Tennessee shouldn’t expect the expanded model to look exactly like it.

For example: “The weight of each measure is different, since new measures that were part of the original HHVBP model are not included in the expanded HHVBP model,” Krulish said in the webinar. “For the expanded HHVBP Model, the measure categories are weighted as 35 percent for the OASIS-based measures, 35 percent for the claims-based measures, and 30 percent for the HHCAHPS measures,” she listed. “That accounts for 100 percent of the total performance score.”

Note: A link to the webinar, FAQs, and more VBP materials are on the expanded model webpage at https://innovation.cms.gov/innovation-models/expanded-home-health-value-based-purchasing-model.

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