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Home Health & Hospice Week

Value-Based Purchasing:

Drink In New VBP Data As You Wait For Final Rule Verdict

Published on Fri Oct 13, 2023

October IPRs will be out shortly, CMS official confirmed.

The day you’ll be paid based on your Value-Based Purchasing score is getting closer, so you’d better gather all the information available while you can.

Remember: The Centers for Medicare & Medicaid Services will adjust your Medicare reimbursement rate up to plus-or-minus 5 percent starting Jan. 1, 2025 based on the VBP claims and quality measure data you report this year.

Watch out: “In this era of low margins in home health care, these payment adjustments are certain to have a big effect on your annual financial results,” warns remote care technology vendor Health Recovery Solutions in online analysis.

HHVBP “will change the reimbursement landscape,” predicts mergers & acquisitions firm Mertz Taggart on its website. “While there’s not any more money coming in from Medicare, per se, worse-performing agencies will in essence pay for better-performing agencies’ adjustments,” the firm stresses.

CMS is gearing up to issue home health agencies’ second Interim Performance Reports (IPRs) later this month, HHVBP head Marcie O’Reilly reminded attendees in Medicare’s Oct. 11 Home Health Open Door Forum. The October IPRs will include 12 months of OASIS data ending June 30, 2023 and of claims data ending March 31, 2023, O’Reilly explained (see more details about the forthcoming reports in HHHW by AAPC, Vol. XXXII, No. 35).

Use Your Reports, CMS Urges HHAs

CMS continues to chide agencies for not being more proactive with their reports. “We encourage the many HHAs that did not access their July IPR to do so, and all HHAs to access each quarterly report including the upcoming October IPR,” O’Reilly emphasized in the Zoom meeting.

While CMS has “released various resources and training to help HHAs … many are still vastly underprepared,” warns consulting firm Richter LTPAC Performance Advisors. “Those who are tempted to maintain their status quo may have a harsh wakeup call when the 2025 payments begin rolling in — and by then it may be too late,” the company warns in its blog. “Agency leadership can avoid this unnecessary financial risk by creating a quality care plan for their organization now,” Richter recommends.

Providers that are not very familiar with VBP, and the IPRs in particular, can access CMS’ July webinar that provided an overview of the reports via links in the “Model Reports” section at the Expanded HHVBP webpage at www.cms.gov/priorities/innovation/innovation-models/expanded-home-health-value-based-purchasing-model, O’Reilly highlighted.

And HHAs can build on that knowledge with a new webinar CMS is planning, “Expanded HHVBP Model: Preparing for Calendar Year (CY) 2024 and CY 2025,” O’Reilly added. In the webinar scheduled for Nov. 9, “members of the HHVBP Model TA Team will review the CY 2024 Home Health Prospective Payment System (HH PPS) final rule as it applies specifically to the expanded HHVBP Model,” CMS explains in a message to providers.

While the new October IPRs will give agencies a fuller picture of their VBP performance, it won’t be the whole picture, CMS acknowledged in the forum. HHAs won’t get their final Total Performance Score, which determines their payment adjustment figure, until the August 2024 Annual Performance Report (APR), O’Reilly explained in the question-and-answer portion of the forum.

At the time agencies receive the APRs next August, “you’ll have an opportunity to review the data and ask questions, [and] request a recalculation if need be,” O’Reilly explained. “And then the final report will come out so that we meet the regulatory guideline that we tell you what your final percentage adjustment is 30 days before the performance year of 2025” — i.e., by Dec. 1.

Watch out: HHAs should write that initial August TPS in pencil, not ink. “If there are recalculation requests and we find that something does need to be recalculated, it could potentially affect everybody’s scores,” O’Reilly highlighted. “That’s why you don’t see the absolute final [TPS] until after the whole appeals process goes through,” she told the attendee. “But your first glimpse will be in August of 2024,” she concluded.

Specifically, the APRs will have three versions, notes Irina Gorovaya with Amity Healthcare Group in a presentation for the Accreditation Commission for Healthcare: preview, preliminary, and final.

Focus On Hospitalizations For Most Impact

Remember, the claims-based Hospitalization during the First 60 Days of Home Health Use (ACH) measure makes up more than one-quarter of the entire TPS score for the 2023 performance year, reminds HealthPro Heritage in analysis on its website. That figure goes up to more than 37 percent for agencies that don’t have enough CAHPS data to fulfill that portion of the TPS calculation.

“By a large margin, acute care hospitalization rates will have the biggest influence on your agency’s TPS,” Health Recovery Solutions emphasizes. “You should concentrate most of your efforts in this area by taking a coordinated team approach to patient care and ensuring that patients clearly understand their post-hospitalization instructions,” the company advises.

Keep in mind: Whether your TPS is good, bad, or indifferent, it applies only to Medicare fee-for-service claims, Gorovaya points out.

And those adjustments are still over a year away. But your VBP numbers may matter sooner than you think, especially if you’re thinking of selling, Mertz Taggart’s Cory Mertz warns. “What some owners don’t realize is that a 5 percent change in revenue will have a significant impact on cash flow, or EBITDA,” Mertz says. “Those dollars flow straight to the bottom line, in the absence of changes to the agency’s cost structure,” he explains.

As a result, “we expect home health acquirers will begin to price in the potential adjustments to their target acquisitions much sooner, perhaps as early as late-2023,” the firm predicts.

Stay tuned: CMS will issue its next HHVBP newsletter on Oct. 27, O’Reilly also told agencies in the forum. And the home health 2024 final payment rule, expected around Nov. 1, will address proposed changes such as moving the model’s baseline year again, to 2023 this time, and swapping out VBP quality measures (see more details of the proposals in HHHW by AAPC, Vol. XXXII, No. 36).

In the proposed rule, “CMS considered leaving the baseline at CY 2022 but rejected it because it used ‘less recent data,’ and they felt it made it harder for agencies to track,” note attorneys Robert Markette Jr., Lauren Hulls, and Erin Deckard with law firm Hall Render in Indianapolis. “This raises the possibility that the ‘baseline year’ will move forward in future rulemakings, which undercuts the idea of a baseline,” Markette, Hulls, and Deckard point out.

“Agencies should carefully consider how the shifting baseline will impact their HHVBP improvement scoring,” they add in online analysis.

Note: Register for CMS’ Nov. 9 VBP webinar online at https://us06web.zoom.us/webinar/register/WN_Ftrf_BwHQ56Oox75ofIJ2Q#/registration.

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