Home Health & Hospice Week

VBP will strip $3 billion from Medicare spending, CMS estimates.

If you’re located in one of the 41 non-Home Health Value-Based Purchasing states, you’ve got a steep learning curve ahead of you in the rest of 2021, because the program is rolling out nationwide starting Jan. 1.

In its home health payment proposed rule for 2022, the Centers for Medicare & Medicaid Services says the VBP expansion “would accelerate the shift from paying for Medicare home health services based on volume to a system that pays for value and quality,” according to its fact sheet on the rule.

“Homebound Medicare patients face a unique set of challenges and barriers to getting the care they need,” new CMS Administrator Chiquita Brooks-LaSure says in a release about the rule. “This proposed rule would streamline service delivery and value quality over quantity — at a time when Americans need it most.”

CMS lays out a number of specifics about the VBP expansion “to all Medicare-certified HHAs in the 50 States, territories, and District of Columbia.” They include that the first “performance” (i.e. data collection) year will be in 2022 and first VBP payment adjustments will hit in 2024 to the tune of plus or minus 5 percent. (See story, p. 187, for more VBP program details.)

On one hand: “With quality improvement and Medi-care cost savings, it was only a matter of time until VBP went nationwide,” says Michael Simione, a SimiTree Financial Consulting Director, in online analysis of the rule from Simione Healthcare Consultants.

The expansion was expected after CMS announced back in January that VBP was “certified for expansion through rulemaking beginning no sooner than Calendar Year (CY) 2022” (see HCW by AAPC, Vol. XXX, No. 2).

On the other hand: With the COVID-19 public health emergency still in effect, the Patient-Driven Groupings Model recently implemented, the Review Choice Demonstration relaunching, and more, industry experts thought HHAs might have a bit more time before CMS pulled the trigger on VBP, instead of a likely two months between finalization and implementation. “The national expansion of VBP was somewhat of a surprise in this year, but was anticipated to happen at some point,” notes consultant Angela Huff with BKD in Springfield, Missouri.

“It does seem rushed,” observes Joe Osentoski with Gateway Home Health Coding & Consulting in Madison Heights, Michigan. “To implement such a significant change given the … short time between final rule and implementation seems unwarranted,” Osentoski says.

“I suspected the Review Choice Demonstration would roll out before the VBP,” offers consultant J’non Griffin with Home Health Solutions in Carbon Hill, Alabama. “It will take some agencies that are not familiar with it off guard as most have not kept up with all the ‘rules’” which have gotten more complex as the model progressed, she says.

“I thought the new administration might want to wait and evaluate further,” notes attorney Robert Markette Jr. with Hall Render in Indianapolis. “However, VBP started as a pilot under the Obama administration. Given that many Obama-era personnel are returning, it is probably not that surprising to see an Obama-era pilot project rolled out nationally so quickly,” he judges.

“I guess the push towards making changes for possible cost savings was strong,” Osentoski tells AAPC.

And that savings is nothing to sneeze at. “The overall economic impact of the HHVBP Model for CYs 2022 through 2026 is an estimated $3.154 billion in total savings to FFS Medicare,” CMS says in the rule.

Good news: That $3 billion won’t come out of HHAs’ pockets. It’s due to a projected “reduction in unnecessary hospitalizations and SNF usage as a result of greater quality improvements in the HH industry,” CMS says.

CMS bases those savings estimates on the VBP model that has run in Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska, and Tennessee for four years. Medicare has saved $604 million over that time period, CMS said in its fourth annual report on the program issued earlier this summer (see HCW by AAPC, Vol. XXX, No. 21).

Take These Critical VBP Steps Right Away

VBP’s abrupt implementation mere months after finalization may not be ideal, but HHAs should prepare for it anyway — particularly those that are in non-VBP states or that haven’t prioritized the program so far. Five percent of reimbursement will be up for grabs, either positive or negative, right out of the gate.

Do this: “Start now with looking at your data from 2019 and see what areas can impact,” Huff advises.

“With 2022 being the start of the data collection for payment changes that won’t be assessed until 2024, agencies should jump on board now and take the lessons learned and success stories from other organizations that have been participating currently in HHVBP,” Huff continues. “The good news is that there have already been some paths forged here, so we aren't necessarily starting from scratch.”

The key is to waste no time. “Acting now … will be important to ensure success for organizations that will be new to HHVBP,” Huff emphasizes.

Agencies can take comfort in realizing that it’s not just reimbursement that’s at stake under the model. VBP “makes agencies ‘better’ and strive to have better outcomes,” Griffin praises.

“The upside here is opportunity to be rewarded for high-quality care,” Huff concludes. Plus, going nationwide should benefit “multi-state providers operating in states with and without VBP in place,” because they can “have the same type of approach across the country,” she says.

“Most people don’t like change,” Huff acknowledges. “But this is one that can be financially advantageous — but it must be managed.”

Note: See more about the VBP model in the rule and on the CMS HH VBP webpage at https://innovation.cms.gov/innovation-models/home-health-value-based-purchasing-model.