Home Health & Hospice Week

Just who your agency is compared to can make or break your VBP payments.

The Value-Based Purchasing Demonstration may be fairly new, but Medicare officials are already making changes.

Many agencies in the nine VBP states are still in the dark on how the program is affecting them, because they haven’t yet received reports charting their progress against benchmarks required for payment, notes attorney Robert Markette Jr. with Hall Render in Indianapolis. Once payment determinations are made, HHAs in Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska, and Tennessee will be able to zero in on problem areas.

But in the meantime, the Centers for Medicare & Medicaid Services has proposed a bevy of revisions to the program in the HH Prospective Payment System proposed rule for 2017. Perhaps most significantly, CMS plans to change how it groups agencies for comparison.

Old way: Now, “the HHVBP Model compares a competing HHA’s performance on quality measures against the performance of other competing HHAs within the same state and size cohort. Within each of the nine selected states, each com peting HHA is grouped to either the smaller-volume cohort or the larger-volume cohort,” CMS explains in the rule released June 27. “When there are too few HHAs in the smaller-volume cohort in each state (such as when there are only one or two HHAs competing within a smaller-volume cohort in a given state) to compete in a fair manner, the HHAs [are] included in the larger-volume cohort for purposes of calculating the TPS and payment adjustment percentage without being measured on HHCAHPS.”

But then CMS found that “the benchmark values for the smaller-volume cohorts varied considerably more from state-to-state than the benchmark values for the larger-volume cohorts.” The agency is worried that “this high variation is not the result of expected differences like state regulatory policy, but is instead the result of (1) the cohort is so small that there are not enough HHAs in the cohort to calculate the values using the finalized methodology (mean of the top decile); or (2) the cohort is large enough to calculate the values using the finalized methodology, but there are not enough HHAs in the cohort to generate reliable values.”

New way: “We are concerned that if we separate HHAs into smaller- and larger-volume cohorts by state for purposes of calculating the benchmarks and achievement thresholds, HHAs in the smaller-volume cohorts could be required to meet performance standards that are greater than the level of performance that HHAs in the larger-volume cohorts would be required to achieve,” CMS says in the rule. “For this reason, we are proposing to calculate the benchmarks and achievement thresholds at the state level rather than at the smaller and larger-volume cohort level for all model years, beginning with CY 2016.”

Aim: “This change will eliminate the increased variation caused by having few HHAs in the cohort but still takes into account that there will be some inter-state variation in the values due to state regulatory differences,” CMS expects.

VBP Comparison Change Causes Concern

CMS says it has small providers’ interests in mind with this revision. But the Visiting Nurse Associations of America is concerned “this will make smaller providers who do not have a large number of beneficiaries compete with providers who have many beneficiaries to amortize each episode among the total number,” says VNAA VP Joy Cameron.

This change may have the opposite effect from what CMS intends and make benchmarks for smaller agencies higher, Markette worries. That could place smaller HHAs lower on “the curve.”

CMS is also proposing that “if a smallervolume cohort in a state has fewer than eight HHAs, those HHAs would be included in the larger-volume cohort for that state for purposes of calculating the LEF [Linear Exchange Function] and payment adjustment percentages,” according to the rule scheduled for publication in the July 5 Federal Register.

“What will it look like when you drop smaller cohort agencies into larger buckets?” Markette asks. Being compared to larger cohort agencies might “bump them down,” he worries.