Medicare Compliance & Reimbursement

Study is a step in the right direction, experts say.

The Centers for Medicare & Medicaid Services (CMS) is getting serious about implementing the pay for performance criterion for home health agencies (HHAs) soon, after toying with the idea for decades. 

CMS is considering implementing a P4P program, now known as Value-Based Purchasing (VBP), in January 2016, the agency reveals in the 2015 home health prospective payment system proposed rule issued July 1. “If implemented, the model would begin at the outset of CY 2016, and include an array of measures that can capture the multiple dimensions of care that [home health agencies] furnish,” CMS says in the rule published in the July 7 Federal Register.

“It’s about time,” says finance expert Mark Sharp with BKD in Springfield, Mo. “How long have they been talking about P4P or value-based purchasing? [The Affordable Care Act] requires they study moving towards it. I think it is good to know they will be starting programs to assess.”

This is a “first and good step in right direction,” agrees Tom Boyd with Simione Healthcare Consultants in Rohnert Park, Calif.

How it would work: CMS is light on the details, but it throws out a general framework, which resembles the P4P demo that ran in 2008 and 2009 in many ways. “As currently envisioned, the HHA VBP model would reduce or increase Medicare payments, in a 5-8 percent range, depending on the degree of quality performance in various measures to be selected,” according to the rule. “The model would apply to all HHAs in each of the projected five to eight states selected to participate in the model. The distribution of payments would be based on quality performance, as measured by both achievement and improvement across multiple quality measures. Some HHAs would receive higher payments than standard fee-for-service payments and some HHAs would receive lower payments, similar to the [hospital] VBP program.”

But beware that implementing VBP will be a long process, Boyd says. And agencies are likely to encounter bumps along the way that make the VBP ride less than smooth, particularly in the five to eight states that first participate in the model, he fears.

Watch out: HHAs should be most worried about the big chunk of their reimbursement that will be at stake under the program, warns Pat Laff with Laff Associates in Hilton Head Island, S.C. As CMS points out in the rule, hospital VBP ties only 1.25 percent of hospital payments to VBP this year (that will increase to 2 percent by 2017). In contrast, CMS wants to make up to 8 percent of HHAs’ reimbursement dependent on their outcomes under VBP.

“Building upon the successes of other related programs, we are seeking to implement a model with greater upside benefit and downside risk to motivate HHAs to make the substantive investments necessary to improve the quality of care furnished by HHAs,” CMS says.

Bottom line: “Those HHAs that fail to meet the performance standard would receive lower payments than what would have been reimbursed under the traditional FFS Medicare payment system, and would therefore see a net payment decrease to Medicare payments as a result of this model,” CMS says. And remember, you can’t choose whether to participate. Participation would be mandatory for all agencies in the selected states.

Get to Work on Your Outcomes Now

The amount of reimbursement you would put at risk under the 5 to 8 percent VBP pool dwarfs the payment changes in this rule, Laff points out. HHAs that are currently under the state and national outcomes benchmarks are at highest risk for losing that chunk of payment.

CMS doesn’t propose specific outcomes measures for use in the model, but you can bet rehospitalization and emergent care standards will be at the top of the list, Laff tells Eli. “Everybody better get on their toes,” Laff exhorts. 

That means examining your outcomes and identifying opportunities to improve them. In order to achieve better outcomes, HHAs will need to drill down to data on the clinician and supervisor level, Laff advises. “To fix problems, you have to know who’s pulling you down,” he explains.

Do this: Don’t delay in starting work to improve your outcomes data, Laff counsels — before 5 to 8 percent of your reimbursement depends on it. “This is not something that is just going to happen overnight,” he says. For most providers, it will require systemic change that will take time.

Comment opportunity: CMS seems to be putting out feelers on the VBP program as much as furnishing information in this rule, notes physical therapist Cindy Krafft with Kornetti & Krafft Healthcare Solutions in Citrus Springs, Fla. Take advantage of the chance to give substantive feedback on what you think of the VBP concept and what you’d like to see in the program, she encourages.

See the proposed rule and submit comments at https://www.federalregister.gov/articles/2014/07/07/2014-15736/medicare-and-medicaid-programs-cy-2015-home-health-prospective-payment-system-rate-update-home.