CMS proposes increase in home health payments for 2019, lays groundwork for implementation of value-based payment provisions

On July 2, 2018, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule that would increase payments to home health agencies (HHAs) by approximately 2.1 percent for calendar year 2019 and outlines the implementation of policy changes included in the Bipartisan Budget Act of 2018 (BBA) that are intended to hasten the movement to value-based payments in the home health sector.

July 13, 2018 | Health care

The proposed rule will be published in the Federal Register on July 12, 2018. Comments are due by August 31, 2018.

Highlights of key provisions of the proposed rule are summarized below.

Home Health Prospective Payment System (HH PPS) Unit of Payment

The proposed rule would shorten the standardized episode payment timeframe from 60 days to 30 days, and calls for a closer accounting of resource use. The proposed change would take effect for home health periods of care beginning on or after January 1, 2020.

CMS had proposed shortening the standardized episode timeframe for home health payments from 60 days to 30 days in the proposed rule for 2018, but the agency did not finalize the proposal after receiving strong pushback from stakeholders about potential payment reductions resulting from the policy change. Congress mandated the reduced episode timeframe in the BBA, but required CMS to implement the change in a budget-neutral manner.

Case-mix classification system

For the HH PPS case-mix adjustment, the proposed rule would end the use of “therapy thresholds,” which rely on the number of therapy visits provided, in favor of case-mix adjustments based on specific patient characteristics. The proposed change also would take effect for home health periods of care beginning on or after January 1, 2020.

Under the proposed rule, therapy thresholds for home health payments would be replaced by the Patient-Driven Group Model (PDGM). Taking patient information and the practices of home health practitioners into account, the PDGM would make adjustments based on a series of detailed payment categories such as diagnosis, functional level, comorbid conditions, and admissions source. By comparison, the current payment system bases case-mix payment adjustments on a measure of the volume of services provided.

As part of the PDGM model’s move towards more detailed information on services provided, CMS proposes a shift away from estimating costs during a home health episode via the Wage-Weighted Minutes of Care (WWMC), which uses industry-wide Bureau of Labor Statistics (BLS) data on home health providers. In its place, CMS proposes a Cost-Per-Minute plus Non-Routine Supplies (CPM + NRS) methodology derived from the Medicare Cost Report.

The proposed CPM + NRS method is expected to capture a wider variety of costs, and would focus on the specific costs for individual home health providers rather than industry-wide BLS data.

Although the BBA requires CMS to implement the payment changes in a budget neutral manner in the aggregate, individual home health providers could see payment increases or decreases as a result of the changes in payment policy. CMS projects that HHAs that provide more nursing visits (lower margins under the current payment system, which may incentivize overutilization of therapy) could see higher payments under the proposed changes. According to CMS, HHAs that provide more therapy visits relative to nursing visits could see payment decreases under the proposed changes.

Remote patient monitoring

CMS proposes to define remote patient monitoring in regulation for the Medicare home health benefit as “the collection of physiologic data (for example, ECG, blood pressure, glucose monitoring) digitally stored and/or transmitted by the patient and/or caregiver to the HHA.”

In addition, the proposed rule would allow the costs of remote monitoring to be reflected on the HHA Medicare cost report in an effort to hasten the adoption of remote patient monitoring technology by HHAs. Although the cost of remote patient monitoring is not separately billable under the HH PPS and could not be used as a substitute for in-person home health services, the proposed rule would allow home health agencies to use remote patient monitoring to support the care planning process.

Importantly, the regulatory definition builds upon CMS’ decision in the Medicare Part B Physician Fee Schedule Update for Calendar Year 2018 to permit separate payment to physicians and other health care providers for the “collection and interpretation of physiologic data digitally stored and/or transmitted by the patient and or caregiver to the physician or other qualified health care professional” under CPT code 99091.

New home infusion therapy services becoming available

Prior to full implementation of the new home infusion therapy benefit in 2021 as required by the 21st Century Cures Act, CMS proposes a temporary transitional payment for home infusion therapy. Home infusion therapy services include related professional services for administering drugs and biologicals through medical infusion pumps, providing training and education, and remote monitoring of the therapy. The proposed rule solicits public comment on elements of the home infusion therapy benefit to inform the structure of the permanent payment system.

The proposed rule also outlines approval and oversight standards for accreditation organizations for home infusion therapy providers.

The Home Health Value-Based Purchasing Model (HHVBP)

As the HHVBP prepares for its fourth year of operation, the proposed rule would refine the measures for the model’s quality and outcomes scoring system. The rule proposes to remove or modify several Outcome and Assessment Information System (OASIS)-based outcome measures and to replace them with two composite measures designed to capture the total change in a home health patient’s capacity for self-care and mobility.

My HealthEData

Consistent with provisions of other Medicare payment rules released in 2018, CMS includes a request for information (RFI) in the HH PPS proposed rule as part of an effort to collect feedback on the potential options to drive interoperability or the sharing of data between health care providers. Specifically, the RFI seeks comment on the possible revision of Medicare conditions of participation related to interoperability.

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

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Anne Phelps
Deloitte Risk and Financial Advisory

US Health Care Regulatory Leader
Deloitte & Touche LLP


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Deloitte Risk and Financial Advisory
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Ethan Joselow
Deloitte Risk and Financial Advisory

Deloitte & Touche LLP


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