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Perspectives

CMS finalizes Patient-Driven Groupings Model for CY2019

New home health payment system encourages value over volume

The final rule increases payments, and allows for greater use of non-telehealth home patient monitoring. It also finalizes a shorter unit of payment for home health agencies, among other changes.

October 31, 2018 | Health care

CMS finalizes higher Home Health Rates for 2019, lays groundwork for greater use of remote patient monitoring

The final rule increases payments, and allows for greater use of non-telehealth home patient monitoring. It also finalizes a shorter unit of payment for home health agencies, among other changes.

On October 31, 2018, the Centers for Medicare and Medicaid Services (CMS) released a final rule that increases payments to Home Health Agencies (HHAs) by 2.2 percent for calendar year 2019 and finalizes the implementation of policies that are intended to expand the use of remote patient monitoring by home health agencies and hasten the movement to value-based payments in the home health sector.

The final rule will be published in the Federal Register on November 13, 2018.

Highlights of key provisions of the rule are summarized below.

Home health prospective payment system (HH PPS) Unit of payment

The final rule shortens 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 rule ends 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 change takes effect for home health periods of care beginning on or after January 1, 2020.

Under the final rule, therapy thresholds for home health payments are replaced by the Patient-Driven Group Model (PDGM). Taking patient information and the practices of home health practitioners into account, the PDGM will 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 finalized 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 will use a Cost-Per-Minute plus Non-Routine Supplies (CPM + NRS) methodology derived from the Medicare Cost Report.

The CPM + NRS method is expected to capture a wider variety of costs, and focuses 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 rule changes.

As part of the implementation of the new case mix system, CMS is making available agency-level impact projections and an interactive Grouper Tool that will allow HHAs to determine case-mix weights for their patient populations.

Remote patient monitoring

CMS defines 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.”

The final rule allows 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 final rule allows home health agencies to use remote patient monitoring to support the care planning process. To that end, if remote patient monitoring is used to augment the care planning process, the costs of the equipment, set-up, and service related to this system are allowable as administrative costs.

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 is implementing 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 final rule outlines approval and oversight standards for accreditation organizations for home infusion therapy providers, and includes a requirement that all home infusion therapy suppliers must provide home infusion therapy services in accordance with nationally recognized standards of practice, and in accordance with all applicable state and federal laws and regulations.

The home health value-based purchasing model (HHVBP)

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

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Anne Phelps
Principal

Deloitte Risk and Financial Advisory
US Health Care Regulatory leader
Deloitte & Touche LLP
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Daniel Esquibel
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Deloitte Risk and Financial Advisory
Deloitte & Touche LLP

 

Ethan Joselow
Manager

Deloitte Risk and Financial Advisory
Deloitte & Touche LLP

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