This afternoon, CMS released the final rule updating payments for Home Health Agencies (HHAs) for 2017. The rule estimates that payments to HHAs in 2017 will be reduced by 0.7 percent, or roughly $130 million. CMS sees this rule as part of their broader efforts to provide payment based on value, rather than merely quantity of services provided.

Lower Payments Overall, but a Separate Payment for Wound Therapy

Home health agencies receive a national, standard 60-day episode payment for each eligible patient for which they provide care, which can include nursing, home health aide, physical therapy, speech-language pathology, occupational therapy, medical social services, and medical supplies. This payment is adjusted for case-mix and area wage differences. The 2017 payment reflects the final year of a four-year phase-in of a new, lower 60-day payment amount, which is largely but not entirely offset by an annual inflation adjustment.

In addition, in 2017 HHAs will receive a separate payment for the use of a disposable negative pressure wound therapy device supplied after January 1, equal to the amount that would be paid under the Medicare Hospital Outpatient Prospective Payment System. The rule also makes changes to the outlier payment methodology, shifting from a per-visit to a per-unit (15 minute) approach in order to more closely align with outlier payments under other payment schedules.

CMS Continues to Refine Home Health Value-Based Purchasing Program (HHVBP)

In 2016, CMS initiated a Home Health Value-Based Purchasing Program (HHVBP) for all Medicare beneficiaries in Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee, and Washington. Home health agencies in those states will have their payment adjustments determined based on their performance score relative to the performance of other agencies in their state. The first payment adjustments under the program will be implemented in 2018. The agency is finalizing the following refinements to the program in 2017:

• Calculate benchmarks and achievement thresholds at the state level, rather than a regional (or “size cohort”) level;
• Require a minimum of eight home health agencies in a “size cohort”;
• Give home health agencies an additional 7 days to report quality measure data at the end of a reporting period;
• Remove four measures from the measure set (Care Management: Types and Sources of Assistance; Prior Functioning ADL/IADL; Influenza Vaccine Data Collection Period; and Reason Pneumococcal Vaccine Not Received);
• Adjust reporting period for the Influenza Vaccination Coverage for Personnel from quarterly to annually;
• Implement recalculation and reconsideration processes.

CMS Updates Home Health Quality Reporting Measures and OASIS Data; Failure to Submit OASIS Data Results in 2% Reduction in Payments

In a continued effort to increase transparency and to measure quality, CMS implements sections of the Improving Medicare Post-Acute Care Transformation Act of 2014 (the IMPACT Act) in this rule. The IMPACT Act requires the public reporting of data on HHAs, Skilled Nursing Facilities (SNFs), Inpatient Rehabilitation Facilities (IRFs), and Long-Term Care Hospitals (LTCHs) quality measures and data on resource use and other measures.

• CMS adopted four measures to meet the requirements of the IMPACT Act:
  • Potentially Preventable 30-Day Post-Discharge Readmission Measure for Post-Acute Care Home Health Quality Reporting Program (from Medicare Claims);
  • Total Medicare Spending per Beneficiary – Post Acute Care Home Health Quality Reporting Program (MSPB-PAC HH QRP) (does not require additional data submission);
  • Discharge to Community- Post Acute Care Home Health Quality Reporting Program(from Medicare Claims); and
  • Drug Regimen Review Conducted with Follow-Up for Identified Issues-Post-Acute Care Home Health Quality Reporting Program (from Medicare Claims).
• As they have done with other measures, CMS also finalized removing six process measures from the HH QRP, beginning with the CY 2018 payment determination, because they are “topped out” and therefore no longer have sufficient variability to distinguish between providers in public reporting.
• The Home Health Conditions of Participations (CoPs) require Homes Health Agencies (HHAs) to submit OASIS assessments for quality measurement purposes; submission of OASIS data is also required as a condition of payment. HHAs that do not submit quality measure data to CMS will see a 2.0 percent reduction in their annual payment update (APU).

Applied Policy works with healthcare providers regardless of setting to help them navigate changes in payment systems so that they can focus on providing the best care to their patients. If we can help you manage these changes or any other challenges, contact us at gpugh@appliedpolicy.com or 202-558-5272.