CMS Proposes $310M Home Health Payment Boost, National Expansion of HHVBP

The U.S. Centers for Medicare & Medicaid Services (CMS) on Monday proposed plans to expand the Home Health Value-Based Purchasing (HHVBP) model nationwide by the start of next year. The agency did so in its proposed payment rule for 2022.

In addition to the HHVBP expansion, CMS proposed to increase Medicare payments to home health agencies by 1.7% next year, which equates to a roughly $310 million bump. Last year’s proposed payment rule for 2021 included a 2.6% boost, with the final rule lowering that to 1.9%.

Apart from HHVBP and a standard rate increase, Monday’s proposed payment rule also tweaked the formal home health Conditions of Participation (CoPs) and offered insight into CMS’s plans for future Patient-Driven Groupings Model (PDGM) adjustments.

The CMS Innovation Center developed the HHVBP demonstration — one of the most successful alternative payment models ever — in an effort to create financial incentives for better quality of care. First implemented in 2016, the demo is currently active in nine randomly selected states.

“Homebound Medicare patients face a unique set of challenges and barriers to getting the care they need,” CMS Administrator Chiquita Brooks-LaSure said in a statement. “This proposed rule would streamline service delivery and value quality over quantity – at a time when Americans need it most.”

The CMS Innovation Center under the Trump administration previously revealed its intent to expand HHVBP at the beginning of 2021. Since put into action, HHVBP has resulted in an average 4.6% improvement in home health agencies’ quality scores as well as average annual savings of $141 million to Medicare, according to CMS

“[HHVBP] is a great example of how the Innovation Center can design successful models that both improve quality for Medicare beneficiaries and lower costs,” Brad Smith, the center’s former leader, said in January. “Over the past year, we have taken a data-driven approach to assessing all the Innovation Center’s models, and we are excited that HHVBP has met our gold standard for expansion as laid out by Congress.”

The first performance year of the expanded HHVBP Model would be CY 2022, with quality performance data from that year used to calculate payment adjustments under the expanded model in CY 2024, CMS explained.

The agency is also proposing to end the existing model a year early for current participants, meaning CMS would not use CY 2020 data to make payment adjustments for next year.

“CMS’ 387-page proposed rule is a combination of significant and minor changes in the home health payment model and [CoPs], along with the expected expansion of the HHVBP and establishment of enhanced survey and certification standards for hospices,” National Association for Home Care & Hospice (NAHC) President William A. Dombi said in a statement shared with Home Health Care News.

PDGM developments

In addition to expanding HHVBP and boosting the Medicare home health reimbursement rate, CMS said it will not take any actions to alter PDGM’s 4.36% behavioral adjustment — at least not yet.

“CMS is not proposing any specific method or behavior assumption payment adjustment in this proposed rule,” it clarified.

Instead, the published proposed rule included “preliminary analyses” of the first year of PDGM, including data on admission source, timing, clinical grouping, functional-impairment level and more. CMS likewise offered insight into how it analyzed differences between assumed and actual behavior changes.

The agency said it is “soliciting comments on the described method and other possible methods to determine the impact of behavior changes on estimated aggregate expenditures.”

The Bipartisan Budget Act of 2018 mandated that PDGM be budget neutral. However, spending on home health care during the 2020 implementation year was actually down by about 21.6% compared to projections, according to an August analysis from Dobson DaVanzo & Associates.

It isn’t surprising that CMS opted to punt on any major changes to PDGM.

In April, regulators highlighted how the Patient-Driven Payment Models implementation resulted in an unintended increase in payments to skilled nursing facilities (SNFs) of about 5%, or $1.7 billion, in FY 2020. Despite the unintended overpayment, CMS said it planned on delaying any corrections under the COVID-19 emergency was over and more reliable data was available.

Other updates

In its proposed rule, CMS also floated plans to create a Low-Utilization Payment Adjustment (LUPA) add-on for occupational therapists (OTs). Broadly, because OTs can now conduct assessments and certify for home health services, CMS is proposing an add-on factor to adjust for that first skilled OT visit in LUPA periods.

On top of that, the proposed rule would adjust the Home Health Quality Reporting Program, removing from it certain measures that increased burden on providers, according to the agency.

“For good measure, CMS has tweaked quality measures for home health and added home infusion therapy adjustments,” Dombi said.

While HHVBP expansion is significant and noteworthy, many of the details of the proposed rule are measured and subtle. That is most likely the case because of the public health emergency (PHE) and how it has disrupted the home health industry.

Among the specifics, the proposed rule would remove the OASIS-based “Drug Education of All Medications Provided to Patient/Caregiver During All Episodes of Care” measure. CMS is proposing to do so because measure performance is high enough among home health care agencies that meaningful distinctions between performances can no longer be made.

Furthermore, CMS is proposing to make permanent selected regulatory blanket waivers related to home health aide supervision and the use of telecommunication that were issued during the COVID-19 public health emergency.

“We believe the current 14-day on-site supervisory visit requirement when a patient is receiving skilled services is an important component to assessing the quality of care and services provided by the [home health] aide, and to ensure that aide services are meeting the patient’s needs,” CMS stated. “While we are proposing to allow this telecommunications flexibility, we expect that in most instances, [home health agencies] would plan to conduct the 14-day supervisory assessment during an on-site, in person visit, and that the HHA would use interactive telecommunications systems option only for unplanned occurrences that would otherwise interrupt scheduled in-person visits.”