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Trick or Treat? CMS Releases Final Rule for Home Health CY2020

October 31, 2019 – As expected, CMS finalized the significant payment model change for Home Health services starting in 2020. The Patient-Driven Groupings Model (PDGM) will start with any new patient episodes on or after 01/01/2020.

HealthPRO® Heritage Sorted Through the Mixed Bag and Found More Treats than Tricks
CMS essentially maintained the reform model it previously had outlined in the proposed rule, and what was required by the Bipartisan Budget Act of 2018 to start in 2020. However, likely the best news of the release, was the reduction of the controversial behavioral adjustment from 8.01% to 4.36%. In the final rule, CMS wrote “Based on the comments received and reconsideration as to frequency of the assumed behaviors during the first year of the transition to a new unit of payment and case-mix adjustment methodology, we are finalizing a -4.36% behavior change assumptions adjustment in order to calculate the 30-day payment rate in a budget-neutral manner for CY 2020.” This reduction does help soften the worry that most agencies were facing concerning their profit and loss margins. However, it will still be imperative that agency clinicians accurately code and capture correct information on the OASIS to assure appropriate reimbursement and then also mitigate LUPA risks by providing appropriate visits based on that information.

The National Association of Home Care & Hospice (NAHC), whom HealthPRO® Heritage partnered with to survey the industry on the proposed rule earlier this year, released a statement in which President William A. Dombi stated, “NAHC is greatly heartened by CMS’s modification,” but went on to state NAHC continues to believe “that assumption-based rate calculation should not occur because of the high risk of errors” and the need for any model change to stay budget neutral. NAHC, as does HealthPRO® Heritage, continues to urge home health supporters to contact their legislators to support the bipartisan bills currently proposed in both the House and the Senate (S 2573 & HR 2573) that can help resolve the ongoing concerns over the negative behavioral adjustments to home health reimbursement.

Other highlights from the final rule on Thursday include:

  • Finalized the plan to reduce & eventually phase out the Requests for Anticipated Payments (RAPs) that agencies currently depend on for partial pre-payment of episodic costs.
    • In 2020, CMS will reduce RAPs from the current 60% pre-payment for early episodes and 50% on late episodes to only 20% for all existing home health agencies (HHAs).
    • In 2021, all RAPs will be eliminated.
    • RAPs must still be submitted by all HHAs through 2021 however, until a new “Notice of Admission” is initiated in 2022 requiring reporting of all admissions electronically within 5 days of service to avoid penalty.
    • Companies are beginning to realize that outsourcing their therapy will be an advantage as it allows them more time to gain critically needed cash flow instead of focusing on weekly payrolls.
  • The foundational elements that make up PDGM remain unchanged from the proposed rule.
    • Change to 30-day payment periods vs. 60-day. Certification episodes remain 60 days though with all OASIS timing points staying the same.
    • 432 specific case mixes possible given 5 payment factors:
      1. Source (Institutional or Community)
      2. Timing (Early or Late)
      3. Clinical Grouping (12 unique groupings based on the primary diagnosis on the claim)
      4. Functional Impairment Level (Low, Medium, or High)
      5. Comorbidity Adjustment (None, Low, or High)
    • Elimination of Therapy Thresholds. Therapy remains critical however, with CMS stating in the final rule “we do not expect HHAs to under-supply care or services, reduce the number of visits in response to payment, or inappropriately discharge a patient receiving Medicare home health services as these would be violations of the CoPs and could also subject HHAs to program integrity measures.” CMS is stating that the ongoing continuation of therapy is critical as we march forward into providing more outcomes, quality, and value based treatments in the future.
    • 30-day Low Utilization Payment Adjustments (LUPAs) ranging from 2-6 depending on the specific case mix category.
    • Increase in Medicare payments by an estimated $250 million. 1.3% increase compared to 2019 with a budget neutral 30-day unit base rate of $1,864.03 which is a significant 4% increase from the proposed rule rate of $1,791.93.
    • Allows use of therapist assistants to perform maintenance therapy vs. only allowing therapists. HealthPRO® Heritage is excited about this change as maintenance therapy is greatly underutilized in current home health care planning. (Look for a future blog on success with properly delivering this benefit to Medicare beneficiaries!)
    • Provides a permanent home infusion therapy benefit to be implemented in 2021.
    • Other specifics, as outlined in our proposed rule blog, were upheld in the final rule including:
      • Adopting Standardized Patient Assessment Data Elements (SPADEs);
      • Enhancing the public reporting of Total Performance Scores (TPS) & TPS Percentile Ranking for the Value-Based Purchasing Model (HHVBP); and
      • Reducing plan of care (POC) requirements leaving the Conditions of Participation (COPs) as what enforces anything POC related.

HealthPRO® Heritage at Home continues our focus to not only provide quality therapy services to home health agency patients, but also deliver resources, education, and support to home health agencies preparing for PDGM. Check out our ever-growing PDGM and Therapy Resource Page here! Our experts are here to help you Prepare, Execute & Succeed!

Click here for the full CY 2020 Home Health Final Rule as well as only CMS HH resources.

Tags: Home Health, Final Rule, PDGM, Patient-Driven Grouping Model