Medicare proposed changes would cut home health reimbursement

Home health agencies could see decreases of $80 million in 2017 and $950 million in 2019.

Home health providers object to the Centers for Medicare and Medicaid Services’ proposed rule that would reduce Medicare payments by 0.4 percent, or $80 million, in 2018, and up to  $950 million in 2019.

The Partnership for Quality Home Healthcare is especially concerned about a groupings model proposal starting in 2019 that  would change the unit of payment from 60-day episodes of care to 30-day periods of care and places patients in payment groups based on how they fit in six clinical categories.

“CMS is proposing a major reform to home health reimbursement without having worked collaboratively with industry partners like the Partnership and we expect to be included in payment reform development going forward,” said Partnership Chairman Keith Myers. “We question whether CMS has the unilateral authority to make such a proposed change without action by Congress.”

CMS said the six clinical groups used to categorize 30-day periods of care are based on the patient’s primary reason for home healthcare.

The new model could result in a $950 million Medicare payment cuts for home health providers in 2019 if it is implemented in a non-budget neutral manner, according to Home Health Care News. If implemented in a partially-budget-neutral manner, it could reduce payments by $480 million, the report said.

CMS is not proposing a revision to the split percentage payment approach in the change to a 30-day period. However, the agency said it is proposing to phase-out of the split percentage payment approach in the future and is soliciting feedback now.

For 2018, Medicare payments to home health agencies would be reduced by 0.4 percent, or $80 million, based on the proposed policies, CMS projects.

The $80 million decrease reflects the effects of a $190 million increase from a 1 percent home health payment update, a $170 million decrease from a -0.97 percent adjustment to the 60-day episode payment rate to account for nominal case-mix growth, and a $100 million decrease due to the sunset of the rural add-on provision.

The Medicare Access and CHIP Reauthorization Act, or MACRA extended until Jan. 1, 2018 the rural add-on, which increased by 3 percent the payment amount otherwise made for home health services in a rural area.

Additionally, the proposed rule for 2018 refines the home health value-based purchasing model. It revises the applicable measure for receiving performance scores for any of the home health consumer assessment of healthcare providers and systems, or HHCAHPS.

The Partnership for Quality Home Health Care said it plans to release an analysis of the proposed payment model and its impacts on home health delivery.

The coalition is concerned that Affordable Care Act directives for high-risk beneficiaries to receive access to home health services would result in disproportionate cuts to provide the care if the payments are implemented as drafted.

Tuesday’s home health rule is among several proposals that reflect a broader strategy by CMS to relieve regulatory burdens for providers, support the patient-doctor relationship in healthcare and promote transparency, flexibility, and innovation in the delivery of care, CMS said.

“CMS is committed to helping patients and their doctors make better decisions about their healthcare choices,” said CMS Administrator Seema Verma. “We’re redesigning the payment system to be more responsive to patients’ needs and to improve outcomes. The new payment system aims to encourage innovation and collaboration and to incentivize home health providers to meet or exceed industry quality standards.”

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