Drastic Payment Cuts Would be Rare in New Model, CMS Says

Home health providers received clarifications about a proposed new payment policy, including information about how reimbursements might be cut or boosted, during a call with Medicare officials Wednesday.

The home health value based purchasing (HHVBP) model first was put forward in a proposed rule issued this week by the Centers for Medicare & Medicaid Services (CMS). It would tie payments to 29 quality measures for all home health agencies (HHAs) in nine states.

CMS already has randomly selected these states from nine pre-configured geographic groupings, an agency official confirmed during the Open Door Forum call Wednesday. They are Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska and Tennessee.

However, the participating states still could change based on feedback that CMS receives during the comment period on the proposal, the official emphasized.

Under the proposal, HHAs in the selected states that perform very poorly on the quality measures could have their reimbursements slashed by up to 5% in 2016, with that escalating to 8% by the time the model ends in 2022. High performers could have their payments increased by those percentages.

Some industry leaders decried this aspect of the proposal, saying that other types of providers do not face that level of risk in similar models.

However, very few HHAs will actually see their reimbursements cut or supplemented by the full 5%, according to officials on the call. The “average HHA” could expect to see a payment adjustment of plus or minus 1% in the model’s first year, based on modeling scenarios, they said.

Providers can refer to Table 25 (see below) in the proposed rule for some idea of how quality will be tied to payment, they explained. The table shows what the payment adjustment would be for the lowest quality and highest quality providers.

For example, a provider scoring in the lowest 20th percentile during the model’s 5% payment adjustment period could expect a downward adjustment of 2.04%. An agency scoring in the highest 80th percentile would receive a 3.08% bump.

The HHVBP model was put forward in a proposed rule that, if enacted, also would result in a $350 million Medicare payment cut to home health providers in 2016. Provider groups have spoken out against the cut, saying that it would force some agencies—especially smaller organizations and those in rural areas—to shut their doors.

Source: Centers for Medicare & Medicaid Services

Source: Centers for Medicare & Medicaid Services

Written by Tim Mullaney