New Medicare Payment Model Looms Over Home Health Providers

Home health agencies should be prepared for a major unwelcome surprise that could hit in the near future—a comprehensive, complex overhaul of the Medicare payment system.

When the Centers for Medicare & Medicaid Services (CMS) proposes its 2018 payment rates, likely within the next several weeks, the agency could also seek to establish a new payment methodology known as the Home Health Groupings Model.

The potential for this to happen is the most significant threat looming over the home health industry at the moment, according to April Anthony, CEO both of Encompass, one of the largest providers nationally, and Homecare Homebase, a technology platform widely utilized across the industry. The companies are based in Dallas.


“I say that skeptically, because frankly we don’t have enough information to quantify the threat, but from the limited information we have, I think it is a substantive threat to many providers,” she said Thursday at the Homecare Homebase Users Conference in Dallas.

What started as a CMS effort to evaluate home health payments specifically for certain subpopulations morphed into the HHGM. The payment framework first was detailed in a technical report that came out in December 2016. 

Under HHGM, the current 60-day episode of care is replaced with a 30-day episode, and patients are placed in a payment group based on where they fit within five categories, detailed in the graphic below.


Providers are concerned about several provisions in the HHGM, which they believe could increase costs and burdens. However, the greatest concern may be that the provider community has not been able to fully evaluate the potential effects of the new framework due to its enormous complexity.

“It makes the Affordable Care Act look simple, in terms of data,” attorney Nancy Taylor said at the Homecare Homebase conference. Co-chair of the health care and FDA practice in Greenberg Traurig’s Washington, D.C., office, Taylor serves as a key advocate for the Partnership for Quality Home Healthcare.

Because of this enormous complexity, independent data analytics experts have not been able to completely evaluate how providers or beneficiaries might be effected should HHGM be implemented, Taylor said. Given this, it would “not be fair” for CMS to move forward, but it still is possible that HHGM could be included in the upcoming payment rule—and in a worst-case scenario, HHGM could even have a January 1, 2018 implementation date, she warned.

Reasons for optimism

Another major home health provider, Baton Rouge, Louisiana-based Amedisys (Nasdaq: AMED), does not think it is likely that HHGM will be included in the 2018 payment rule.

“Based on our observations of the proposed rules issued by CMS in other post-acute sectors where no major reforms have been proposed, our sense is that HHGM will not be part of the 2018 proposed rule, but we will have to wait and see,” Amedisys COO Chris Gerard said.

Even if HHGM is incorporated in the forthcoming payment update, there will be a 60-day comment period before CMS finalizes the rule. 

There needs be good legal and policy analysis to see if legislative changes are necessary to implement the HHGM proposals, Taylor said in her remarks.

However, providers need to be ready to spring into action and advocate against HHGM, speakers at the conference agreed.

Doing so could be successful in swaying CMS during the 60-day comment period, given a few factors. 

Under the Obama administration, CMS rarely made changes between the proposed and final rulemaking, and the Trump administration might want to differentiate itself in that regard. 

“I think this administration, at least for year one, is going to say, ‘Tell me if [rulemaking] was done in a transparent way, tell me how it affects providers, and tell me what happens to the beneficiary,” Taylor said. “If they ask those questions, if they do something like HHGM, we may be able to change it.”

Gerard agrees that CMS could make adjustments based on industry feedback.

“The sense we’re getting out of Washington and CMS is that with the new administration, there seems to be an attitude of listening to the industry and slowing regulation,” he said.

Furthermore, the 2018 proposed payment rule was developed prior to many of the Trump appointees coming on board at CMS, so that also might increase the chances of them being open to making changes, Anthony added.

Still, it would not be an easy battle.

“We may need your help more than you’ll ever know if [HHGM] comes out in that proposed rule,” Taylor said.

Written by Tim Mullaney

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