[Updated] CMS Finalizes Home Health Payment Rule Without HHGM

The home health groupings model (HHGM) has been defeated—for now.

The Centers for Medicare & Medicaid Services (CMS) released its final rule for the home health care prospective payment system (PPS) 2018 update without finalizing HHGM, which was proposed to be implemented in 2019.

“We are not finalizing the implementation of the Home Health Groupings Model (HHGM) in this final rule,” the rule reads. “We received a number of comment from the public that we would like to take into further action.”


HHGM was one of the most significant regulatory proposals to hit the home health care industry in decades. It proposes to swap the current 60-day episode of care into a 30-day payment period, and could have slashed as much as $950 million in reimbursement payments to providers in 2019 alone. Industry groups estimate the model translates to a 17% or 15% rate cut to providers. It also proposes to change reimbursement rates and incentives for therapy services, which some industry advocates said would reduce care access.

When the proposal was announced in July, home health stocks took a serious hit and industry associations spoke out against the rule being passed in its proposed form.

The 2018 final HH PPS rule includes an economic impact a payment rate reduction of $80 million, or 0.4%, to home health agencies, consistent with the proposed rate. The adjustment includes a -0.97% adjustment, or $170 million reduction, to the national, standardized 60-day episode payment rate to account for nominal case-mix group; a 1%, or $190 million increase, home health payment update percentage; and a 0.5 percent reduction, or $100 million decrease, in payments due to the sunset of the rural add-on provision.


The rule also finalizes changes to the home health value-based purchasing (VBP) model.

Read the final rule on the Federal Register here.

Industry Backlash 

The delay of HHGM is a partial win for the industry. The proposal was met with fierce opposition, and the decision Wednesday was already met with relief by stakeholders.

“Amedisys is encouraged that the Centers for Medicare & Medicaid Services (CMS) heeded the concerns of patient advocates, the provider community and bipartisan Members of Congress by not finalizing the Home Health Groupings Model (HHGM) in the final Home Health Prospective Payment System (HHPPS) Proposed Rule for CY 2018,” Amedisys (Nasdaq: AMED) CEO Paul Kusserow said in a statement. “This decision by CMS will allow the provider community time to work with CMS in redesigning a home health payment system centered on patient care. We’re confident that this decision, by recognizing the need for collaboration between government and industry, will help ensure patients’ access to vital care in the home and lower healthcare costs overall.”

More than 1,300 comments were left by stakeholders on the Federal Register during the public comment period, mostly urging CMS to drop the rule. From bills to meetings with CMS officials, industry associations were on overdrive in their efforts to overturn or delay the proposal.

“We are very grateful that CMS seriously considered our concerns about HHGM and decided to not finalize its proposal,” Bill Dombi, president of the National Association for Home Care & Hospice (NAHC), told HHCN.

However, the industry may not be out of the woods just yet. While HHGM was not finalized in the 2018 rule, it’s not completely off the table.

CMS stated it plans to consider many of the comments on HHGM that were publicly posted on the Federal Register. Namely, CMS noted that commenters were “generally supportive” of revising the case-mix methodology, they were most concerned with the proposed 30-day episode of care—”and such change being proposed for implementation in a non-budget neutral manner.”

“Commenters also stated their desire for greater involvement in the development of the HHGM and the need for access to the necessary data in order to replicate and model the effects on their businesses,” the final rule reads.

CMS also addressed the industry’s desire to be more involved in the process of developing a new model.

“We look forward to engaging closely with the Administration, as requested in the final rule, to address our concerns and work collaboratively with CMS, the Administration, Congress and the beneficiary community to develop policies that support the delivery of quality care in the most cost-effective setting – the home,” Keith Myers, CEO of LHC Group (Nasdaq: LHG) and chairman of the Partnership for Quality Home Healthcare, said in a statement.

Numerous lawmakers also jumped into the fight, including 49 senators who signed on to letters opposing HHGM within the final payment rule for 2018.

More recently, 174 signatories stated that the lack of “methodology and data points” from CMS made it impossible to fully determine the impact of HHGM. The signatories, which included 39 Republicans and  99 democrats from the House of Representatives, urged CMS to “refrain from finalizing the proposed HHGM” until the impact could be fully understood in an October 25 letter to CMS Administrator Seema Verma.

“The proposed CMS policy change could have severe consequences in delivering home health services, which will result in more hospitalizations and more families being separated when sick loved ones need support the most,” Congressman Ralph Abraham, M.D. (R-L.A.), who led the letter to the Department of Health and Human Services (HHS), said in statement.

Written by Amy Baxter

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