Spending Bill Holds Wins and Losses for Home Health Care

President Donald Trump signed a sweeping spending bill into law on Friday, February 9, just hours after it was approved by lawmakers and after the government temporarily shut down without a deal. The bill, which will fund the federal government for two years, includes many health care measures that will impact the home health care industry.

The big change to grab headlines is a new payment model for home health care providers, which will shift the current 60-day unit of payment to a 30-day model.

Beyond the 30-day payment model, the bill seeks to make several adjustments to existing programs and regulations that are likely to be welcomed by providers, including the face-to-face mandate, a rural add-on and changes to address the backlog of Medicare claims appeals.


However, the bill also contains a market basket adjustment that could result in Medicare cuts in 2020.

Market basket update

The bill updated the market basket rate for home health care to 1.5% in 2020. That’s a change from the 1.4% rate originally slated for 2019. The adjustment will result in a cut to overall home health care payments—roughly $3.5 billion over 10 years, according to the CBO.


“While it is a cut, the 1.5% increase that will occur in 2020 is bigger than HHAs received between 2012-2018,” Bill Dombi, president of NAHC, told Home Health Care News. “As they have in recent years, we expect HHAs will cut some costs and tighten the amount of care given in an episode. However, that is easier said than done.”

While Politico called home health care providers “losers” in the spending deal as a result of the adjustment, the outcome is actually far less worrisome for home health care agencies than previous proposals. Furthermore, language in the bill secures some safeguards as payment reform moves forward—particularly around the new payment framework as compared to the proposed home health groupings model (HHGM) last year.

“Politico did not seem to understand the value of budget neutrality in payment reform as far surpassing the rate increase reduction,” Bill Dombi, president of NAHC, told HHCN. “Budget neutrality alone should bring $10 billion in value to home health given what CMS had proposed in cuts with HHGM last year. On top of that, the guardrails on behavioral adjustments could help HHAs avoid another $20 billion in cuts that were part of HHGM. The limiting of the inflation update to 1.5% in one year falls far short of that value.”

Share prices of some of the biggest publicly traded home health care stocks also reacted positively to the spending bill, with Almost Family (Nasdaq: AFAM), Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG) all trending up Friday.

Rural add-on 

Like previous years, the rural add-on for home health care providers was approved in the mega spending bill. The add-on helps ensures providers can continue services to patients by covering the additional transportation and staffing costs required in remote areas.


In addition, home health care providers may see some relief when it comes to the burdensome face-to-face requirement.

“It essentially gutted the mandate that CMS look at both physician and HHA records when determining coverage eligibility,” Dombi told HHCN. “CMS may choose to change its policy position on documentation, but it is not required. If CMS does not favorably exercise its discretion under the bill, HHAs will see no change from the present.”

Independence at Home

The bill also extends Independence at Home, a program from CMS that incentivizes primary care at home. The program originally began as a three-year pilot, and it was floated to become permanent in 2016. While a money-saver, it has been found to save less than originally projected, about $746 per beneficiary in 2016.

The bill extends the program by seven years.


Lawmakers also solidified the Chronic Care Act within the spending bill, which expands telehealth coverage under Medicare.

For 2020, Medicare Advantage plans can also provide additional telehealth benefits to enrollees. A comment period on what types of items and services can be included will begin no later than Nov. 20, 2018, according to the legislation. Similarly, accountable care organizations (ACOs) have an ability to expand the use of telehealth services under the bill, with a study by 2026 required by federal agencies.

Written by Amy Baxter

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