[Updated] CMS Proposes Home Health Groupings Model, $400 Million Medicare Payment Boost

The Centers for Medicare & Medicaid Services (CMS) is proposing to overhaul the home health prospective payment system and continue the shift toward value-based care. Specifically, the agency is moving forward with the Patient-Driven Groupings Model (PDGM) and floating several other changes, as well as the annual update to the Medicare rate.

Proposed changes are projected to increase Medicare payments to home health agencies by 2.1%, or $400 million, in calendar year 2019, according to a Monday announcement from CMS.

The proposed PDGM model, required by the Bipartisan Budget Act of 2018, is intended to remove current incentives to over-provide therapy services and halves the 60-day episode of care unit of payment to 30 days, according to CMS. The PDGM model would be budget neutral and not implemented until Jan. 1, 2020.


Congress has mandated that Medicare shift to value over volume by stopping the use of number of therapy visits provided by home health agencies to determine payment.

The PDGM model is an updated version of the Home Health Groupings Model (HHGM), widely opposed by home health providers and industry groups. A key difference, though, is the fact PDGM is budget neutral.

When CMS first introduced the HHGM framework in July 2017, it was estimated that the model would result in an overall $950 million payment cut for providers if implemented in a non-budget neutral manner and a $480 million cut if implemented in a partially budget-neutral manner.


“ElevatingHOME looks forward to responding to the significant changes proposed in this year’s [home health prospective payment system],” Joy Cameron, vice president of policy and innovation for the industry association, told Home Health Care News in an email. “Over the next two weeks, we will be working with members, allies in home-based care and champions to discuss the significant changes proposed by CMS.”

To help make sense of PDGM’s impact, CMS plans to, upon request, make available to providers a Home Health Claims-OASIS Limited Data Set (LDS). It will be “vital” for providers to place a request, Cameron said.

Largely due to a storm of public comments filed against it, HHGM was not included in CMS’ final rule for the home health prospective payment system last November. Industry groups estimated the model would translate to a 15% to 17% rate cut to providers.

The 2018 final rule included a payment rate reduction of $80 million, or 0.4%.

Even then, however, home health stakeholders were expecting a reappearance in some form.

Although updated to be budget neutral, PDGM still has red flags, National Association for Home Care & Hospice (NAHC) President William Dombi told HHCN in an email.

“In the 600-page proposed regulation, it appears that the 2020 model is a modestly adjusted and ‘warmed over’ version of the highly criticized [HHGM] re-labeled as [PDGM],” Dombi said. “Many of the same weaknesses present in HHGM exist in this new version.”

Beyond PDGM

In addition to PDGM, CMS’s newly proposed changes also include plans to allow the cost of remote patient monitoring to be reported by home health agencies as allowable costs on the Medicare cost report form. The move is expected to promote the adoption of emerging technologies and foster more effective care planning, including the sharing of data throughout the continuum of care, according to CMS.

The change is part of the Trump administration’s MyHealthEData initiative.

The proposed rule includes a variety of other potential changes, including updates to the home health quality reporting program and the value-based purchasing program.

For the home health quality reporting program, updates generally focus on removing or replacing certain measures to further align with other CMS policies and reporting programs.

Updates to the value-based purchasing program also predominately focus on altering measures. CMS, for example, is proposing the removal of two OASIS-based measures, the “Influenza Immunization Received for Current Flu Season” measure and the “Pneumococcal Polysaccharide Vaccine Ever Received” measure.

CMS will be accepting comment through Aug. 31, 2018.

“We will be addressing all of our concerns with CMS through the rule making process and enlisting congressional support as needed to develop a reasonable payment reform,” Dombi said. “These proposals represent some of the most significant change in the home health payment system in nearly 20 years.”

The full rule can be accessed here.

Written by Robert Holly

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