Value-Based Purchasing Proposals May Signal Expanded Rollout

The Patient-Driven Groupings Model (PDGM) largely stole the show when the Centers for Medicare & Medicaid Services (CMS) released its proposed payment rule earlier this month. But there were also some important and surprising positives within the rule’s 600 pages that home health providers shouldn’t ignore, industry executives and analysts say.

The two most striking perks are CMS’ plans to further refine the Home Health Value-Based Purchasing Model (VBPM) and to allow providers to include remote patient monitoring expenses in their Medicare cost reports, Luke James, chief strategy officer for the home health and hospice segment of Encompass Health (NYSE: EHC), told Home Health Care News.

Birmingham, Alabama-based Encompass Health offers facility-based and home-based patient care in three dozen states and Puerto Rico through its sprawling network of rehabilitation hospitals, home health agencies and hospice locations. Encompass Health’s most recent quarterly net revenues totaled about $1.1 billion, partially driven by volume growth in its home health and hospice offerings, the company announced last Thursday.


“There were a couple of unexpected positive elements that were included in this rule that the industry and Encompass Health have been sharing thoughts and comments with CMS on for some time,” James said. “I think VBPM and remote patient monitoring were the biggest.”

Mike Dordick—incoming president of the Wayne, Pennsylvania-based health care services and consulting firm McBee Associates—echoed those sentiments about VBPM and remote monitoring.

When it comes to VBPM, the proposed changes, if implemented, would more fairly weight achievement over improvement in rewarding or penalizing home health agencies, Dordick told HHCN.


That’s something providers have been pushing for since CMS began testing the VBPM model in 2016.

“Obviously, the No. 1 aspect of the proposed rule is PDGM,” he said. “But the value-based purchasing piece is interesting, as well, because it’s going to move forward.”

CMS fine tuning value-based purchasing model

CMS is proposing multiple tweaks to VBPM for calendar year 2019. The key takeaway, though, it that policymakers are fine tuning the model, perhaps gearing up for a larger or even U.S. expansion.

All Medicare-certified home health agencies providing services in Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee and Washington are currently required to compete in the VBPM model. The VBPM adjusts individual agency payments up or down depending on their performance on certain measures.

Payment adjustment for agencies in 2018 were set at a maximum of 3%, for example, though CMS plans to incrementally increase that figure to 8% by 2022. Adjustments are tied to OASIS data, survey results, select claims data and a handful of other measures.

“CMS is making recommendations for changes based on what it has seen in the beginning parts of value-based purchasing,” Dordick said. “What we’re seeing with the changes in the 2019 rule are the first steps to getting [VBPM] to where it may go nationwide.”

One of the agency’s proposed refinements of VBPM is removing five measures overall, while simultaneously adding two new proposed composite measures.

OASIS-based process measures “Influence Immunization Received for Current Flu Season” and “Pneumococcal Polysaccharide Vaccine Ever Received” would be scrapped entirely, while “Improvement in Bathing,” “Improvement in Bed Transferring” and “Improvement in Ambulation-Locomotion” would be replaced by two normalized composites that use several of the same activities of daily living benchmarks.

The overarching goal of the reshuffling is to create a more comprehensive assessment of home health agency performance, according to CMS.

On an operational level, it’s too early to tell exactly how the tweaks would play out for agencies, Dordick said. If finalized, providers will need to internally revisit which measures they’re prioritizing, he said.

“We at McBee are still going into the analytics, so I don’t have all the details at this point to say what it means,” Dordick said.

Besides taking away and adding measures, CMS’ proposal also calls for a reduction to the maximum amount of improvement points an agency can earn in the value-based purchasing model, another factor taken into account for payment adjustments. Agencies have had ample time to boost the quality of their care, so it’s now time for “a slightly stronger focus on achievement,” according to CMS.

Prioritizing achievement over improvement is in line with public comments and suggestions made during past technical expert panels.

“Agencies that have been performing at a high level for years are all of a sudden being penalized because they set such a high bar for themselves,” James said. “To incentivize low-performing agencies to improve is a great idea, but to put that on the same level of absolute performance, I think, was a step too far.”

Even with possible rebalancing, VBPM would still likely overvalue improvement, he said.

“My initial read is that it doesn’t go far enough,” James said. “But it is a move in the right direction.”

Additionally, CMS is also proposing to reconsider the interplay of OASIS-based, claims-based and survey-based measures under VBPM. In its early rollout, the three categories have been weighted equally for the purpose of payment adjustment. Moving forward, CMS is aims to place greater focus on claims-based measures because they have remained relatively flat in terms of improvement.

Encompass Health supports the idea, too.

“When it was first proposed—our initial comments back to CMS, both in formal and informal conversation—were to put much more weigh on the actual claims-based outcome measures,” James said. “Measures that are actually tracked by CMS and not self-reported by home health agencies.”

Correcting ‘counterintuitive’ remote patient monitoring policy

At any given time, roughly one-quarter of MaineHealth Care at Home patients are part of its growing—and extremely successful—telemedicine program. That’s according to Donna DeBlois, president and CEO of the Saco, Maine-based company, which provides skilled, personal, palliative and hospice care to more than 1,600 patients in the state.

Since launching its telemedicine and virtual care strategy, MaineHealth has slashed its hospital readmission rate for participating patients with heart failure to 1.2%, according to DeBlois. The national average for the patient population, in comparison, is about 18%.

Despite the promising results, current policy means MaineHealth hasn’t been able to include its full investment into telemedicine as a care expense when it reports to Medicare.

“When you’re looking at the cost of care, we were never able to calculate our investment in [remote patient monitoring] into that,” she said. “And Medicare uses that cost report for a lot of different tings, including decision making and benchmarking.”

Correcting that “counteractive” oversight would be progress toward making telemedicine and remote patient monitoring efforts more mainstream, DeBlois said.

Remote patient monitoring uses digital technologies to collect medical and other forms of health data from individuals in one location and electronically transmit that information securely to health care providers in a different location, according to CMS. That includes data on weight, blood pressure, heart rate and other biometrics.

CMS’ plans for VBPM and remote patient monitoring may be two of the biggest, specific positive policy moves in its 2019 proposed rule, but they weren’t the only pleasant surprise for providers. Combined, proposed changes are projected to increase Medicare payments to home health agencies by 2.1%, or $400 million.

“It’s been something like 10 years since Medicare gave us a positive rate,” James said. “That’s going to allow us to invest in our business and our employees.”

Written by Robert Holly

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