[Updated] CMS Proposes Elimination of RAPs, $250 Million Medicare Payment Increase

The Centers for Medicare & Medicaid Services (CMS) is moving forward with many of the provisions originally included in the Patient-Driven Groupings Model (PDGM) while also proposing to implement a new home infusion benefit, eliminate home health pre-payments and make Value-Based Purchasing Model (VBPM) performance data public.

CMS detailed its plan for PDGM and other proposals Thursday afternoon, in addition to its annual update to the Medicare rate.

Overall, CMS’s proposed rule for 2020 includes updates that would increase Medicare payments to home health agencies by 1.3% — or about $250 million.

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“We are proud to announce the new permanent home infusion therapy benefit that will give patients the freedom to safely access critical treatments, such as chemotherapy, at home instead of traveling to the hospital or doctor’s office, improving their quality of life,” said CMS Administrator Seema Verma. “We are also proposing updates to payments for home health agencies under the new Patient-Driven Groupings Model, which focuses on patient characteristics to more accurately pay for home health services, rewarding value over volume.”

Perhaps most notably in Thursday’s proposed rule is CMS’s ambitions to phase out pre-payments for home health services. Currently, home health providers can obtain 50% to 60% of the anticipated payment at the beginning of a patient’s care episode through a Request for Anticipated Payment (RAP). 

Government watchdogs have seen “a marked increase in RAP fraud schemes perpetrated by existing home health agencies that receive significant upfront payments, never submit final claims and then close for business,” according to CMS.

Specifically, CMS is proposing to phase out RAP payments for existing providers over the next year and eliminate them completely by 2021.

“CMS believes that phasing out RAP would help mitigate cash flow concerns by phasing out RAP payments over one year,” agency officials wrote in a press release highlighting the proposal. 

The $250 million rate increase reflects the effects of the 1.5% — or $290 million — home health payment update percentage mandated by the Bipartisan Budget Act of 2018, according to CMS. It also reflects a 0.2% decrease in aggregate payments due to reductions made by the new rural add-on policy.

Over the past several months, home health stakeholders and lawmakers on Capitol Hill have urged CMS to reconsider PDGM’s widely opposed behavioral assumptions, previously estimated to add up to a 6.42% cut to home health payments. The most recent efforts came July 2, when a group of bipartisan, bicameral lawmakers urged Verma to call the behavioral assumptions off.

But CMS’s Thursday proposal only doubled down on those assumptions, according to National Association for Home Care & Hospice (NAHC) President William A. Dombi.

“The proposed rule continues the harmful application of a ‘behavioral adjustment’ that CMS established during the 2019 rulemaking, actually increasing the resulting rate reduction to 8.01% from 6.42% last year,” Dombi told HHCN in an email. “As such, the disruptive impact of instituting a completely new payment model is compounded by a rate reduction that is wholly based on conjecture and assumptions. It appears we need the wisdom of Congress to intervene and stop this proposal from becoming reality.”

While PDGM — the biggest overhaul to the home health payment landscape in two decades — includes sensible changes, “the behavioral adjustment is neither sensible nor warranted,” he added.

NAHC plans to continue its advocacy push in days to come as it analyzes the more than 350-page rule.

The Partnership for Quality Home Healthcare (PQHH) is likewise reviewing the proposed rule and “looks forward to” submitting formal comments to CMS, Chairman Keith Myers told HHCN in an email.

“We are committed to continued collaboration with CMS in the refinement of [PDGM] to ensure care for our vulnerable patient population is not disturbed in the implementation of this new payment model,” Myers, who also serves as CEO of LHC Group Inc. (Nasdaq: LHCG), said. “Further, we continue to work with our bipartisan congressional champions to advance legislation designed to ensure the new payment model incorporates a data-driven approach to provide stability in the home healthcare sector as we transition to a new system.”

Home health agencies in nine states have been participating in the VBPM demo since its launch in January 2016. Broadly, the purpose of the demo is to tie payment to certain quality metrics, with upward or downward adjustments depending on performance.

In 2019, for example, home health providers in the participating states were exposed to a maximum adjustment of 5%. In 2020, that adjustment rises to 6%, with a 1% annual increase in 2021 and 2022.

For calendar year 2020, CMS is proposing to publicly report Total Performance Scores (TPS) and TPS Percentile Ranking for each home health agency in the nine model states that qualified for a payment adjustment. The agency expects that data to then be made public after Dec. 1, 2021.

“One of the goals of the [VBPM] is to enhance the current public reporting process for home health,” agency officials wrote. “CMS believes that publicly reporting … performance data would contribute to more meaningful and objective comparisons among [agencies] on their level of quality relative to their peers, incentivize [them] to improve their quality performance and could enable beneficiaries to make better-informed decisions about where to receive care.”

Also included in CMS’s latest proposed payment rule is a pitch for a permanent home infusion therapy benefit to be implemented in calendar year 2021, a step mandated by the 21st  Century Cures Act.

CMS’s full proposed rule is available here.

Additional reporting by Bailey Bryant

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