[Updated] CMS Proposes $540M Home Health Payment Boost, Permanent Telehealth Changes

The Centers for Medicare & Medicaid Services (CMS) is proposing to make telehealth flexibilities for home health providers introduced in light of the coronavirus permanent.

Yet providers would still be forced to provide the virtual care without payment.

CMS detailed that proposal and others Thursday afternoon, along with its annual suggested update to the Medicare rate.


CMS’s proposed rule for 2021 would increase Medicare payments to home health agencies by 2.6%, which equates to a roughly $540 million bump. Last year, the proposed rule for 2020 included an increase of only 1.3%.

In addition to boosting the Medicare home health reimbursement rate and making certain telehealth changes permanent, the proposed rule would create new Medicare enrollment policies for qualified home infusion therapy suppliers and update the home infusion payment rates.

Overall, relatively few changes were introduced in the FY 2021 proposal, according to National Association for Home Care & Hospice (NAHC) President William A. Dombi.


That’s relatively good news for home health providers, who are currently working through the transition to the Patient-Driven Groupings Model (PDGM) while dealing with COVID-19.

“CMS has issued the proposed Medicare home health services payment rule in June for the first time in several years,” Dombi told Home Health Care News in an email. “It is evident from the rule that its early release was made possible by the limited changes that CMS proposes. NAHC appreciates CMS’s recognition that any significant changes during the infancy of the PDGM system would be premature given the limited data available from 2020, combined with the chaos created by the COVID-19 pandemic. This proposal should help home health agencies achieve some semblance of stability during these difficult times.”

One change home health agencies would have liked to see that they did not is reimbursement for telehealth services, which CMS has said that it does not have the authority to introduce and that Congress must initiate.

But amid COVID-19, telehealth use in the industry has skyrocketed, with lack of reimbursement largely forcing agencies to provide virtual care at a loss, also triggering higher LUPA rates.

In 2021, CMS plans to stand by that. While CMS wants to permanently OK the use of technology allowed under COVID-19, telehealth still can’t substitute for in-person visits or be reimbursed.

However, it appears providers could get some help on the front end, when plans of care are being ordered.

“The use of technology may result in changes to the frequencies and types of in-person visits as ordered on the plan of care,” CMS wrote in a fact sheet. “This rule also proposes to allow HHAs to continue to report the costs of telecommunications technology as allowable administrative costs on the home health agency cost report beyond the PHE for the COVID-19 pandemic.”

In Thursday’s proposal, CMS said it is not making any changes to the Home Health Quality Reporting Program (HH QRP).

Additionally, the agency is making limited changes to OASIS requirements under Medicare Conditions of Participation (CoPs). The proposed rule, if finalized, would remove an obsolete provision that requires new home health agencies that do not yet have a CMS certification number to conduct test OASIS data transmissions to the CMS data system as part of the initial certification process.

While CMS isn’t making any telehealth-related changes to how LUPAs are handled, it’s also not making any changes to LUPAs under PDGM, generally.

“CY 2020 was the first year of the new case-mix adjustment methodology and 30-day unit of payment and at this time we do not have sufficient CY 2020 data in which to make any changes to the LUPA thresholds for CY 2021,” the agency wrote in its proposed rule.

The full text of CMS’s 2021 proposed payment rule is available here.

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