CMS Shoots for Home Health Industry Stability in Proposed Payment Rule for 2021

The U.S. Centers for Medicare & Medicaid Services (CMS) released its proposed home health payment rule for 2021 last Thursday — the first time in a number of years the agency has done so in June.

With relatively minimal changes, CMS’s proposal grants the home health industry a level of much-needed stability during a chaotic period that’s dually marked by COVID-19 and the Patient-Driven Groupings Model (PDGM).

Among other things, CMS’s proposal pushes to make certain telehealth changes that were introduced during the COVID-19 emergency permanent.


Despite many providers having been vocal about the need for telehealth reimbursement under Medicare, there’s still no payment for virtual care for home health. That’s not surprising, however, as creating a virtual care payment mechanism would first require congressional action.

If the 2021 proposed payment rule is finalized as written, providers will be allowed to use telehealth when providing care to Medicare beneficiaries even after the COVID-19 emergency subsides.

“It would have been nice to see [CMS] embrace telemonitoring as a billable unit of service,” Mark Sharp, a partner at BKD, a Springfield, Missouri-based accounting services firm, told Home Health Care News. “They still have not done it with the COVID-19 waivers, nor in this payment rule. The fact that they haven’t fully embraced using technology as a billable encounter — it’s a little frustrating.”


Still, the proposal requires providers to include telehealth services under the plan of care, which is a step in the right direction that will hopefully lead to future discussions about telehealth reimbursement.

That’s according to Mike Simione, senior manager at Hamden, Connecticut-based Simione Healthcare Consultants.

“Obviously, there’s been a huge increase in the volume of telehealth that is utilized to see patients, and agencies would have preferred to have those virtual visits reimbursed,” Simione told HHCN. “But the one thing I will say — it is necessary now to include it in the plan of care, as well as being included as an allowable cost on the cost report.”

CMS also made small changes to the OASIS requirements under Medicare’s Conditions of Participation (CoPs). The proposed rule would eliminate a provision that requires new home health agencies to transmit test data to the Quality Improvement & Evaluation System (QIES) or CMS OASIS contractor.

Perhaps the biggest change for providers has to do with wage index area designations, which CMS is hoping to update to reflect new census information. Specifically, CMS is calling for a 5% cap to any reduction in the wage index.

Currently, there’s no cap on wage index increases.

“This will lead to a lower reimbursement both on the periodic and the per-visit rates,” Simione said. “Even though it only affects a subset of providers, the ones in those counties that are transitioning really need to pay attention to those changes. For some of them, they’ll be a transitional wage index because of that 5% cap for one year, and then they’ll transition. It could be up to even more than 5% over a two-year period.”

CMS’s proposed rule also seeks to raise Medicare payments to home health agencies by 2.6% — or about $540 million.

“It’s refreshing to see CMS pause on all the payment attacks from the past of having lesser increases,” Sharp said.

CMS said it only proposed slight changes because data is still coming in from PDGM. The public health emergency’s impact on patient case mix, service modalities and patient volume was another factor.

“The ability to make significant alterations would be based on very little data,” Simione said. “It’s responsible [of CMS] to make sure they are not acting in haste. We’re still understanding how this new payment model impacts agencies. We don’t even have a clear understanding because the entire second quarter and some of the end of the first, we were in the middle of a pandemic.”

Similarly, the Partnership for Quality Home Healthcare applauded CMS’s decision to prioritize stability.

“The Partnership is appreciative of many of the stabilizing provisions of this year’s Home Health Payment Proposed Rule, which underscore the value that CMS places on home health providers as an important component of the care delivery system,” Joanne Cunningham, executive director of the organization, told HHCN in an email. “During this uncertain time of COVID-19, the home health community, as well as the entire health care system, is experiencing significant pressure and this proposed rule signals a recognition of that reality.”

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