[Updated] HHS Announces Plans to Expand the Home Health Value-Based Purchasing Model

Home health providers are getting one of their biggest wishes granted.

The U.S. Department of Health and Human Services (HHS) announced Friday that it is expanding the Home Health Value-Based Purchasing (HHVBP) Model. First implemented in 2016, the HHVBP Model is currently active in just nine states: Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska and Tennessee.

HHS Secretary Alex Azar has already signed off on an expansion, the department noted. Friday’s announcement did not specify the extent of the expansion, but clarified that HHS would execute the implementation through rulemaking no earlier than Jan. 1, 2022.


“The CMS Office of the Actuary has certified, based on its independent assessment of the model’s performance over the first three years of the Model, that an expansion would reduce, or not result in any increase in, net Medicare spending,” the announcement stated.

Designed as part of the government’s shift away from volume-based reimbursement, the HHVBP Model is a mandatory program that rewards or penalizes home health providers based on their quality performance.

If providers kept their patients healthy and out of the hospital in 2020, for example, they could have received an upward Medicare payment adjustment of 6%. If they did a poor job of delivering care, however, that turned into a 6% penalty.


The maximum payment adjustment tied to value is set at 7% in 2021, with another 1% increase scheduled for 2022. The HHVBP payment adjustment was 3% in 2018 and 5% in 2019.

In a related announcement, U.S. Centers for Medicare & Medicaid Services (CMS) Administrator suggested the expansion is related to its ongoing response to the COVID-19 public health emergency, which the federal government officially extended on Thursday.

“The Coronavirus pandemic has tragically illustrated how important it is for elderly Americans to have a robust set of options outside of nursing homes,” Verma said. “Nursing homes will always be an important part of the care continuum — especially for those who need an intensive level of care — but home health services are often preferred by seniors. Expansion of this model would improve the overall value and quality of that home health care — and seniors stand to benefit.”

Since put into action, HHVBP has resulted in an average 4.6% improvement in home health agencies’ quality scores as well as average annual savings of $141 million to Medicare, according to CMS.

Brad Smith, director of the Center for Medicare & Medicaid Innovation (CMMI), hinted the Home Health Value-Based Purchasing Model was destined for expansion in October. He additionally pointed out that the model has been one of CMMI’s most successful value-based care initiatives to date.

“[HHVBP] is a great example of how the Innovation Center can design successful models that both improve quality for Medicare beneficiaries and lower costs,” Smith said on Friday. “Over the past year, we have taken a data-driven approach to assessing all the Innovation Center’s models, and we are excited that HHVBP has met our gold standard for expansion as laid out by Congress.”

For the most part, home health providers have been supportive of value-based purchasing, banking on their ability to skillfully care for even the sickest and most vulnerable patients.

“The HHVBP has been positively received by home health agencies with positive results for Medicare and Medicare patients,” William A. Dombi, president of the National Association for Home Care & Hospice (NAHC), told Home Health Care News in an email. “We are very interested in more detail about the expansion plan.”

NAHC also looks forward to “fine tuning the program with CMS” before any expansion occurs, he said.

LHC Group Inc. (Nasdaq: LHCG) operates across all nine active HHVBP states.

It has been encouraged by the positive results it has seen thus far and would likely support a nationwide expansion moving forward, Chairman and CEO Keith Myers told HHCN in November.

“The details are always important, but given a choice between strict fee-for-service versus some sort of value-based purchasing, we’re always going to take the value-based option,” Myers said.

An earlier analysis of the HHVBP Model found that Medicare spending decreased by 1.2% for 2016 to 2018 during the period of the home health episode, plus the next 30 days.

Unplanned acute care hospital expenditures were reduced by $1.50 per day, or 4.5%. Skilled nursing facility (SNF) expenditures fell by 4% per day, while emergency department expenditures increased by 5.9% per day.

For the nine states, expenditures in five states were reduced, with another three states not showing a statistically significant difference. Spending increased 3.5% per day in one state, Maryland, an increase which was statistically significant.

The chief actuary of CMS said the first three quarters of 2019 had similar results.

Secretary Azar has determined that an expansion of the HHVBP Model would “likely improve quality of care for Medicare beneficiaries, without denying or limiting coverage or provision of benefits to Medicare beneficiaries,” according to HHS.

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