[Updated] CMS Finalizes Home Health Value-Based Purchasing Expansion, 3.2% Rate Increase

It’s official: Providers everywhere will soon be subject to the Home Health Value-Based Purchasing (HHVBP) Model. The first performance year of the expanded initiative — recognized as one of the most successful alternative payment models ever — will be calendar year 2023.

The U.S. Centers for Medicare & Medicaid Services (CMS) released the 2022 home health final payment rule on Tuesday. In addition to cementing the nationwide HHVBP expansion, the rule sets a 3.2% increase to the home health Medicare rate for next year, a bump of about $570 million.

The agency had initially proposed a 1.7% increase in June.


“Today, [CMS] acted to improve home health care for older adults and people with disabilities through a final rule that would accelerate the shift from paying for Medicare home health services based on volume to a system that pays for value,” the agency wrote in an announcement.

Along with HHVBP, CMS is finalizing policies that lock in pandemic-era blanket waivers related to home health aide supervision and the use of telecommunications in conducting assessment visits.

“While we are finalizing the limited use of telecommunications technology when performing the 14-day supervisory visit requirement when a patient is receiving skilled services, we expect that in most instances, the [home health agency] would plan to conduct the 14-day supervisory assessment during an on-site, in-person visit,” CMS stated. “And that the [agency] would use interactive telecommunications systems option only for unplanned occurrences that would otherwise interrupt scheduled in-person visits.”


Tuesday’s rule also featured an update to home infusion therapy services payment rates and finalized a recalibration to parts of the Patient-Driven Groupings Model (PDGM).

Specifically, CMS is tweaking case-mix weights, functional levels and comorbidity adjustment subgroups while maintaining 2021’s Low-Utilization Payment Adjustment (LUPA) thresholds for 2022.

The National Association for Home Care & Hospice (NAHC) called the final rule “a combination of significant and minor changes.”

“All told,” NAHC President William A. Dombi told Home Health Care News in an email, “the final rule is a combination of standard adjustments, reasonable policy actions during a continued Public Health Emergency, sensible postponements in policy reforms, and unfortunate rejections of some recommendations, such as a consistent wage index policy, that would protect access to care. NAHC agrees that CMS needed to be cautious at this unsettled time, and we recommended CMS avoid taking premature steps that could disrupt a fragile health care system based on a myriad of assumptions and limited data from a chaotic period.”

With respect to PDGM, CMS did not eliminate its 4.36% behavioral adjustment.

Yet the agency did signal a willingness to explore the topic further.

“While we continue to have concerns over the implementation of the behavioral adjustment cuts, the slight uptick in the payment rate for 2022 takes a modest step in recognizing the increased labor costs home health providers are continuing to experience,” Joanne Cunningham, executive director of the Partnership for Quality Home Healthcare (PQHH), said in a statement. “We note CMS’ commitment in the final rule to consider all alternative approaches to the budget neutrality methodology, and we look forward on working with them to properly address this in future rulemaking.”

Accelerating the shift to value

The CMS Innovation Center launched the HHVBP Model as part of a nine-state demonstration project in 2016 to gauge whether policymakers could improve the quality and delivery of home health care through financial incentives.

In 2018, the first year providers were exposed to financial incentives, the maximum payment adjustment was 3%. That gradually climbed to a maximum adjustment of 6% last year.

Over the past decade, CMS and its innovation hub have launched more than 50 alternative payment models. Just four ended up meeting requirements for expansion, with HHVBP being one of the most successful experiments.

In fact, HHVBP has resulted in an average annual savings of $141 million to Medicare since its 2016 implementation, according to CMS.

“CMS is committed to helping people get the care they need, where they need it,” CMS Administrator Chiquita Brooks-LaSure said in a statement. “This final rule will improve the delivery of home health services for people with Medicare. It will also improve our data collection efforts, helping us to identify health disparities and advance health equity.”

In its final rule for 2022, CMS is moving forward with its plan to implement an HHVBP adjustment capped at 5%. While 2023 will be the first performance year, 2025 will be the first payment year.

CMS is additionally moving forward with its plan to spike 2020 for home health agencies already competing in the nine demonstration states. Performance data for that year will go unreported as well.

“We are designating CY 2022 as a pre-implementation year in response to a number of comments we received,” CMS explained in the 528-page final rule.

While CMS is slightly adjusting the timing of HHVBP compared to its June proposal, the agency is mostly keeping the performance criteria and competition framework the same.

Similar to the nine-state demo, home health agencies will compete based on certain improvement and achievement metrics derived from OASIS items, claims data, and Home Health Consumer Assessment of Healthcare Providers and Systems (HHCAHPS) surveys.

Unlike the demo, however, agencies will be split up into “large” and “small” cohorts, as defined by whether they are exempt from submitting the HHCAHPS survey. Furthermore, unlike the demo, agencies will compete on a national basis — not exclusively against their same-state peers.

Following the proposed expansion, several home health leaders urged CMS to do a better job judging providers that take care of highly complex patients unlikely to show signs of improvement. Others asked the agency to somehow factor in providers’ ability to address social determinants of health (SDoH).

CMS declined to adjust HHVBP based on those requests.

“We do not have evidence to suggest that [agencies] that care for beneficiaries with more significant social risk factors would receive decreased [fee-for-service] payments under the expanded Model,” the agency wrote in the final rule.

CMS also declined to shift to more of a shared-savings approach to enhance incentives.

“We appreciate this comment, but it is outside the scope of our proposals on the expansion of the HHVBP Model,” CMS noted.

CMS is also updating home health Conditions of Participation (CoPs) to permit an occupational therapist to conduct the initial home health assessment visit and complete the comprehensive assessment under the Medicare program, but only when occupational therapy is on the home health plan of care.

The final rule is available here.

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