Nearly a month after the U.S. Centers for Medicare & Medicaid Services (CMS) released its CY 2024 final payment rule, the ins and outs of it have become more apparent. And there’s more to delve into than just blanket rate cuts.

Aside from the headline-grabbing 0.8% aggregate payment increase and the permanent prospective adjustment of -2.890%, there are dozens of other notable changes to home health care that providers should be aware of.

HHVBP program

More changes to the Home Health Value-Based Purchasing (HHVBP) model are in order.

More specifically, CMS is attempting to simplify performance scores.

“They’ve replaced the two normalized composite measures around self-care and mobility with a discharge function score,” Joseph Brence, head of clinical strategy for MedBridge, told Home Health Care News. “Additionally, the discharge community measure has been replaced with the discharge to community post-acute measure. These changes should make it easier for agencies to understand their performance without waiting for internal performance reports.”

Another positive change in value-based purchasing Brence laid out is replacing the acute care hospitalization measure – during the first 60 days of home health use – with the potentially preventable hospitalization measure.

By shifting to the latter, CMS is instead putting the focus on hospitalizations and ED usage that a home health agency would have been able to avoid. Today, an agency would be penalized every time a patient goes to the emergency room or is admitted to the hospital.

This change is narrowing the focus to what home health agencies can actually prevent, Brence said.

“That is a win for home health agencies,” Brence said. “So the attention and changes to how value-based purchasing is assessed does benefit the home health setting.”

Wage index, labor portion updates

From a revenue perspective, agencies can’t take the 0.8% increase at face value. One of the major updates every year in the final rule is the wage index value updates.

The wage index determines Medicare payments for home health services and is part of the calculation used by CMS to adjust payments based on regional variations in labor costs.

The wage index reflects the relative wage levels in the area where a home health agency is located.

There are over 450 Core-Based Statistical Area (CBSA) codes that get updated every year.

A majority of those codes — 59% — had a negative change in the final rule. Of those, 22.7% had a negative impact of over 3%.

“If you’re looking at agencies that are thinking, ‘Alright, we’re at least going to have a higher rate for next year, so we should be in the black when we do an apples-to-apples comparison,’” Nick Seabrook, managing principal and SVP of consulting at SimiTree, told HHCN. “Well, that might not necessarily be the case, based on the fact that the wage index values are going down.”

On the flip side, there were 38% that had a positive change — 10.8% had a change of 3% or higher.

Another significant aspect of change is related to the labor portion.

When looking at the base rate and the reimbursement calculation, there’s a distinction between the labor and non-labor portions. The labor portion undergoes updates based on the wage index.

While there was a slight decrease in this number in CMS’ final rule, it’s not expected to have a substantial impact. However, when delving into specific regions, some big changes will be felt, Seabrook said.

“In areas such as rural New England, the variations become evident,” he said. “For instance, Connecticut saw a huge jump. They went from 0.963 for the rural CBSA to 1.0075, a jump of about 4.6%. So, with the wage index jump and rate update, they’re going to see about a 4.9% increase in the standard rate.”

At the same time, Massachusetts saw their labor portion fall 5%, totaling about a 3% decrease in expected revenue.

“When agencies are trying to take a deeper dive and figure out what the true revenue impact is, that’s a huge weight,” Seabrook said.

Functional points

Another significant change can be found in the way CMS and home health agencies score and report functionality for patients in OASIS reporting.

Home health agencies typically use guidelines and criteria provided by CMS to assess patients’ eligibility for services, then developing care plans to ensure compliance with regulations.

In the updated rules, CMS will either change the actual point values that an agency gets for certain responses or they’ll change the points needed to hit each of the thresholds.

Based on the number of points an agency receives, that will tell them whether they fit into low, medium, or high categories. This year, those points changed.

“For example, dressing lower body — if you answered two, you’d get four points today,” Seabrook said. “Next year, you’re only going to get three points. Today, if you answer 3, you get 12 points. Next year, you’re only going to get 11 points.”

This may not seem like a big difference, but in 2022, 89% of the responses had either 2 or 3. If the same number of agencies answered that next year, 89% of agencies would get lower points.

“Now, it may not move the needle too much, but I would say the takeaway there is if you do see a shift in your functional scoring — even if it’s one out of 10 cases — that could be the reason for it moving forward,” Seabrook said.

Point values were changed for bathing and ambulation as well.

“The reason I wanted to highlight that is that if I would have seen this change and there was only 10% of the OASIS that it was impacting, I would have said it’s probably not going to be too big of a deal,” Seabrook said. “But you can see in these questions in particular, we’re talking about 90%, 97%, and 66%. So it is a pretty significant number. Let’s say you had a patient that answered all three of those questions the same way — all of a sudden, you’re talking about three to five or six points less for your functional points compared to what you had in 2023.”

Quality reporting, health equity

CMS also made updates to the Home Health Quality Reporting Program by introducing two new quality measures: the percentage of patients who have received the COVID-19 vaccine and the reintroduction of the functional discharge score.

“What they’re really doing here is looking at how the patients are functioning at discharge from a home health agency,” Brence said. “I think that both of these introductions are good things and in benefit of patients within the home health setting.”

Another positive sign, although the final rule doesn’t include any specific mandates or changes, is CMS’ continued commitment to examining health equity’s impact on HHVBP.l.

“While this wasn’t a formalized rule, what they did write was that they will continue to be committed to looking at health equity and how health equity is impacted by the value-based purchasing model,” Brence said. “Really ensuring that all patients receiving home health services are able to receive the services that they essentially need based upon their demographic or socioeconomic status.”