Insights: Article

Proposed Home Health Payment Changes

By   Eddie Phibbs

September 21, 2017

On July 28, the Centers for Medicare and Medicaid Services (CMS) issued the CY 2018 Home Health Prospective Payment System (HH PPS) Rate proposed rule (CMS-1672-P).  The rule is available for public review with comments due by September 25, 2017.

Under the current HH PPS, CMS pays for home health services provided during a 60-day episode of care. The combinations of episode timing, clinical and functional levels, and therapy service use categories result in 153 Home Health Resource Groups (HHRGs) into which home health episodes are categorized.

The proposed rule includes a significant change for 2019. CMS proposes to implement an alternative case-mix adjustment methodology, the Home Health Groupings Model (HHGM). The HHGM would use 30-day periods rather than 60-day episodes and rely more heavily on clinical characteristics and other patient information to place patients into more meaningful payment categories.

This change is an outgrowth of a study required by the Affordable Care Act (section 3131(d)), which found that the current home health payment system may result in home health agencies not accepting patients with clinically complex and/or poorly controlled chronic conditions who do not qualify for therapy but require a large number of skilled nursing visits. Under the current payment system, home health agencies receive higher payments for providing more therapy visits, which may incentivize unnecessary utilization.

Under the HHGM, each episode is classified into one of two admission source categories – community or institutional – depending on what healthcare setting was utilized in the 14 days prior to home health admission. 

CMS projects the overall impact of the proposed HH PPS case-mix adjustment methodology refinements is an estimated −$950 million (−4.3 percent) in payments to home health agencies in CY 2019 if the refinements are implemented in a non-budget neutral manner for 30-day periods of care beginning on or after January 1, 2019. The overall impact is an estimated −$480 million (−2.2 percent) in payments to HHAs in CY 2019 if the refinements are implemented in a partially budget-neutral manner.

The full text of this proposed rule is available on the CMS website. CMS posts all comments received before the close of the comment period as soon as possible after they have been received – please refer to: http//www.regulations.gov.

Latest Insights

July 19, 2018
Article
While it’s great to watch your team grow, hiring new employees can be a frustrating and grueling process.
July 19, 2018
Article
Often, human resources (HR) is over looked, but we’re here to tell you it’s an essential component of any organization and critically important to get right.
July 13, 2018
Article
Here are some idea for giving your new hire a smooth start into your business and alleviating stress for you.
July 13, 2018
Article
The impact of the recent SCOTUS Wayfair decision will continue to have a ripple effect on businesses and state sales tax compliance.
July 9, 2018
Article
The revenue cycle is a complex system and we have historically given much attention to the front-end and back-end while oftentimes leaving the middle functions of the cycle neglected.
July 3, 2018
Article
FASB Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, provides a 5-step framework for determining revenue recognition.
July 2, 2018
Article
As part of the Tax Reform Act of 1986, the “Kiddie tax,” a taxing regime designed to make the transfer of income items by wealthy parents to lower tax paying children less attractive, was implemented.
July 2, 2018
Article
When it comes to your employees, you likely conducted interviews on them when you first hired them.
July 2, 2018
Article
Nearly ten years after the release of the initial exposure draft, FASB issued ASU 2016-02, Leases - The standard may have been issued, but the conversation about this re-write of legacy guidance has not slowed.