Home Health A Guide to Regulation and Legislation

CLA’s Regulatory Advisor provides an overview of CMS’ key changes in the final HH PPS rule, including the industry’s transition to PDGM.

Navigating health reform

CMS Releases 2020 Final Home Health Prospective Payment System Rule

  • Jennifer Boese
  • 8/2/2019

Update: 11/12/2019
This regulatory advisor was originally published on August 2, 2019, which covered the Proposed Home Health Prospective Payment System Rule. All updates were made to reflect the final rule.

On October 31, 2019, the Centers for Medicare & Medicaid Services (CMS) released the 2020 final Home Health (HH) Prospective Payment System (PPS) rule. The following includes a high level overview of the rule’s key provisions.

Quick look at the proposed rule

  • Patient-Driven Groupings Model (PDGM) moves forward
  • Behavioral adjustment decreased from proposed rule
  • Requests for Anticipated Payments (RAPs) phased out
  • Notice of Admission required
  • New home infusion therapy benefit
  • Quality measure changes

Payment updates

  • CMS finalized a 1.5 percent payment update as required by the Bipartisan Budget Act of 2018 (BBA 2018). This is then reduced by 0.2 percent in CY 2020 payments because of the rural add-on percentages also mandated under the BBA 2018, resulting in a net increase of $250 million.
  • The labor-related share will be 76.1 percent, and the nonlabor-related share will be 23.9 percent.
  • The per visit rates for Low Utilization Payment Adjustment (LUPA) claims will be increased by 1.5 percent compared to 2019 rates, plus a 1.0066 adjustment to account for wage index budget neutrality.
  • CMS finalized fixed dollar loss ratio for outlier payments of 0.51 for 60-day episodes and 0.56 for 30-day periods of care for 2020. CMS moves forward with the new HH payment model, the PDGM, already finalized under its 2019 HH rule. The final 2020 HH rule does not make changes in the structure of the PDGM or the 30-day unit of payment, and is effective January 1, 2020.
  • During the transition to PDGM, CMS finalized 60-day episodes spanning the January 1, 2020, implementation date of the PDGM will be paid the CY 2020 national, standardized 60-day episode payment amount of $3,220.79, and will be case-mix adjusted using the CY 2019 case-mix weights as listed in the CY 2019 HH PPS final rule. Additionally, for those 60-day episodes that end after January 1, 2020, but where there is a continued need for HH services, any subsequent periods of care will be paid the CY 2020 national, standardized 30-day period payment amount with the appropriate CY 2020 PDGM case-mix weight applied.
  • CMS finalized that it will vary the LUPA thresholds for each 30-day period of care depending on the PDGM payment group to which it is assigned.
  • The 2020 rural add-on amount will depend on the geographic location of the Home Health Agency (HHA), such as a low population density or high utilization county. CMS continues to use the following schedule for these add-on payments for CYs 2020 – 2022.

HH PPS Rural Add-On Percentages, CYs 2020 – 2022

Category CY 2020 CY 2021 CY 2022
High utilization 0.5% None None
Low population density 3.0% 2.0% 1.0%
All other 2.0% 1.0% None

Source: Medicare and Medicaid Programs; CY 2020 Home Health Prospective Payment System Rate Update; Home Health Value-Based Purchasing Model; Home Health Quality Reporting Requirements; and Home Infusion Therapy Requirements

  • Split percentage payments will be phased out over 2020, with full elimination in 2022. For 2020, CMS will reduce RAP from the current 60/50 percent to 20 percent for existing HHAs. Beginning January 1, 2021, RAP payments would become zero, but all HHA (existing and newly-enrolled) will submit a “no pay” RAP until RAP elimination and the implementation of the Notice of Admission (NOA) policy that begins January 1, 2022. The no-pay RAP will have less required information and mirror the forthcoming NOA. RAPs would be completely eliminated when the NOA takes effect in 2022.

Behavioral adjustment in transition to PDGM

While CMS did not make major changes in the structure of the PDGM or the 30-day unit of payment, which go into effect on January 1, 2020, it did listen to stakeholder feedback on its proposed behavioral adjustment of -8.01. CMS recalibrated its estimate based on a longer amount of time to fully see the impact of these assumed behavioral changes. As a result, CMS finalized a behavioral adjustment of -4.36% for 2020 in order to keep the changes budget neutral. In the final 2019 rule, CMS estimated a behavioral adjustment of -6.42 percent, and in its proposed 2020 HH rule it estimated -8.01%. The finalized -4.36% is substantially lower.

CMS previously cited three underlying assumptions to determine the behavioral adjustment in the final 2019 HH rule. Those assumptions are:

  1. HHAs will change documentation and coding practices and put the highest paying diagnosis code as the principal diagnosis code. This allows a 30-day period of care to be placed into a higher-paying clinical group.
  2. By taking into account additional ICD-10-CM diagnosis codes listed on the HH claim (that exceed the six allowed on the OASIS), more 30-day periods of care will receive a comorbidity adjustment than periods otherwise would have received if CMS had only used the OASIS diagnosis codes for payment.
  3. For one-third of LUPAs that are one to two visits away from the LUPA threshold, HHAs will provide one to two extra visits to receive a full 30-day payment.

Policy changes

  • Therapist assistants. CMS finalized allowing therapist assistants to perform maintenance therapy services under a maintenance program established by a qualified therapist under the HH benefit, if acting within the therapy scope of practice defined by state licensure laws. CMS clarified that this is not limited to physical therapist assistants, but covers all therapist assistants.
  • Home infusion therapy benefit. As mandated under the 21st Century Cures Law (P.L 114-255), CMS provides various changes to the new home infusion therapy benefit, which takes full effect in 2021. For years 2019 and 2020, CMS has a transitional policy in place. That policy includes three payment categories, which will be used to determine the payment rate for home infusion therapy services furnished on the infusion drug administration for each day. CMS will update the temporary transitional payments based on the CPT code payment amounts in the CY 2020 Physician Fee Schedule.

    In order to facilitate the transition coming in 2021, in addition to payment policies, CMS provides other policies that will serve as the basis for determining the scope of the home infusion drugs eligible for coverage of home infusion therapy services, outlining beneficiary qualifications and plan of care requirements, and establishing who can bill for payment under the benefit. Full implementation begins on January 1, 2021.

  • Plan of care changes. CMS finalized Plan of Care (POC) requirements. POCs must be individualized and specify the services necessary to meet the patient-specific needs identified in the comprehensive assessment, the responsible discipline(s), and frequency and duration of all visits, among other items.

Home Health Value-Based Purchasing

The Home Health Value-Based Purchasing Model (HHVBP) is required in nine states: Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee, and Washington. For HHAs in these states, CMS finalized publicly reporting the following two points of data from the final CY 2020 Annual Report on the CMS website:

  • The HHA’s Total Performance Score (TPS) from performance year (PY) five
  • The HHA’s corresponding PY five TPS percentile ranking

CMS indicates this data will be made public after December 1, 2021.

Home Health Quality Reporting Program

CMS finalized changes to the Home Health Quality Reporting Program (HHQRP).

  • Remove the Improvement in Pain Interfering with Activity Measure (NQF #0177) measure for 2022 HHQRP. As such, beginning January 1, 2021, HHAs will no longer be required to submit OASIS Item M1242, Frequency of Pain Interfering with Patient’s Activity or Movement for the purposes of this measure.
  • Adopt two process measures for 2022 under the “Transfer of Health Information” domain: “Transfer of Health Information to Provider—Post-Acute Care” and “Transfer of Health Information to Patient—Post-Acute Care.”
  • Update the Discharge to Community–Post-Acute Care measure to exclude baseline nursing facility (NF) residents. For purposes of this measure, baseline NF residents are those patients who had a long-term stay in the 180 days preceding their hospitalization and HH episode, with no intervening community discharge between the NF stay and qualifying hospitalization.
  • Adopt many of the same standardized patient assessment data elements (SPADEs) that it previously proposed to adopt, along with other SPADEs, beginning with the CY 2022 HH QRP.

CMS did not finalize removing Question 10 from all HHCAHPS surveys related to pain.

How we can help

The changes to HH payment under the PDGM will take effect January 1, 2020. With additional policies finalized under the 2020 HH rule, all HH agencies should be preparing for the future now. CLA can help you understand what these changes mean for your organization as you prepare for a seamless transition into the future of health care.