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CMS released the proposed calendar year 2021 home health prospective payment system rule, which impacts home health agencies. Learn more about the key payment and policy updates.

Regulations

CMS Releases Proposed 2021 Home Health Rule

  • Jennifer Boese
  • 7/15/2020

Key insights

  • CMS released a relatively light rule this year due to COVID-19 and the novelty of PDGM.
  • There are no major changes to payments and CMS proposes a 2.7% market basket increase.
  • CMS proposes permanently extending certain telecommunications system flexibilities in effect due to the pandemic.
  • CLA can provide more information on how your home health agency is impacted under the proposed rule.

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The Centers for Medicare and Medicaid Services (CMS) released the proposed calendar year (CY) 2021 home health prospective payment system rule (CMS-1730-P). Comments may be submitted through August 31, 2020. 

Table of Contents

I.  Payment updates
II. Policy changes

Payment updates

Market basket update

CMS proposes a 2.7% market basket update and projects this to result in an overall increase of $540 million to home health payments in CY 2021.

Low Utilization Payment Adjustment (LUPA)

CMS would maintain the current LUPA thresholds for CY 2021 payment, since there is not enough data to update under the new PDGM model.

Case-mix weights

CMS proposes to proceed with the current case-mix weights for CY 2021, since there is not enough data to update those related to PDGM.

Wage-index update

CMS looks to adopt the revised Office of Management and Budget (OMB) statistical area delineations from OMB Bulletin No. 18-041 for the labor market delineations used in the home health wage index, effective beginning in CY 2021. CMS also proposes to cap any wage index decrease in excess of 5% for one year. [CMS has made this proposal across its other annual updates, such as the inpatient prospective payment system rule.]

Standard 30-day period payment

CMS does not make any behavioral adjustments or changes due to the newness of the PDGM and the ongoing COVID-19 pandemic. The national standardized amount for CY 2021 is $1,911.87.

CY 2020 30-day
budget neutral
standard amount
Wage index
budget
neutrality
factor
CY 2021 HH
payment
update
CY 2021 national,
standardized 30-day
period payment
$1,864.03 X 0.9987 X 1.027 $1,911.87

Source: CMS https://www.federalregister.gov/d/2020-13792/p-101

LUPA payments

CMS provides a look at standard rates with the 2.7% update.

HH discipline CY 2020 per-visit
payment
Wage index
budget neutrality
factor
CY 2021
HH
payment
update
CY 2021 per-visit payment
Home health aide $67.78 X 0.9988 X 1.027 $69.53
Medical social services $239.92 X 0.9988 X 1.027 $246.10
Occupational therapy $164.74 X 0.9988 X 1.027 $168.98
Physical therapy $163.61 X 0.9988 X 1.027 $167.83
Skilled nursing $149.68 X 0.9988 X 1.027 $153.54
Speech-language pathology $177.84 X 0.9988 X 1.027 $182.42

Source: CMS https://www.federalregister.gov/d/2020-13792/p-111

Outlier payments

CMS proposes no change to the fixed-dollar loss ratio and maintains 0.63 as finalized for CY 2020.

Policy changes

Telehealth/virtual health

CMS proposes permanently implementing several flexibilities that took effect under the COVID-19 Interim Final Rule (85 FR 1920). [For additional information on this rule, read CLA’s Health Care Innovation and Insight blog post.]

Those flexibilities include telecommunications such as telehealth or remote monitoring, as long as they are included on the home health plan of care. A description of how the technology will help to achieve the goals outlined on the plan of care without substituting for an in-person visit as ordered on the plan of care would be required. While not separately reimbursed, CMS also proposes a broader use of telecommunications technology to be reported as an allowable administrative cost on the home health agency cost report.

Home infusion therapy services and suppliers

CMS spends considerable time reviewing the statutory and regulatory history of this benefit along with policies and payments finalized in previous rules. This goes into full effect in January 2021. CMS proposes Medicare enrollment policies for qualified home infusion therapy suppliers.

Home health quality reporting program

CMS makes no changes. 

How we can help

We are on the front lines of regulatory, policy, and payment changes for providers across the continuum, which includes home health agencies. If you would like more information on how your home health agency is impacted under the proposed CY 2021 rule, or would like other information related to your home health agency, we can provide guidance to meet your specific needs.

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