CMS Releases 2022 Final Home Health Rule

  • Regulations
  • 12/1/2021

Key insights

  • The rule provides a net 2.6% market-basket update.
  • CMS finalizes that the Home Health Value-Based Purchasing model will expand to all U.S. states. CY 2022 will be a “pre-implementation” year with CY 2023 the first performance year.
  • CMS makes several measure changes under the quality reporting program.
  • The rule includes various provisions and updates for Home Health CoPs and service rates.

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The Centers for Medicare and Medicaid Services (CMS) released the final Home Health Prospective Payment System (HH PPS) rule. The changes take effect January 1, 2022.

Payment updates

Market-basket update — CMS finalizes an update of 3.1%, which is reduced by the required productivity adjustment of 0.5% resulting in a final update of 2.6% for calendar year (CY) 2022.

Wage index — CMS finalizes continuing to use the pre-floor, pre-reclassified hospital inpatient wage index with no 5.0% cap on wage index decreases as the wage adjustment to the labor portion of the HH PPS rates. For CY 2022, the updated wage data are for the hospital cost reporting periods beginning on or after October 1, 2017 and before October 1, 2018 (FY 2018 cost report data).

Low utilization payment adjustment (LUPA) thresholds — CMS maintains the LUPA thresholds for CY 2022.

Functional impairment levels update — For CY 2022, CMS updates the functional points and functional impairment levels by clinical group. The updated Outcome and Assessment Information Set (OASIS) functional points table and the table of functional impairment levels by clinical group for CY 2022 are located in Tables 2 and 3 of the final rule.

Comorbidity adjustments — CMS finalizes multiple changes to the low and high comorbidity adjustments based on CY 2020 home health claims data with linked OASIS data (as of July 12, 2021), stakeholder feedback and review.

PDGM case-mix weights — CMS finalizes recalibrating case-mix weights using CY 2020 home health claims data with linked OASIS data (as of July 12, 2021). Review the full list of recalibrated weights in Table 15 of the final rule.

Budget neutrality factor — CMS finalizes that these case-mix weight changes will be implemented in a budget-neutral manner by applying a case-mix budget-neutrality factor to the CY 2022 national, standardized 30-day period payment rate. That factor for CY 2022 is 1.0396.

The national standardized payment amounts are listed in the table below.

CY 2022 National, Standardized 30-Day Period Payment Amount
CY 2021 National Standardized 30-Day Period Payment Case-Mix Weights Recalibration Neutrality Factor Wage Index Budget Neutrality Factor CY 2022 HH Payment Update CY 2022 National Standardized 30-Day Period Payment
$1,901.12 1.0396 1.0019 1.026 $2,031.64

Occupational therapy add-on factor — CMS finalizes it will utilize the physical therapy LUPA add-on factor as a proxy until CY 2022 data is available to establish a more accurate occupational therapy add-on factor for the LUPA add-on payment amounts.

Outlier payments fixed-dollar loss (FDL) ratio — CMS finalizes its FDL ratio based on the estimate that outlier payments will constitute approximately 1.8% of total HH PPS payments in CY 2022. CMS simulations show that the FDL ratio needs to be lowered from 0.56 to 0.40 to pay up to, but no more than, 2.5% of total payments as outlier payments in CY 2022.

Home Health Value-Based Purchasing (HHVBP) model

CMS finalizes that the HHVBP model will expand to all U.S. states. Though originally proposing a January 1, 2022, start date, after consideration of the comments received, CMS finalizes that CY 2022 will be a “pre-implementation” year, with CY 2023 as the first performance year and CY 2025 as the first payment year. The expansion applies to all Medicare-certified Home Health Agencies (HHAs) in the 50 U.S. states, District of Columbia, and the territories. HHAs are required to compete in the expanded model. Participation will be based on CMS Certification Numbers (CCNs), which means that total performance scores and payment adjustment will be calculated based on an HHA’s CCN.

CMS finalizes using a national, volume-based cohort in setting payment adjustments under the expanded model and finalizes definitions of smaller-volume cohort and larger-volume cohort. Consistent with the original HHVBP model, CMS will assess whether an HHA qualifies for the smaller-volume cohort based on the volume of unique patients eligible to submit the HHCAHPS survey in the prior calendar year. Based on the HHA’s performance, CMS will use a maximum payment adjustment of 5%. CMS finalizes that the baseline year used will be CY 2019 (January 1, 2019 through December 31, 2019).

Total performance scores (TPS) and payments will be based on the quality measure set for the applicable performance year. The performance scoring methodology will be used to determine an annual distribution of value-based payment adjustments among HHAs in a cohort so that HHAs achieving the highest performance scores will receive the largest upward payment adjustment.

Measure Measure Weighting
OASIS measures 35%
TNC self-care
TNC mobility
Oral medications
Dyspnea
Discharged to community
Claims measures 35%
ACH
ED use
HHCAHPS survey measure components 30%
HHCAHPS professional care
HHCAHPS communication
HHCAHPS team discussion
HHCAHPS overall rating
HHCAHPS willingness to recommend

The measure set includes the following 12 measures: five OASIS-based measures; two claims-based measures; and five survey-based measures. See table above. There are two composite measures in the OASIS measures: total normalized composite (TNC) self-care and TNC mobility. The two claims-based measures are acute care hospitalizations (ACH) and emergency department (ED) use without hospitalization.

These are three primary features of the scoring and measures:

  1. An HHA’s TPS will reflect all the claims-based and OASIS-based measures for which the HHA meets the minimum of 20 home health episodes of care per year and all the individual components that compose an HHCAHPS survey measure for which the HHA meets the minimum of 40 HHCAHPS surveys received in the performance year.
  2. An HHA’s TPS will be determined by weighting and summing the higher of that HHA’s achievement or improvement score for each applicable measure.
  3. The claims-based, OASIS assessment-based, and the HHCAHPS survey-based measure categories are weighted at 35%, 35%, and 30%, respectively, and account for 100% of the TPS. (Missing measures are reweighted.)

Each competing HHA will receive an interim assessment on a quarterly basis and a final feedback report. CMS anticipates other learning assistance to be provided as well.

Finally, CMS indicates public reporting will begin with the CY 2023 performance year/CY 2025 payment adjustment. CMS anticipates this information would be made available to the public on a CMS website on or after December 1, 2024.

Home Health Quality Reporting Program (HH QRP)

CMS finalizes removing Drug Education on All Medications Provided to Patient/Caregiver measure beginning with CY 2023. HHAs will no longer be required to submit OASIS Item M2016, Patient/Caregiver Drug Education Intervention beginning January 1, 2023.

CMS finalizes replacing two measures with one measure and will remove the Acute Care Hospital During the First 60 Days of Home Health (NQF #0171) measure and the Emergency Department Use Without Hospitalization During the First 60 Days of Home Health (NQF #0173) measures and replace them with the Home Health Within Stay Potentially Preventable Hospitalization measure beginning with the CY 2023 HH QRP.

CMS finalizes that HHAs will collect data on the Transfer of Health (TOH) Information to Provider Post-Acute Care measure, the TOC Information to Patient-PAC measure, and certain standardized patient assessment data elements beginning January 1, 2023. HHAs will begin collecting data on the two TOH measures beginning with discharges and transfers on January 1, 2023 on the OASIS–E. HHAs will collect data on the six categories of Standardized Patient Assessment Data Elements on the OASIS–E, with the start of care, resumption of care, and discharges (except for the hearing, vision, race, and ethnicity Standardized Patient Assessment Data Elements, which would be collected at the start of care only) beginning on January 1, 2023.

Miscellaneous provisions

Home health Conditions of Participations (CoPs) changes

CMS makes two changes to home health CoPs:

  1. Supervision of aides
    CMS finalizes that one virtual supervisory visit per patient per 60-day episode is allowable. This visit must only be done in rare instances for circumstances outside the HHA’s control and must have documentation in the medical record detailing such circumstances. It would apply only to non-skilled patients. Also, CMS finalizes that the semi-annual onsite visit must be conducted on ‘‘each’’ patient the aide is providing services to rather than ‘‘a’’ patient. Lastly, CMS finalizes the assessment of deficient skills as proposed.
  2. Occupational therapists (OT)
    Under the Consolidated Appropriations Act, 2021, CMS is required to and finalizes permitting OTs to conduct the initial assessment visit and complete the comprehensive assessment, but only when occupational therapy is on the home health plan of care with either physical therapy or speech therapy and skilled nursing services are not initially on the plan of care.

Home infusion therapy service rates

CMS finalizes unadjusted CY 2021 rates will be updated for CY 2022 using the 5.4 percentage increase in the CPI–U for the 12-month period ending June 2021 reduced by the productivity adjustment of 0.3 percentage point. This results in a 5.1% increase.

Nursing home modifications to COVID-19 deaths, vaccinations, and related reporting requirements

CMS is slightly modifying the requirement for nursing homes to report on various COVID-19 metrics. Those modifications are: 1) Reporting frequency of the information will be weekly unless the Secretary specifies a lesser frequency; 2) Reporting data elements are unchanged, but may be reduced, contingent on the state of the pandemic and at the discretion of the Secretary; and 3) A sunset date of December 31, 2024 for all reporting requirements, with the exclusion of the requirement of COVID vaccination status of staff and residents. Review Table 37 in the final rule to see data elements and end dates.

Hospice programs survey and enforcement requirements

CMS finalizes various updates for hospice programs related to accrediting organizations, surveyor training and qualifications, conflicts of interest, consistency of surveys, and enforcement remedies — including additional remedies to encourage poor-performing hospice programs to come into substantial compliance with CMS requirements before CMS is forced to terminate the hospice program’s provider agreement, civil monetary penalties in certain instances of noncompliance, and directed plans of correction, among other policies.

Inpatient rehabilitation facilities (IRFs) reporting

CMS finalizes a requirement for IRFs to begin collecting the TOH Information to Provider-PAC measure, the TOH Information to the Patient-PAC measure, and on the six categories of Standardized Patient Assessment Data Elements on the IRF–PAI V4.0, beginning with admissions and discharges (except for the hearing, vision, race, and ethnicity Standardized Patient Assessment Data Elements, which would be collected at admission only) on October 1, 2022.

Long-term care hospitals (LTCHs) reporting

CMS finalizes for LTCHs to begin collecting the TOH Information to Provider-PAC measure, the TOH Information to the Patient-PAC measure, and on the six categories of standardized patient assessment data elements on the LCDS V5.0, beginning with admissions and discharges (except for the hearing, vision, race, and ethnicity Standardized Patient Assessment Data Elements, which would be collected at admission only) on October 1, 2022.

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