CMS Releases Final Home Health Rule, Adds Discharge Planning Proposal

CMS published the Final Rule for Medicare Home Health PPS and VBP for CY 2016 to its website yesterday.  The official notice will be published in the Federal Register on November 5.

CMS also announced a “Discharge Planning Proposed Rule,” that is estimated to cost home health agencies nationwide about $283 million. The proposal, which the Home Care Alliance will fully analyze, will revise discharge planning processes for hospitals, long-term care hospitals, inpatient rehabilitation facilities, and critical access hospitals in addition to home health.

In terms of changes made to the Home Health Final Rule, CMS pulled back slightly regarding both payment and in the Value Based Purchasing Program. Below is an analysis from HCA staff:

Value Based Purchasing:

The final rule makes minor changes to the VBP system from the proposed rule.  The same nine states (including MA) are selected, with all agencies in the state included in the VBP system.  VBP will begin January 1, 2016, with a 2015 baseline year on performance, with all agencies within each selected state competing against each other for payment adjustments tied to quality performance measures.

CMS made a small concession to industry concerns that the proposed risk corridor was too broad, and reduced the maximum payment reduction in the first year of the VBP from the proposed 5 percent to 3 percent. The payment adjustments will be increased incrementally over the course of the model with: 

  • a maximum payment adjustment of  3-percent (upward or downward) in 2018,
  • a maximum payment adjustment of 5-percent (upward or downward) in 2019,
  • a maximum payment adjustment of 6-percent (upward or downward) in 2020,
  • a maximum payment adjustment of 7-percent (upward or downward) in2021, and
  • a maximum payment adjustment of 8-percent (upward or downward) in 2022.

CMS dropped 4 process measures and 1 of the new reporting measures. The final set of 24 measures includes 10 outcome measures, 6 process measures, 5 HHCAHPS, and 3 New Measures.

Outcome Measures

  • Improvement in Pain Interfering with Activity-M1242
  • Improvement in Dyspnea- M1400
  • Improvement in Bathing-M1830
  • Improvement in Bed Transferring-M1850
  • Improvement in Ambulation-Locomotion M1860
  • Prior Functioning ADL/IADL-M1900
  • Improvement in Management of Oral Medications-M2020
  • Discharged to Community-M2420
  • Acute Care Hospitalization: Unplanned Hospitalization during first 60 days of Home Health- (Claims)
  • Emergency Department Use without Hospitalization- (Claims)

Process Measures

  • Influenza Vaccine Data Collection Period: Does this episode of care include any dates on or between October 1 and March 31?-M1041
  • Influenza Immunization Received for Current Flu Season-M1046
  • Pneumococcal Polysaccharide Vaccine Ever Received-M1051
  • Reason Pneumococcal vaccine not received-M1056
  • Drug Education on All Medications Provided to Patient/Caregiver during all Episodes of Care-M2015
  • Care Management: Types and Sources of Assistance-M2102

Home Health CAHPS: Satisfaction Survey Measures

  • Care of Patients
  • Communications between Providers and Patients
  • Specific Care Issues
  • Overall rating of home health care
  • Willingness to recommend the agency

New Measures

  • Influenza Vaccination Coverage for Home Health Care Personnel
  • Herpes zoster (Shingles) vaccination: Has the patient ever received the shingles vaccination?
  • Advance Care Plan

CMS has modified the reporting of the New Measures; HHAs will be required to begin reporting data (through a web portal) no later than October 7, 2016, for the period July, 2016, through September, 2016, and quarterly thereafter. As a result, the first quarterly performance report in July, 2016, will not account for any of the New Measures.

CY2016 PPS Rates

Case Mix Weights:  CMS made additional minor changes to the case mix weights based on additional analysis.

Case Mix Adjustment:  In a slight concession to industry comments, CMS is phasing in their proposed 2.88% case mix adjustment over three years instead of the two years they initially proposed.  So the final rule decreases the national, standardized 60-day episode payment amount by 0.97% each year in CY 2016, CY 2017, and CY 2018, instead of 1.44% for just 2016 and 2017. 

Market Basket Update:  The final CY 2016 home health market basket (2.3 percent) combined with the multifactor productivity adjustment (0.4 percentage points) results in a 1.9 percent home health payment update percentage.

Wage Index:  CMS made additional small adjustments to the Wage Index because they used an updated database of hospital wage data.  The final wage index is slightly lower than the proposed index for every geographic region in MA except Berkshire County.

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Advocacy Alert: Urge your US Rep to Support HHPPS Proposed Rule Letter

With another $350 million cut to Medicare home health payment and Massachusetts selected as one of nine states for a “Value-Based Purchasing” Pilot, it is important that a strong message is sent to CMS and that means getting strong support from our state’s Congressional Delegation.

A new message is posted on the Home Care Alliance’s Advocacy Center that you can easily send to your federal elected representative to gain support for a Congressional sign-on letter to CMS. Just fill out the contact information, hit “send” at the bottom of the page, and the message will automatically go to your member of Congress.

The letter, which can be seen below, voices concern about the burdensome payment reductions and severe Value-Based Purchasing penalty in CMS’ proposed rule. Home health care champion Congressman Jim McGovern is co-leading the effort – known as a “dear colleague” letter in Congress – and the Alliance continues to appreciate his ongoing support of our issues.

Here is the text of the letter:

The Honorable Andy Slavitt
Acting Administrator
Centers for Medicare and Medicaid Services
7500 Security Boulevard
Baltimore, Maryland 21244-1850

Dear Acting Administrator Slavitt:

We are writing today to express our concern with Medicare home health funding cuts set forth in the Home Health Prospective Payment System (HHPPS) proposed rule for 2016. Home healthcare is a vital service that allows millions of the most vulnerable senior citizens and disabled individuals to receive the treatment they need in the cost-effective environment they most prefer – their home. As a result, we request a careful reconsideration of two of the draft policy changes in light of their anticipated impact on homebound Medicare beneficiaries and the home health delivery system upon which they depend.

First, we are concerned with the draft HHPPS rule’s proposal to cut home health payment rates by an additional 1.72 percent in 2016 and again in 2017. This proposed “case mix” reduction is of concern because it appears to be based on a 2000-2010 case mix weight change analysis rather than changes in the condition of beneficiaries during the 2012 to 2014 period that Medicare proposes to address.

Second, the draft rule proposes a Home Health Value-Based Purchasing (HHVBP) program that would impose an incentive/penalty range of as much as 5 to 8 percent over a 5-year period. We are very concerned with the aggressive nature in which the Secretary intends to ramp up HHVBP. Implementing a VBP program with a 5 percent withhold that increases to 8 percent just three years later is too much too fast. We are also concerned that the Secretary is proposing 25 measures for use in the HHVBP— far too many for providers to focus on.

In closing, we wish to express our concern that, in its current form, the draft rule may drive Medicare reimbursement to unsustainable levels for thousands of small, rural and other home health providers across the country, impacting the care upon which many of the most vulnerable Medicare beneficiaries, as well as their communities, depend. As a result, we request that the Agency reconsider its proposed case mix cut until it evaluates the specific causes of case mix weight changes from 2012 to 2014 and consider a more reasonable implementation schedule for the proposed withhold amount in the HHVBP program.

We thank you for your attention to this critical matter.

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CMS Announces Proposed Home Health PPS Update for 2016; Massachusetts Included in Value-Based Pilot

Massachusetts is one of nine states randomly assigned to pilot the Home Health Value-Based Purchasing (VBP) model, which is included in the calendar year 2016 Medicare Home Health PPS Rule released by CMS.

VBP will test whether incentives for better care can improve outcomes in the delivery of home health services.  The model will apply a payment reduction or increase to current Medicare-certified home health agency payments, depending on quality performance, for ALL agencies delivering services within the nine selected states.  Payment adjustments will be applied on an annual basis, beginning at five percent and increasing to eight percent in later years of the initiative.

According to CMS, the model is designed so there is no selection bias, participant states are representative of home health agencies nationally, and there is sufficient participation to generate meaningful results among all Medicare-certified home health agencies nationally.

The proposed rule implements the third year of the four year phase-in of the rebasing adjustments to the HH PPS required by the Affordable Care Act.  The CY 2016 downward adjustment to the national standard episode rate is $80.95.  CMS also proposes to recalibrate the HH PPS case-mix weights for CY 2016, which would be the second year of recalibration and identical to CY 2015.

In addition, the proposed rule includes a decrease to the national, standardized 60-day episode payment amount by 1.72 percent in each of CY 2016 and CY 2017 to account for nominal case-mix coding intensity growth unrelated to changes in patient acuity between CY 2012 and CY 2014.  CMS will also be updating the HH PPS payment rates by the home health payment update percentage, 2.3 percent in CY 2016.

For the Home Health Quality Reporting Program, in keeping with the requirements of the Improving Medicare Post-Acute Care Transformation Act of 2014 (the IMPACT Act), CMS is proposing one standardized cross-setting measure for CY 2016 under the skin integrity and changes to skin integrity domain.  Measures for the IMPACT Act’s other domains will be addressed through future rule-making, although CMS is seeking feedback on four future, cross-setting measure constructs to potentially meet requirements of the IMPACT Act.

In order for home health agencies to avoid a two percent reduction in their annual HH payment update percentage, the rule further proposes to require all home health agencies to submit both admission and discharge OASIS assessments for a minimum of 70 percent of all patients with episodes of care occurring during the reporting period starting July 1, 2015.  CMS proposes to incrementally increase this compliance threshold by ten percent in each of the subsequent periods (July 1, 2016 and July 1, 2017) to reach 90 percent.

CMS has prepared a fact sheet about the proposed rule and a press release about the Home Health Value-Based Purchasing model.  The proposed rule will be officially published in the Federal Register on July 10, 2015. CMS will accept comments on the proposed rule, including comments about the Home Health Value-Based Purchasing model, until September 4, 2015.

The Alliance will closely examine the Value-Based Purchasing proposal — as well as all other aspects of the proposed rule — and will present a briefing for members within the next weeks.

We will work with the state associations in the other states chosen for the pilot to advocate for any needed changes to the program to protect agency cash flow and operational integrity.  We will also develop educational sessions for our members over the next months.  Stay tuned!

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