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March 27, 2018

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CMS Will Not Implement Home Health Groupings Model

November 30, 2017:

In its final rule on the home health prospective payment system, the Centers for Medicare and Medicaid Services declined to finalize implementation of the Home Health Groupings Model (HHGM). The agency’s decision not to move ahead with the model for 2019 implementation was in reaction to more than 1,000 comments on the proposed rule, many of them criticisms.

The model would have placed patients into payment categories based on their diagnosis, comorbid conditions, functional level, admission source and timing. The current system categorizes patients by diagnoses, OASIS items, number of therapy visits, and sequence of first, second, or third sequential 60-day episode without a 60-day gap in service. It also would have changed the payment episode periods to 30-day episodes rather than the current 60-day episodes, without altering the 60-day episode period for the purposes of care planning.

The 30-day unit of payment triggered the most comments because of concerns about its potential hit to provider revenue. Although CMS determined that payment of $1,722.29 per 30-day period would have a budget neutral effect, it lowered this amount to just $1,622.61 because of anticipated provider reaction to the payment change. While CMS does not condone or support provider practices focused on maximizing revenue, based on experience and data it is assumed that providers would alter their coding to bump patients into higher-paying case-mix groups to maximize revenue. It also anticipated that home health agencies would provide an extra visit for patients falling a visit short of the five-visit case-mix group threshold so that they would not be subject to the low-utilization payment adjustment (LUPA).

Under the model, payment for episodes with higher utilization of skilled-nursing and home health aide for patients with complex conditions was expected to increase while overall payment for home health services would have fallen more than 4 percent. Providers balked at the cut, saying that home health care providers would have to shut down, restricting access to services for many of the most needy beneficiaries.

Overall home health payment rate updates resulting from the calendar year 2018 update will have an estimated impact of reducing payments to home health agencies by $80 million. Since 2012, CMS has steadily been reducing home health episodic payment rates to account for elevations in case mix not resulting from actual change in patient condition.

CMS notes that commenters agreed that changes do need to be made to the way home health services are paid. It plans on addressing the concerns of all stakeholders to come up with a better solution but offers no timeline.

The home health payment final rule can be accessed online at https://www.gpo.gov/fdsys/pkg/FR-2017-11-07/pdf/2017-23935.pdf.


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