September 17, 2018

Medicare Home Health Proposed Rule for Fiscal Year 2019

By Scott Manson, Partner, Advisory Services

Medicare Home Health Proposed Rule for Fiscal Year 2019

On July 12, 2018, the Centers for Medicare and Medicaid Services (CMS) released the fiscal year 2019 proposed rule in the Federal Register. The rule includes proposed payment updates for calendar year 2019, a new proposed payment model for 2020, and other proposed regulatory changes. All items in the proposed rule are subject to change. The Medicare Home Health Final Rule is expected to be published in the Federal Register in late October.

2019 Home Health Reimbursement

The proposed net increase to national home health rates is 2.1% for calendar year 2019. There are also proposed changes to the case-mix payment weights for each specific payment category, applied in a budget-neutral manner. Changes in geographical wage indices will result in different increases or decreases by region. The wage index may have a lower effect in 2019 compared to prior years, due to a proposed change in the labor portion of the rate from 78.5% in 2018 to 76.1% in 2019. There are also proposed changes to the rural add-on. In 2018 the add-on is 3%, and in 2019 the proposed add-on will be 2%, 3%, or 4%. Services provided in counties meeting the definition of frontier status will receive the highest 4% add-on. As in prior years, the reimbursement for home health agencies that do not submit the required quality data will be reduced by 2%. The payment update is expected to result in a net increase in home health reimbursement of $400 million during calendar 2019.

2020 Home Health Reimbursement

CMS is proposing a re-basing of the Medicare home health reimbursement. In the 2018 final rule, CMS proposed changes to Medicare Home Health PPS using the Home Health Groupings Model. In the 2019 proposed rule, CMS is proposing the Patient Driven Groupings Model (PDGM). The PDGM will change the unit of payment from a 60-day episode to a 30-day episode, effective January 1, 2020. The PDGM relies more heavily on patient clinical characteristics and other patient information to determine payment categories. PDGM also eliminates the use of therapy service thresholds which are currently in place. This would remove any financial incentive to overprovide therapy services. Under PDGM, payments are adjusted for patient admissions from institutions, the community, initial episodes, and continuing episodes. There are 216 different payment groups in PDGM. CMS has estimated that PDGM will be budget-neutral with no dollar value impact to home health agencies.

Home Infusion Therapy

A new interim home infusion therapy benefit and payment has been proposed for calendar years 2019 and 2020. By 2021, CMS will develop accreditation procedures for suppliers and a final payment system.

Value-Based Purchasing

CMS is proposing to remove two Outcome and Assessment Information Set (OASIS)-based measures – Influenza Immunization received in the current flu season and Pneumococcal Immunization ever received – from the set of measures. In addition, three other measures are proposed to be replaced with two composite measures, and the weighting of measures changed.

Remote Patient Monitoring

Remote patient monitoring is the collection of physiologic data such as blood pressure, glucose monitoring, etc. digitally stored and transmitted by the patient or caregiver to the home health agency. Under the proposed rule, the costs associated with remote patient monitoring will be an allowable administrative cost on the Medicare cost report. Currently, these costs are reported as non-reimbursable on the cost report.

Certifying and Recertifying Patient Eligibility

CMS is proposing to eliminate the requirement that the certifying physician must estimate how much longer skilled services will be needed as part of the recertification statement. In addition, it is proposed that medical record documentation from the home health agency be allowed as support for certification and recertification, if certain requirements are met.

Quality Reporting

In the final rule, CMS includes updates to the Healthcare Quality Reporting Program (HHQRP), including specific data measures and timeframes.

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Scott  Manson

Scott Manson

Managing Director

  • Advisory
  • Deerfield, IL