The Centers for Medicare and Medicaid Service (CMS) released the CY2018 Medicare Home Health payment rule last week. Detail of the proposed rule can be found here. The 2018 proposed changes to home health prospective payment rates are the typical changes that have been occurring for the last few years.

The home health Market Basket Index inflation update for 2018 is preset at 1% along with the suspension of the annual Productivity Adjustment.  The 1% update is offset with the 0.97% case mix creep adjustment that was promised last year. Due to comments in the proposed rule, there is an expectation that additional adjustments due to case mix creep will occur in 2019.  The proposed base episode rate for 2018 is set at $3,038.43 while the 2017 base rate is $2,989.97.  The base rate is only the beginning of the adjustments. CMS proposes a recalibration of the case mix weights again in 2018.  The LUPA rates will increase 1% because the case mix creep adjustment does not affect the LUPA rates.  Non-routine medical supply rates are also adjusted by 1%.

With respect to outlier payments, CMS proposes to keep the same 80% loss ratio that has been in use since the beginning of HHPPS and maintain the Fixed Dollar Loss Ratio at 0.55. The 3% Rural Add-On is not included in the 2018 proposed rule.  It is set to expire at the end on 2017 and there is current legislation pending to extend it for five more years.  The proposed rule includes a continuance of the 2% rate reduction for HHAs that fail to comply with the quality data submission requirements surrounding OASIS and HHCAHPS.

Value Based Purchasing (VBP) UPDATE

  • Home Health Care Consumer Assessment of Healthcare Providers and System (HHCAHPS) Surveys – proposing to change the required number of completed surveys returned in order to calculate a performance score. If finalized, this proposed change will be applied to the FIRST performance year (2016) before it is finalized in the Fall/Winter 2017.
  • Proposing to remove the OASIS-based measure – Drug Education on All Medications Provided to Patient/Caregiver during All Episodes of Care. If finalized this measure will be removed beginning with performance year 3 (2018).
  • Quality Measures for future consideration of proposal….NOT officially being proposed in this rule –
    • Total Change in ADL/IADL Performance by HHA Patients – this measure would report the average, normalized, total improved functioning across the 11 ADL/IADL item on the current OASIS-C2. The patient’s discharge score would be subtracted from the Start of Care (SOC)/Resumption of Care (ROC) score and then divided by the maximum improvement value based the number of response options for that item.  All eligible episodes would be considered including episodes where the patient WAS INDEPENDENT at the SOC/ROC.
    • Composite Functional Decline Measure – this measure would report the percentage of episodes where there was a decline on one or more of the 8 ADL items used in the measure.
    • Behavioral Health Measures –
      • HHA Correctly Identifies Patient’s Need for Mental or Behavioral Health Supervision – using multiple factors including items from Neuro/Emotional/Behavioral Status OASIS-C2 items.
      • Caregiver Can/Does Provide for Patient’s Mental or Behavioral Health Supervision Need – using multiple factors including items from Neuro/Emotional/Behavioral Status OASIS-C2 items.

Home Health Care Quality Reporting Program (HH QRP) UPDATE

  • Seeking public comment on which social risk factors might be most appropriate for reporting stratified measure scores and potential risk adjustment of a particular measure. Examples: dual eligible/low-income subsidy, race and ethnicity and geographic area of residence.
  • Proposed Data Elements for removal from OASIS – we are proposing to remove 247 data elements from 35 OASIS items collected at specific time points. These elements are not used in the calculation of quality measures nor are they used for payment, survey, VBP or care planning.
  • There are multiple changes to HH QRP proposed for implementation in years 2019/2020. Further analysis of this proposed rule will be conducted and shared over the next couple of weeks.

CMS did include the Home Health Groupings Model (HHGM) in the proposed rule seeking comment for its implementation January 2019.  Under HHGM, the 60-day episode of care will be replaced with a 30-day period of payment and patients are placed into one of 144 payment groups.

The structure of determining the payment grouping is as follows:

  • Admission Source & Timing (Claims) – (Community Early, Community Late, Institutional Early or Institutional Late)
    • Admission Source will be Community or Institutional – depending on the healthcare setting utilized in the 14 days prior to home health (inpatient acute care hospitalization, skilled nursing facilities, inpatient rehabilitation facility or long term care hospital)
    • Only the first 30-day period will be considered Early and all others late. Similar to the current PPS model, the payment period could only be considered Early if great than 60 days has passed since the end of a previous period of care.
  • Clinical Grouping (Principal Diagnosis) – (Medication Management Teaching & Assessment (MMTA), Neuro Rehab, Wounds, Complex Nursing Interventions, Musculoskeletal (MS) Rehab, Behavioral Health)
    • The principal diagnosis will be utilized in establishing which of the 6 clinical groups listed above that the patient will be grouped into.
    • Proposed Rule includes that if the principal/primary diagnosis submitted on a claim is considered a “questionable encounter” the claim will be returned for more definitive coding.
  • Functional Level (OASIS Items) – (Low, Medium, High)
    • Anticipates roughly 33% of periods of care will fall into each of the categories.
    • M1800-M1860 and M1032 are OASIS-C2 Items proposed for use in determining Functional Level under HHGM.
  • Comorbidity Adjustment (Secondary Diagnoses) – (No or Yes)
    • The 30-day period will receive a comorbidity adjustment if any diagnosis listed on the claim are included on a list of comorbidities provided in the proposed rule.
    • Exclusions:
      • If the same first 3 digits of an ICD-10 secondary diagnosis is the same as the first 3 digits of the primary diagnosis that that secondary would not be considered for comorbidity adjustment
      • If the code reflects unspecified site or side and the code allows for specificity then the unspecified code will not be considered for comorbidity adjustment
      • Some secondary diagnoses that are support for Z codes will not be considered

The OASIS-C2 requirements will not change under HHGM.  The comprehensive assessment will still be required to be complete within 5 days of the Start of Care (SOC) and in the last 5 days of a 60-day period for recertification as is required currently.

Low Utilization Payment Adjustments (LUPA) will exist in the HHGM.  All 144 HHGM Groupings has a level of visits that must be reached or that 30-day period of care will be paid per visit under the LUPA.  The groupings’ level of visits range is 2-7.   The LUPA Add-On will remain with the Add-On applying in one period of care only cases or an initial period of care in a sequence where the initial period of care was a SOC and first in a series of adjacent periods.

Partial Episode Payment Adjustments (PEP) will exist in the HHGM.  It is being proposed that the PEP adjustment remain as it currently is applied in the PPS today.

Outliers will exist in the HHGM.  It is being proposed that the current (updated 1/1/17) methodology for calculating Outlier payments would remain as it is under HHGM.

This proposed rule includes that under HHGM the Case-Mix Group would be determined based on the Four steps above, but then the average resource use for each case-mix group will dictate the case-mix weight.  Resource use would be determined by an estimate of cost of visits recorded on the home health claim plus the cost of Non-routine Supplies (NRS) recorded on the claims.  The cost is generated by taking the NRS charges on the claim and converting them to cost, based on the cost to charge ratio that is SPECIFIC to EACH HHA.  For agencies not historically reporting NRS on claims and cost reports a state-level mean is used for non-hospital based and a nation-wide mean for all hospital based HHAs.

The proposed rule states that the base rate used for the HHGM groups will be using the 2018 base rate and then adding back the $53.03 NRS conversion factor and dividing by 2.  This would be $1,545.73 if being implemented for 2018.

The proposed rule is NOT proposing a change to RAPs and Finals still being billed, however there would be a RAP and a Final for EVERY 30-day payment period.  CMS is requesting comments on whether the RAP is still needed in the 30-day payment period structure, comments on a phase out of the RAP payments eventually and comments on whether or not a Notice of Admission would be needed if the RAP is eventually phased out!

This proposed rule is voluminous and carries an immense number of proposed changes.  HPS will continue analyzing and updating on the proposed elements of this rule.  On August 17, 2018, we will be hosting an HPS Alliance Members Webinar specific to the 2018 Home Health Proposed Rule which will include a Q&A session. The State of Home Health PPS Workshop in Nashville, TN on August 22, 2018, which will also include highlights of this proposed rule.