The Centers for Medicare and Medicaid Service (CMS) released the CY2019 Medicare Home Health payment rule July 12, 2018. The 2019 proposed changes to home health prospective payment rates are the typical changes that have been occurring for the last few years.

The proposed base episode rate for 2019 is set at $3,151.22 and there is an overall increase of 2.1% expected in reimbursement. The base rate is only the beginning of the adjustments. CMS proposes a recalibration of the case-mix weights again in 2019. The LUPA rates will increase again. 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 change the Fixed Dollar Loss Ratio to 0.51.

The Rural Add-On is being completely revised. The new rural add-on policy requires CMS to classify rural counties into one of three categories based on: 1) high home health utilization, 2) low population density and 3) all others. Rural add-on payments for CYs 2019 through 2022 vary based on counties’ category classification. – Low Population Density HHAs (counties with 6 or fewer people per square mile) – 4% add‐on in 2019, 3% add‐on in 2020, 2% add‐on in 2021, 1% add‐on in 2021 – High utilization counties (top quartile of utilization on average) – 1.5% add‐on in 2019, .5% add‐on in 2020 – All other rural areas (All MA rural counties) – 3% add‐on in 2019, 2% add‐on in 2020, 1% add‐on in 2021.

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 will be outlined in a future HPS Blog and on the HPS Alliance Members ONLY Webinar.

CMS did include the Patient-Driven Groupings Model (PDGM) in the proposed rule seeking comment for its implementation January 2020. Under PDGM, the 60-day episode of care will be will continue for certification, but there will be two 30-day periods for payment and patients are placed into one of 216 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-D Items proposed for use in determining Functional Level under PDGM.
  • Comorbidity Adjustment (Secondary Diagnoses) – (None, Low or High)
    • The 30-day period will receive a comorbidity adjustment if any diagnosis listed on the claim is included on a list of comorbidities provided in the proposed rule.
    • Exclusions:
      • 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-D (effective 1/1/19) requirements will not change under PDGM. 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 PDGM. All 216 PDGM 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 2-6. 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 PDGM. It is being proposed that the PEP adjustment remain as it currently is applied in the PPS today.

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

This proposed rule includes that under PDGM 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.

The proposed rule states that the base rate used for the PDGM will be $1,753.68.

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 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!

It’s crucial for agencies to get ahead of the curve for success under PDGM. Don’t get left behind!

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