As if the changes in the payment system were not enough. Based on the 2019 Medicare Home Health Final Rule, released in early November 2018, 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 percentages for CYs 2019 through 2022 vary based on the county’s category classification.

High utilization counties (top quartile of utilization on average)

These counties will receive:
1.5% add‐on in 2019
0.5% add‐on in 2020

Low Population Density HHAs (counties with 6 or fewer people per square mile)

These counties will receive:
4% add‐on in 2019
3% add‐on in 2020
2% add‐on in 2021
1% add‐on in 2022

All other rural areas

These counties will receive:
3% add‐on in 2019
2% add‐on in 2020
1% add‐on in 2021

According to Change Request 10782 that was recommunicated on November 15, 2018, agencies will now report Value Code 85 on claim with the Federal Information Processing Standards (FIPS) State and County Code of the place of residence where the home health service is delivered. The FIPS code will be the avenue of triggering the specific county where services are rendered and enable the agency to receive the appropriate percentage increase in the base rate, when applicable.

The Rural Add-On, technically expired 12/31/17, but was reinstated in April 2018. The changes that go into effect 1/1/19 will begin the process of weeding out the add-on completely. Agencies must take this time to evaluate the financial impact of these reductions and plan of the ones that will take place year after year.

HPS will continue to bring you more analysis of the 2019 Home Health Final Rule.