of the New Final Rule
Effective Date - January 1, 2019
Payments Economic Impact
The following changes will affect home
health Medicare reimbursement:
- 60 Day Episode Payment Update – an increase of
3.77% with all factors for home health agencies that submit Quality Data. The
individual agency affect will depend on the patient mix, and geographic
- Labor Related Share – Shifts to 76.1% from 78.5%, so geographic
location will have less of an effect on
the Medicare payment.
- Non-Labor Related Share – Shifts to 23.9% from 21.5%
- 60 Day Episode Payment With Quality Data
Submitted - $3,154.27
- 60 Day Episode Payment Without Quality Data
Submitted - $3,092.55
- LUPA Rates – Increased 2.16%
- NRS Conversion Factor – Increased 2.2% to $54.20
- Rural Add-on – The Rural Add-on will now
consist of three categories with varying payment percentages.
- High Utilization Rural Area – 1.5% for CY 2019,
.5% for 2020, no add-on for CY 2021, or 2022.
- Low Population Density Rural Area – 4% for CY
2019, 3% for CY 2020, 2% for CY 2021, and 1% for CY 2022.
- All Other Rural Areas – 3% for CY 2019, 2% for
CY 2020, 1% for CY 2021, no add-on for CY 2022.
- Outliers – Fixed Dollar Loss (FDL) Ratio - Shifted to .51 from the previous .55 and a
Loss Sharing Ratio of .80 which did not change.
Driven Grouping Model (PDGM)
Effective Date –Episodes
beginning on or after January 1, 2020.
of the PDGM:
- Eliminates the use of number of therapy visits
to determine payment.
- Uses data from the Medicare cost report to
determine cost of an episode. Many commenters noted that under PPS, home health
agency’s have no incentive to file an accurate cost report. CMS noted that it
is a statutory requirement that home health agency’s sign and certify the
Medicare cost report as accurate. CMS also noted that the Medicare cost report
is used to determine the home health agency market basket, and is used by CMS
to determine the proper payment levels.
- PDGM will have 432 payment groups.
- Outliers – The Fixed Dollar Loss may increase.
- Initial 30-day Episode Payment - $1,753.68 (estimated).
CY 2020 amount to be updated from the initial estimated amount. Includes
Non-Routine Supplies (NRS).
- Episodes Grouping:
- Episode timing (two groups):
Early or Late. Two (2) 30-day
episodes versus the current 60-day episode. The first 30-day episode is early,
all subsequent episodes are late.
- Admission source (two groups):
or Institutional admission source. The admission source classification will be
based on the healthcare setting utilized in the 14 days prior to home health
- Clinical grouping (six groups):
rehabilitation; Neuro/stroke rehabilitation; Wounds; Medication management, Teaching,
and Assessment (MMTA); Behavioral health; or Complex nursing interventions. This will
be determined based the principal diagnosis code reported on the home health
CMS found that the majority of the 30-day periods of care in the
PDGM would likely be classified under the MMTA clinical group. The MMTA is
broken into seven subgroups.
- Functional Impairment level (three groups):
potential functional level groups are Low impairment, Medium impairment, or
High impairment. The functional levels are based on the OASIS items related
to ADL, with the higher the OASIS points, the lower the ADL level, and hence
Low Impairment – patients with a higher functional
level, and lower OASIS points.
- Medium Impairment – patients with a medium
functional level, and medium OASIS points.
- High Impairment – patients with a lower functional
level, and higher OASIS points
- Comorbidity adjustment (two groups):
Based on secondary diagnoses. Includes 13 Low comorbidity
subgroups, and 34 High comorbidity subgroups.
- LUPA – The LUPA threshold will vary
depending on the PDGM payment group assignment. The LUPA threshold will be 2 –
6 visits, based on the tenth percentile value of total visits in the payment
group. The LUPA add-on for the first skilled nursing, physical therapy, or
speech language pathology visit will continue as under HHPPS.
- PEP – The PEP policy will remain the same
as under HHPPS.
Updates in New Law
The related cost will now be recognized
as an allowable administrative expense on the Medicare cost report, if remote
patient monitoring is used by the home health agency to augment the care
CMS defines allowable remote monitoring
as “The collection of physiologic data (for example, ECG, blood pressure,
glucose monitoring) digitally stored and/or transmitted by the patient and/or
caregiver to the home health agency."
Infusion Therapy for Home Health:
This benefit covers the professional services,
including nursing services, patient training and education, and monitoring
services associated with administering infusion drugs by an item of durable
medical equipment (DME) in a patient’s home. The infusion pump and supplies
(including home infusion drugs) will continue to be covered under the DME
Effective Date for Home Infusion Therapy
for Home Health – January 1, 2021.
Transitional Home Infusion Payment – Effective for CY 2019, and CY 2020. CMS has
not been clear as to how this temporary program will affect home health
agencies, and further clarification has been requested.
Suppliers – Existing DME suppliers that enroll in Medicare as pharmacies.
-- Equipment, supplies, and the drug – Paid under the DME benefit.
Services – Training, education, remote monitoring, and monitoring services
provided by a qualified home infusion therapy supplier. Payment is only made
when a skilled professional is physically present in a patient’s home on a day
of drug administration. Payment is equal to four hours of infusion in a
physician’s office. From $141 - $240 based on the CY 2018 fee schedule.
Health Value Based Purchasing – This is a quality
measurement program that CMS designed to improve the quality and delivery of
home health services. This program is currently only being tested in nine (9)
states, (Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North
Carolina, Tennessee, and Washington). The HHVBP has incentives and penalties
based on the quality scores.
- Remove two OASIS based measures
Influenza Immunization received
- Pneumococcal Polysaccharide vaccine ever
Replace the three ADL measures (improvement in
bathing, transfer and ambulation) with two composite measures. Each new composite measure counts for a maximum of 15 points.
- Total Normalized Composite Change in Mobility
these three outcome measures:
- Improvement in Toilet Transferring (M1840)
- Improvement in Bed Transferring (M1850)
- Improvement in Ambulation/Locomotion (M1860)
- Total Normalized Composite Change in Self Care
Uses these six outcomes measures:
in Grooming (M1800)
in Upper Body Dressing (M1810)
- Improvement in Lower Body Dressing (M1820)
in Bathing (M1830)
in Toileting Hygiene (M1845)
in eating (M1870)
Changes apply to performance year 2019 & 2020 for
payment years 2021 & 2022.
Health Quality Reporting Program (HHQRP) – HHQRP is a quality
measuring program that requires all Medicare certified home health agencies to
submit quality data to CMS. Failure to file the data results in a 2% reduction
in the episode payments.