Home Health PPS Final Rule for Calendar Year 2019

November 30, 2018

Overview of the New Final Rule

Effective Date - January 1, 2019

Medicare 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 location.
  • 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.

Patient Driven Grouping Model (PDGM)

Effective Date –Episodes beginning on or after January 1, 2020.

Overview 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):
      Community or Institutional admission source. The admission source classification will be based on the healthcare setting utilized in the 14 days prior to home health admission.
    • Clinical grouping (six groups):
      Musculoskeletal 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 claim.
      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):
      The 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 functional level.
      • 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.

Other Updates in New Law

Remote Monitoring
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 planning process.

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."

Home 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 benefit.

Effective Date for Home Infusion Therapy for Home Health – January 1, 2021.

Temporary 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.

  • Eligible Suppliers – Existing DME suppliers that enroll in Medicare as pharmacies.
  • Payment -- Equipment, supplies, and the drug – Paid under the DME benefit.
  • Professional 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.

Home 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 received
  • 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
      Uses 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:
      • Improvement in Grooming (M1800)
      • Improvement in Upper Body Dressing (M1810)
      • Improvement in Lower Body Dressing (M1820)
      • Improvement in Bathing (M1830)
      • Improvement in Toileting Hygiene (M1845)
      • Improvement in eating (M1870)

Changes apply to performance year 2019 & 2020 for payment years 2021 & 2022.

Home 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.

  • 7 measures to be removed from HHQRP for 2021
    • Depression assessment conducted.
    • Diabetic foot care and PT/CG education.
    • Fall risk assessment conducted.
    • Pneumococcal Polysaccharide Vaccine ever received does not fully reflect current ACIP guidelines.
    • Improvement of status of surgical wounds.
    • ED use without hosp. readmission 30 days.
    • Re-hospitalization first 30 days.
  • Recertification – Removed the requirement that requires the certifying physician, as part of the recertification process, to estimate how much longer skilled services will be required.

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