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CLIENT ALERT: CMS Issues the Home Health Final Rule for CY 2020

Tiffany Karlin

February 03, 2020

On October 31, 2019, Medicare released the Final Rule for 2020 which updates the home health prospective payment system payment rates and wage index for CY 2020. The final rule implements the Patient-Driven Groupings Model (PDGM) effective 1/1/2020. The final rule included other rule changes as well, including modifications to the payment regulations pertaining to the content of the home health plan of care. We have summarized the changes below.

Click here to download the final rule.


  • PDGM starts on cert periods beginning 1/1/2020 or later
  • PDGM is a revised case-mix methodology with 432 categories using measures such as early or late timing, institutional discharge or community admission, 3 functional levels; comorbidity adjustment. The final model maintains the 6 clinical groupings and 7 subgroups within the MMTA clinical group to improve payment accuracy
  • Removal of therapy thresholds for payment
  • Changes the unit of payment from 60-day episodes to 30-day periods of care
  • The final CY 2020 30-day payment amount has been updated to $1,864.03 (for those HHAs that report the required quality data) which is an increase from the proposed rule released in July. As a result of the implementation, CMS anticipates that providers will modify service and documentation practices in ways that would increase Medicare spending, therefore they have included a “behavioral adjustment” that amounts to a 4.36% reduction
  • Allows therapy assistants to now furnish maintenance therapy
  • Bundles payment for both services and non-routine medical supplies
  • 30-day LUPA ranging from 2-6 visits depending on case mix category
  • Home health agencies certified for participation in the Medicare effective on or after January 1, 2019 will not receive split-percentage payments beginning in CY 2020, but are still required to submit a “no pay” RAP at the beginning of a period of care
  • Reduced up-front amount paid on RAP to 20% and elimination of RAP entirely in 2022
  • Notice of admission starting 2021 and provider penalty for failure to submit within 5 calendar days of the start of care

Additional Rule Changes:

  • Plan of care (POC) requirements that are considered to be Conditions of Payment are being reduced, leaving other POC standards
  • For the Home Health Value-Based Purchasing (HHVBP) model, public reporting of the total point score (TPS) and the TPS Percentile Ranking from the PY 5 (CY 2020) Annual TPS and Payment Adjustment Report for each HHA in the nine Model states that qualified for a payment adjustment for CY 2020 has been finalized
  • Two proposed Transfer of Information quality measures and numerous standardized patient assessment data elements (SPADEs) have been finalized in the rule. Agencies will begin collecting the items in 2021 for the 2022 home health quality reporting program (HHQRP). CMS commented that they plan to release a draft of the revised OASIS to implement the new assessment items by early 2020
  • Effective 2021 is the permanent home infusion therapy benefit created through the 21st Century Cares legislation. The final rule contains payment categories, amounts and required options adjustments

So how might the PDGM rules affect your HHA?

Your agency will have an influx of claims and payments that you will need to be prepared to handle. If claims are sent with errors, such as improper condition codes or invalid primary diagnosis codes, then you will be facing a large amount of claim denials and rejections that will require your billing team to be on top of in order to prevent cash flow problems. Your agency needs to be prepared to receive and post more payments in smaller amounts. Now is a good time to evaluate if your agency needs to add billing staff or considering outsourcing in order to manage this influx.

Furthermore, diagnosis coding will be ever so important and you should ensure that your coding team understands completely that the primary diagnosis code needs to be specific enough to meet the code list requirements that group patients into “Clinical Groupings”.  In addition, they need to code all comorbidities/secondary diagnosis codes that are pertinent to the patient care. Consider providing additional training to your current coding team or seek a coding service who can quickly meet your needs.

Finally, your agency should be evaluating your current therapy service practice and determine how to effectively provide therapy for patients to maintain quality outcomes while containing costs. Utilizing therapy assistants may be beneficial and we recommend working with a therapy consultant who can provide guidance on how to achieve this.

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