CMS Publishes Final Rule for 2017 Medicare Home Health Rates

Yesterday, October 31st, the Centers for Medicare and Medicaid Services (CMS) announced its final rule regarding changes to the Medicare home health prospective payment system (HHPPS) for Calendar Year (CY) 2017. The final rule also includes payment policy provisions, updates to the home health quality reporting program (HHQRP) and proposed changes to the Home Health Value-Based Purchasing (HHVBP) model.

The CMS rule confirms Medicare payments to home health agencies in CY 2017 will be reduced by .70 percent, or $130 million based on the proposed policies. Additional changes include:

  • -.7% overall payment reduction.
  • – .9 estimated decease in home health payments;
  • -2.3rebasing, per visit payment rates, non-routine medical supplies, case-mix, etc.;
  • 5 update percentage;
Further Analysis

While this is an improvement over the proposed 1% reduction, VNAA is discouraged by the continual reduction in home health rates that dramatically impact VNAA member organizations and will result in a reduction of $180 million to Medicare certified home health agencies nationwide in 2017. VNAA’s mission-driven agencies provide high quality care in an efficient, streamlined manner. While CMS maintains that home health margins are high compared to an unspecified standard, the experience of our members is that Medicare payment rates underpay and do not reflect the real costs of serving vulnerable patients and maintaining a qualified, trained workforce.

Additionally, VNAA is concerned that access barriers to home based care will emerge as agencies shutter their doors.  VNAA members believe the illusion of high margins is created by outdated cost reporting regulations that force agencies to understate their costs both by refusing to recognize certain costs (such as telemonitoring) and encumber home health agencies with laborious documentation requirements for justifying costs that are concentrated in vulnerable populations (such as intensive case management, employee security, and patient non-compliance).

Outlier Care

CMS finalized the proposed methodology to calculating payment into 15 minute increments and daily billing caps of no more than 8 hours a day  on outlier care.  Against VNAA objections, CMS attempts to justify this move stating that only approximately 8,300 cases from 2015 would have been impacted by the eight hour cap.

CMS has stated in the final rule that all care can be provided that is necessary, however the higher outlier billing is ends after eight hours or 32 unites of care.

Negative Pressure Wound Therapy

The final rule confirms CMS’ interpretation of how to appropriately bill for negative pressure wound therapy.  The Consolidated Appropriations Act of 2016 requires a separate payment to be made to HHAs for disposable NPWT devices when furnished on or after January 1, 2017 to an individual who receives home health services for which payment is made under the Medicare home health benefit. As described in the Consolidated Appropriations Act of 2016, the separate payment amount for an applicable disposable device will be set equal to the amount of the payment that would otherwise be made under the Medicare Hospital Outpatient Prospective Payment System (OPPS). As there was significant confusion on the appropriate times to bill and under what prospective payment system, CMS has offered examples in the final rule to assist in clarification.

For instance, when a HHA “furnishes NPWT using a disposable device,” the HHA is furnishing an entirely new disposable NPWT device. This means the HHA provider is either initially applying an entirely new disposable NPWT device, or removing a disposable NPWT device and replacing it with an entirely new one. In both cases, all the services associated with NPWT-for example, conducting a wound assessment, changing dressings, and providing instructions for ongoing care-must be reported on TOB 34x with the corresponding CPT® code (that is, CPT code 97607 or 97608); they may not be reported on the home health claim (TOB 32x). The reimbursement for all of these services is included in the OPPS reimbursement amount for those two CPT® codes. Any follow-up visits for wound CMS-1648-F 105 assessment, wound management, and dressing changes where a new disposable NPWT device is not applied must be included on the home health claim (TOB 32x).

Home Health Value Based Purchasing (HHVBP)

CMS also confirmed the following changes and improvements related to the Medicare Home Health Value Based Purchasing Model:

  • Calculate benchmarks and achievement thresholds at the state level rather than the level of the size-cohort and revise the definition for “benchmark” to state that benchmark refers to the mean of the top decile of Medicare-certified HHA performance on the specified quality measure during the baseline period calculated for each state;
  • Require a minimum of eight HHAs in a size-cohort;
  • Increase the timeframe for submitting New Measure data from seven calendar days to fifteen calendar days following the end of each reporting period to account for weekends and holidays;
  • Remove four measures (Care Management: Types and Sources of Assistance, Prior Functioning ADL/IADL, Influenza Vaccine Data Collection Period, and Reason Pneumococcal Vaccine Not Received) from the set of applicable measures;
  • Adjust the reporting period and submission date for the Influenza Vaccination Coverage for Home Health Personnel measure from a quarterly submission to an annual submission; and
  • Add an appeals process that includes the existing recalculation process and adds a reconsideration process.

Home Health Value Based Purchasing (HHVBP)

CMS also confirmed the following changes and improvements related to the Medicare Home Health Value Based Purchasing Model:

  • Calculate benchmarks and achievement thresholds at the state level rather than the level of the size-cohort and revise the definition for “benchmark” to state that benchmark refers to the mean of the top decile of Medicare-certified HHA performance on the specified quality measure during the baseline period calculated for each state;
  • Require a minimum of eight HHAs in a size-cohort;
  • Increase the timeframe for submitting New Measure data from seven calendar days to fifteen calendar days following the end of each reporting period to account for weekends and holidays;
  • Remove four measures (Care Management: Types and Sources of Assistance, Prior Functioning ADL/IADL, Influenza Vaccine Data Collection Period, and Reason Pneumococcal Vaccine Not Received) from the set of applicable measures;
  • Adjust the reporting period and submission date for the Influenza Vaccination Coverage for Home Health Personnel measure from a quarterly submission to an annual submission; and
  • Add an appeals process that includes the existing recalculation process and adds a reconsideration process.

Home Health Quality Reporting Program (HHQRP)

In the final rule, CMS has adopted four measures starting in CY 2017 to determine payment for CY 2018. This is being done to meet the requirements of the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014. Three of these measures are resource-based and calculated using Medicare claims. The fourth measure is assessment-based and is calculated using Outcome and Assessment Information Set (OASIS) data. The final measures are as follows:

  • All-condition risk-adjusted potentially preventable hospital readmission rates,
  • Total estimated Medicare spending per beneficiary,
  • Discharge to the community, and
  • Medication reconciliation.

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