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CMS Releases 2020 Medicare Home Health Proposed Payment Rule

Monday, July 15, 2019   (0 Comments)
Posted by: Kyle Simon

Courtesy of the National Association for Home Care & Hospice

The National Association for Home Care & Hospice (NAHC) will host a free webinar on the 2020 Medicare Home Health Proposed Rule this Thursday, July 18, at 2:00 p.m. ET. Instructions to participate in the webinar are below.

Event URL: https://nahc.webex.com/nahc/onstage/g.php?MTID=e035c030b897baf39259316c6f35cc799
Event number: 667 242 301
Event password: 856247
Audio conference: (415) 655-0045
Access code: 667 242 301

Last week, Centers for Medicare & Medicaid Services (CMS) issued the proposed rule for the 2020 payment model, the Patient-Driven Groupings Model (PDGM), including rates of payment that would start January 1, 2020. Per NAHC, the proposed rule still includes a significant “behavioral adjustment”, which amounts to an 8.01% reduction in base payment rates calculated on the assumption that home health agencies will modify service and documentation practices in ways that would increase Medicare spending.

The proposed rule also offers some minor tweaks in the payment model and sets out 2020 payment rates for the first time. In addition, the proposed rule includes unrelated adjustments in other rules affecting home health, including the 2021 home infusion therapy benefit, quality measures and the Home Health Value-Based Purchasing Demonstration (HHVBP) program.

NAHC is working in partnership with Congress to secure sensible payment reforms and to protect the 3.5 million Medicare beneficiaries who receive home health services throughout the country.

Attend this webinar to learn more about the new proposed rule and how it will directly affect your Medicare home health agency. In addition, NAHC President Bill Dombi, Esq., will explain how NAHC is fighting the behavioral assumptions and what you can do to help.

Additional PDGM resources for providers are available here. Mr. Dombi's statement on the proposed rule and a summary of its provisions follow.

NAHC Statement on 2020 Proposed Rule

CMS late today issued the proposed rule for the 2020 payment model, PDGM, including rates of payment that would start January 1, 2020. The new payment model had been finalized in its design in the 2019 rulemaking cycle. The proposed rule offers some minor tweaks in the payment model and sets out 2020 payment rates for the first time. The proposed rule also includes unrelated adjustments in other rules affecting home health, including the 2021 home infusion therapy benefit, quality measures, and the Home Health Value-Based Purchasing Demonstration program.

NAHC remains very concerned that the new model still includes the risks created by a significant “behavioral adjustment” that is based solely on assumptions of clinical and claims-related changes that home health agencies (HHAs) might undertake to offset the payment rule’s impact. That adjustment was suggested as a 6.42% reduction in base payment rates in the 2019 proposed rule. With the 2020 proposed rule, CMS sets out the behavioral adjustment as an 8.01% reduction in base payment rates calculated on the assumption that HHAs will modify service and documentation practices in ways that would increase Medicare spending. The adjustment is ostensibly proposed so that overall budget neutrality in Medicare home health spending is achieved in 2020 by offsetting anticipated spending increases with a rate reduction. NAHC continues to hold that rate reductions based on behavioral changes that have not yet occurred creates significant dangers for home health patients. The risks of disruptions in access to care are compounded by the institution of a dramatically modified payment system model along with an across-the-board rate cut that is based on conjecture.

The Bipartisan Budget Act of 2018 requires that the home health payment model reform be budget neutral. While it permits behavioral adjustment to payment rates, NAHC believes that assumption-based rate calculation should not occur because of the high risks of error and the creation of an incentive to change behavior solely to maintain Medicare revenues. Instead, NAHC supports adjustments only after actual behavioral changes have occurred.

It appears we need the wisdom of Congress to intervene and stop this proposal from becoming reality. NAHC supports sensible payment reform. While the payment model reforms include sensible changes, the behavioral adjustment is neither sensible nor warranted. Thankfully, there is bipartisan, bicameral legislation pending that can fix this serious flaw in the new payment model.

We have long supported rational payment model reforms. While the new model does include some good system refinements, its foundation is severely weakened by the unwarranted and unsupported rate reduction based on nothing but pure assumptions that home health agencies will abuse the payment process.

Congress has limited time to intervene and preserve access to vital home health care. We will be working hard with Congress in the coming weeks to secure sensible payment reforms and to protect the 3.5 million Medicare beneficiaries who receive home health services throughout the country. We are heartened by the widespread support in Congress that recognizes the value of home health services.

2020 Payment Rates

  • The 2020 payment rates increase by 1.5% consistent with the Bipartisan Budget Act of 2018. There is no additional Productivity Adjustment. With the initiation of the new payment model, PDGM, the 1.5% increase shows directly only in the LUPA per visit rates. Otherwise, it is reflected in the new 30-day payment unit rate in contrast to the 60-day episode rate in 2019.
  • Since the 2020 payment model applies to care episodes that begin January 1, 2020 and later, it is necessary that CMS update 2019 payment rates for episodes that begin before January 1 and end after that date. That is because the 2019 payment model uses an “end date” approach to payment. CMS proposes to update the 2019 episodic rates from $3154.27 to $3,221.43. The latest the 60-day episodic payment will cover is an episode ending February 28, 2020 for an episode that began prior to January 1.
  • The per visit rates for Low Utilization Payment Adjustment (LUPA) claims are increased by 1.5% over 2019 rates plus a 1.0065 adjustment to account for wage index budget neutrality.
  • The 2020 rural add-on amount depends on whether the HHA is in a Low Population Density county or a high utilization county as had been the rural add-on design that started in 2019. In 2020, the add-on for frontier counties will decrease from 4% to 3%. The add-on for counties classified as “high utilization” drop from 1.5% to 0.5%; and the remaining counties will drop from 3% to 2%. A phase out will continue in later years.
  • Outlier eligibility will be changed with the Fixed Dollar Loss ratio changing from 0.51% to 0.63%.
  • LUPA moves to the new PDGM standard that ranges from 2-6 visits over 30 days, dependent upon the specific case mix category for the individual patient.
  • CMS proposes to phase out RAP payments over 2020 with elimination of Requests for Anticipated Payment (RAPs) in 2021. In 2020, CMS would reduce the RAP payments from 60/50% to 20% for existing HHAs. New HHAs would get no RAP payment. CMS claims that RAPs create fraud risks.
  • A new Notice of Admission requirement would begin in 2021, requiring electronic reporting of home health admissions within five days. A penalty for late Notice of Admissions (NOAs) would be imposed based on the number of days late in the 30 day period. The penalty may be waived in exceptional circumstances such as fires and floods.

2020 Payment Model

CMS essentially maintains the PDGM that was finalized as a payment model reform in 2019. The Bipartisan Budget Act of 2018 requires that the reformed model start in 2020.

The PDGM includes:

  • 30-day payment unit.
  • Therapy thresholds gone.
  • Case mix adjustment model with 432 categories using measures such as “early” or “late: time period; institutional discharge or community admission; three functional levels; comorbidity adjustment. The final model maintains the six clinical groupings and seven subgroups within the Medication Management Teaching and Assessment (MMTA) clinical group to improve payment accuracy. Note that CMS calibrated the case mix weights using more recent data than used in the 2019 version. As such, the weights for particular categories have changed from what was outlined in the 2019.
  • CMS maintains an assumption-based behavioral adjustment to base rates to account for diagnosis coding and visit volume changes claiming that it has no choice under the law. The 2019 proposed rule included a -6.42% adjustment. The 2020 proposed continues the adjustment framework in assuming that HHAs will modify behavior in terms of:
    1. Diagnosis coding;
    2. Comorbidity reporting; and,
    3. Incidence of LUPAs.
    In the 2020 proposal, CMS utilizes more recent data to calculate a proposed adjustment for 2020 rates of 8.01%.
  • Budget-neutral rate setting except for behavioral adjustment sets 30-day payment unit at a based rate of $1,791.73. In comparison, CMS estimated that if there was no behavioral adjustment to rates under PDGM, the base rate would have been $1,907.11.
  • Bundles payment for both services and non-routine medical supplies.
  • 30-day LUPA ranging from 2-6 visits depending on case mix category.
  • RAPs phased out for HHAs by 2021. RAP payment reduced to 20% for existing HHAs in 2020, eliminated for new HHAs.

The payment model starts with 30-day periods beginning on or after January 1, 2020. Episodes beginning before January 1, 2020 will be paid under 60-day episodic model.

Other Rules

  • A new home infusion therapy benefit created through the 21st Century Cures legislation takes effect in 2021. The proposed rule includes detailed standards on the new benefit. The proposal also clarifies the interrelationship between the home health benefit and the transitional infusion therapy benefit in 2020 and the home infusion therapy benefit beginning in 2021 when infusion therapy can no longer be covered through the home health benefit. NAHC continues to consider this reform as falling far short of what is needed to provide needed home infusion therapy to Medicare patients comparable to what is available to privately insured individuals. However, a remedy for that lies with Congress.
  • Permits therapy assistants to provide maintenance therapy. Currently, only full professional therapists are permitted for coverage purposes.
  • Reduces the Plan of Care (POC) requirements that are considered to be Conditions of Payment, leaving other POC standards to be enforced on as Conditions of Participation.
  • Adds HHVBP Demonstration public reporting requirements.
  • Quality measure refinements.
  • Expands public reporting of patient quality data beginning in 2022.

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