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July 5, 2018

Medicare's revamp of home health payments could be 'most significant change' in decades

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    CMS on Monday released a proposed rule that would change the way Medicare reimburses home health agencies, Modern Healthcare reports.

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    Proposed rule details

    CMS said the proposed rule includes "significant changes to the Home Health Prospective Payment System" that are intended "to strengthen and modernize Medicare, drive value, and focus on individual patient needs rather than volume of care." In particular, the agency said it is proposing changes that aim "to improve access to solutions via remote patient monitoring technology, and to update the payment model for home health care."

    Under the proposed rule, CMS said it would allow home health agencies to report the cost of remote patient monitoring—which, according to Modern Healthcare, involves using digital tools to remotely collect patient data such as an individual's blood pressure, blood sugar level, heart rate, and weight—"as allowable costs on the Medicare cost report form." CMS said the proposed change would help to "foster the adoption of emerging technologies by home health agencies and result in more effective care planning, as data is shared among patients, their caregivers, and their providers." In addition, CMS said the proposed change will help further the Trump administration's MyHealthEData initiative.

    The proposed rule beginning Jan. 1, 2020, also would implement a new payment model for home health payments, called the Patient-Driven Groupings Model (PDGM), as required under a federal spending bill enacted earlier this year. According to CMS, Medicare currently pays home health agencies for 60-day episodes of care, and payments are based on the number of services provided to beneficiaries.

    Under the new model, CMS no longer would determine home health reimbursements based on the number of services provided to beneficiaries. In addition, CMS under PDGM would base home health reimbursements on 30-day episodes of care.

    CMS said the new payment model would advance Medicare more toward a value-based system that focuses on beneficiaries' unique care needs, while also reducing administrative burdens associated with the current model. To further scale back administrative burdens, CMS proposed eliminating a requirement that physicians estimate the amount of time they believe beneficiaries will need home health services, because those estimates already are available on beneficiaries' care plans. In addition, CMS proposed changes to certain quality measures under the Home Health Quality Reporting Program in accordance with the administration's Meaningful Measures initiative, as well as changes to certain quality measures under the Home Health Value-Based Purchasing Model.

    CMS in the proposed rule also detailed how Medicare would implement temporary transitional payments for home infusion therapy beginning Jan. 1, 2019, as required under a federal spending bill enacted earlier this year. The proposed rule also seeks public input on "the new home infusion therapy benefit category and proposes standards for home infusion therapy suppliers and accrediting organizations of these suppliers as required by the 21st Century Cures Act."

    CMS in a fact sheet estimated that overall payments to home health agencies in calendar year 2019 would increase by 2.1%, or about $400 million, based on the policies included in the proposed rule. The agency is accepting comments on the proposed rule through Aug. 31.


    CMS Administrator Seema Verma said the changes included in the proposed rule "would give doctors more time to spend with their patients, allow home health agencies to leverage innovation, and drive better results for patients." She added, "The redesign of the home health payment system encourages value over volume and removes incentives to provide unnecessary care."

    William Dombi, president of the National Association for Home Care & Hospice, said the proposed rule does not appear to go far enough to replace Medicare's current payment system for home health care agencies. He said, "Many of the same weaknesses present in [the current model] exist in this new version."

    Still, Dombi said the proposed rule "represent[s] some of the most significant change in the home health payment system in nearly 20 years." He added that his group "will be addressing all of [its] concerns with CMS through the rule making process and enlisting congressional support as needed to develop a reasonable payment reform" (Dickson, Modern Healthcare, 7/2; Sweeney, FierceHealthcare, 7/2; Slabodkin, Health Data Management, 7/3; Holly, Home Health Care News, 7/2; CMS release, 7/2; CMS fact sheet, 7/2).

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