The current case-mix adjusted payments under the Home Health Prospective Payment System (HH PPS) are therapy driven, and beneficiaries with low-income, living in under-served areas have a high severity of illness. Ideally, the Home Health (HH) payment should be determined by the patient characteristics and should equally weigh a non-therapy service.
In the CY 2018 HH PPS rule (82 FR 35270), CMS finalized a new payment system called the Home Health Groupings Model (HHGM) which overhauls the current Medicare Home Health reimbursement system by eliminating the use of therapy service thresholds and concentrating on the clinical characteristics and other patient information. Another major change is refining the unit of payment from a 60-day episode of care to a 30-day episode of care.
While HHGM reflects a change in the case-mix adjustment methodology, the conditions for payment would remain the same for Medicare HH services i.e. there will not be any changes in the Home Health Conditions of Participation (CoPs).
The commercial impact of the Home Health PPS payment rate update is an estimated $80 million in payment for the CY 2018.
The newly proposed rule is targeted to take effect from January 1, 2019.
The drastic impact of the proposed HH PPS case-mix adjustment methodology refinements, including the change in the unit of payment to a 30-day period of care, is an estimated cut of $950 million (~ $1 billion) in payments to HHAs in the CY 2019. This is applicable only if the refinements are implemented in a non-budget neutral manner for a 30-day period of care.
Highlights of HHGM
The HHGM has proposed to implement case-mix methodology refinements with Medicare payments and the highlights include:
- New Admission source category
- Six clinical groups to categorize patients based on the primary reason for Home Health care
- Comorbidity adjustment for secondary diagnosis
- Unit of payment from a 60-day episode of care to a 30-day period of care
- In the episode timing categories – early and late for community and institutional
- Revised functional levels and corresponding OASIS items
- In the Low-Utilization Payment Adjustment (LUPA) threshold
Strengths of HHGM
- Similar to the current payment system, but uses different variables for case mix adjusted payments focusing on the patient rather than therapy services
- Addresses the criticism of calculating the cost for every episode including non-routine supply along with base payment
- Easier to identify the reason for the HH period from the HIPSS code in the claims and easily aligns with OASIS submission
- 30-day reimbursement window cycle will balance out the risk effectively across home care agency
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