Proposed PPS Rule Details New Home Health Payment Model

Home Health Line, July 26, 2017

The rule proposed by CMS updates the home health prospective payment system for home health episodes of care ending on or after January 1, 2018.

In the short term, the Centers for Medicare & Medicaid Services plans to reduce home health agencies’ payments by 0.4% next year. In the long term, CMS plans to drastically redesign the way agencies are paid beginning in 2019.

CMS made these announcements in the 2018 proposed PPS rule for home health, which was posted July 25.

Within the proposed rule CMS announced plans to shift to the Home Health Groupings Model (HHGM) beginning Jan. 1, 2019.

Unlike the current system, the groupings model doesn’t rely on the number of therapy visits performed to influence payment. It instead “relies more heavily on clinical characteristics and other patient information (diagnosis, functional level, comorbid conditions and admission source),” the proposal states.

The groupings model also uses a 30-day period of care—not a 60-day episode. That’s because most 60-day episodes have more visits on average during the first 30 days.

Dividing a single 60-day episode into two periods allows payments to be more accurately apportioned and would have no impact to the OASIS, according to an explanation given by CMS contractor Abt Associates, Cambridge, Mass., during a recent webinar about the model.

“In the HHGM, the HHRG and payment would be determined based on the patient’s admission source (community or institutional), clinical grouping (medication management teaching and assessment/MMTA, neuro/rehab, wounds, complex nursing intervention, MS rehab, behavioral health), functional level (from OASIS) and a comorbidity adjustment (from the patient’s secondary diagnosis),” the rule states.

With HHGM, there would be “changes in the episode timing categories, the addition of an admission source category, the creation of six clinical groups used to categorize patients based on their primary reason for home health care, revised functional levels and corresponding OASIS items, the addition of a comorbidity adjustment, and a proposed change in the Low-Utilization Payment Adjustment (LUPA) threshold.”

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