Home Health Payment Innovation Act of 2019 Set to Improve Revisions to Medicare Reforms

Last year Congress passed a number of reforms to the Medicare Home Health benefit under the Bipartisan Budget Act of 2018 including requiring that the new Medicare payment system, the Patient-Driven Groupings Model (PDGM), be implemented in a “budget neutral manner.” The idea behind this reform is to ensure that future spending remains in line with projections of current spending levels. 

Legislation under the Home Health Payment Innovation Act of 2019 (S. 433/H.R. 2573) would prohibit Medicare home health payment rates from being modified based on assumptions of inappropriate case mix changes that could occur under the new PDGM payment system. Payment modifications with the passing of S.433/H.R. 2573 would be made instead based only on actual experience and data generated after PDGM is implemented in 2020. In addition, the legislation would limit payment increases or decreases to no more than two percent per year, with any greater modification being phased in over a number of years. 

Why was this legislation introduced? According to the National Association for Home Care & Hospice (NAHC), under the new payment system the Centers for Medicare & Medicaid Services (CMS) is planning to base “behavior-based rate-reductions to take effect in 2020 on the assumptions that providers will up-code and add additional visits to Low Utilization Payment Adjustment (LUPA) cases to obtain the full episodic payment.” It is notable that these projections, says NAHC, “significantly differ from their 2017 assumptions in the Home Health Groupings Model (HHGM). Furthermore, in their finalized rule for the Skilled Nursing Facilities payment rule, CMS states that they did ‘not have any basis on which to assume the approximate nature or magnitude of these behavioral responses.’ It is wildly inconsistent for assumptions to be made about one provider type, but not another.” 

S.433/H.R. 2573 seeks to remedy these inconsistencies, cites the NAHC, by removing the ability to adjust rates based on assumptions, but rather in response to observed evidence of behavioral changes. 

The new legislation would also waive homebound rules for services provided to individuals enrolled in Medicare-shared savings programs, such as Accountable Care Organizations (ACOs), as well as for beneficiaries enrolled in the Medicare Advantage program. Under the proposal, homebound rules would continue to apply for services provided to Medicare fee-for-service enrollees.

Manchester Specialty Programs specializes in providing comprehensive business insurance solutions for Home Health Care, Allied Health Care and Human/Social Services organizations. We will continue to keep you informed on PDGM and its impact on home health care providers. For more information about how we can help you protect your insureds, please contact us at 855.972.9399.