New Payment Changes for Home Health Agencies to Take Effect in 2020

The Centers for Medicare & Medicaid Services (CMS) last October finalized its proposed rule changes to the Home Health Prospective Payment System (HHPPS) in an effort to emphasize individual patient needs over volume of care. The intent of the payment system, known as the Patient Driven Groupings Model (PDGM), is to enable home health agencies to spend less time on administrative duties and more on delivering care. The idea is that when clinicians can deliver more focused care, they can achieve better outcomes. The changes will take effect in early 2020.

“The PDGM removes the current incentive to over-provide therapy, and instead, is designed to reflect CMS’ focus on relying more heavily on clinical characteristics and other patient information to allow payments to more closely reflect patients’ needs,” the federal agency stated in a fact sheet on the rule.

Specifically, the CMS in its finalized changes promotes remote patient monitoring by allowing the costs to be reported to Medicare. This, according to the CMS, will facilitate 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. Other changes involving updating the payment model include:

  • 60-day payment episodes replaced with 30-day periods
  • Therapy visits will no longer be included in determining reimbursement
  • Changes to Low Utilization Payment Adjustments (LUPAs)
  • Adjustments to Home Health Resource Groups from 153 to 432 categories, including updated measurements
  • Implementation of temporary transitional payments for home infusion therapy services for 2019 and 2020.

“Using patient characteristics to place home health periods of care into meaningful payment categories is more consistent with how home health clinicians differentiate between home health patients in order to provide needed services,” according to the CMS. “The improved structure of this case-mix system would move Medicare towards a more value-based payment system that puts the unique care needs of the patient first while also reducing the administrative burden associated with the HHPPS.”

The changes will also eliminate requiring certifying physicians to estimate how much longer skilled services would be needed when recertifying the need for continuing home health care, as this information is already gathered on a patient’s plan of care. This is designed to also reduce the administrative burden involved in home health care.

CMS expects the new payment model, plus changes to meaningful measures, to reduce the burden for home health agencies by approximately $60 million annually as of 2020.

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