Home health gets pay boost in rule stressing value over volume
Behavioral adjustment decreases result in a 4.36% payment cut to home health, says Partnership for Quality Home Healthcare.
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One of the payment rules released by the Centers for Medicare and Medicaid Services late Tuesday includes finalization of the 2022 Home Health Prospective Payment System rate update and the Home Health Value-Based Purchasing Model expansion.
Under the rule, Medicare home health payment rates for 2022 would increase in the aggregate by $570 million, or 3.2%, CMS said. The $570 million increase in estimated payments reflects the effects of the 2022 home health payment update percentage of 2.6%, a $465 million increase; an estimated 0.7% increase that reflects the effects of the updated fixed-dollar loss ratio ($125 million increase); and an estimated 0.1% decrease in payments due to the changes in the rural add-on percentages, a $20 million decrease.
The Home Health Prospective Payment System is based on the latest hospital wage data collected under the Hospital Inpatient Prospective Payment System to apply the wage index to the labor share to account for differing wage levels in areas in which home health services are rendered.
WHY THIS MATTERS
The Partnership for Quality Home Healthcare cautioned that behavioral adjustment decreases resulting in a 4.36% payment cut to home health in the final rule is not supported by data, despite the Partnership's efforts to present outside data analysis indicating that the behavioral assumption rate cut is unjustified.
However, the Partnership said it appreciated that CMS will consider all alternative approaches as it continues to develop and refine a methodology for annually determining the difference between assumed versus actual behavior changes on estimated aggregate expenditures.
The Partnership said it has already outlined concerns related to CMS' budget neutrality methodology while also highlighting significant increases in labor costs across the home health sector.
A recent labor cost survey of Partnership members conducted by Dobson DaVanzo & Associates in August demonstrates that wages and associated home health industry expenses rose significantly between 2019 and 2021, the Partnership said.
"While we continue to have concerns over the implementation of the behavioral adjustment cuts, the slight uptick in the payment rate for 2022 takes a modest step in recognizing the increased labor costs home health providers are continuing to experience," said Joanne Cunningham, executive director of the Partnership.
VALUE OVER VOLUME
CMS said the final rule would shift from paying for home health services based on volume, to a system that incentivizes value and quality.
The final rule will also strengthen CMS' data collection efforts to identify and address health disparities and use of care among people who are dually eligible for Medicare and Medicaid, people with disabilities, people who identify as LGBTQ+, religious minorities, people who live in rural areas, and people otherwise adversely affected by persistent poverty or inequality, the agency said.
The final rule finalizes nationwide expansion of the Home Health Value-Based Purchasing (HHVBP) Model to incentivize quality of care improvements.
Starting in 2025, CMS will adjust fee-for-service payments to Medicare-certified HHAs based on the quality of care provided to beneficiaries during the 2023 performance year. Throughout 2022, CMS will provide technical assistance to HHAs to ensure they understand how performance will be assessed.
"We support the expansion of the HHVBP Model in today's Final Rule and look forward to being part of this innovative program, which shows significant promise for improving the quality and delivery of home healthcare to older Americans," Cunningham said.
THE LARGER TREND
The Calendar Year 2022 Home Health Prospective Payment System Final Rule addresses challenges facing Medicare beneficiaries who receive health care at home.
The CMS Innovation Center launched the original HHVBP Model on January 1, 2016, to determine whether CMS could improve the quality and delivery of home health care services to people with Medicare by offering financial incentives to providers that offer better quality of care with greater efficiency.
The Third Annual Evaluation Report of participants' performance from 2016-2018 showed an average 4.6% improvement in HHAs' quality scores and an average annual savings of $141 million to Medicare.
The final policies in this rule expand the HHVBP Model nationally, with the first performance year beginning January 1, 2023, CMS said.
ON THE RECORD
"CMS is committed to helping people get the care they need, where they need it," said CMS Administrator Chiquita Brooks-LaSure. "This final rule will improve the delivery of home health services for people with Medicare. It will also improve our data collection efforts, helping us to identify health disparities and advance health equity."
Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com
