The Definitive Blog

CMS Proposes Change in HHA Reimbursements

Earlier this summer, CMS proposed payment updates for various sites of care. One of the most dramatic proposals will affect the home health agency prospective payment system (HHA-PPS).
One of the primary differences in the payment update emphasizes a shift away from using therapy services as a replacement for patient acuity. HHAs will now be receiving reimbursements based on patient information and clinical metrics.

Also included in the proposed changes is an adjusted payment policy. Beginning in 2018, a 1 percent payment increase will go into effect. However, if individual HHAs fail to report all the required data to CMS, their reimbursements will be reduced by 2 percent. Overall, CMS estimates that these payment alterations will result in a net spending reduction of about -0.4 percent, or around $80 million. CMS will also be retiring its 3 percent payment add-on for rural home health services on December 31, 2017.

In addition to preparing for these coming changes, many HHAs are still in the process of complying with CMS emergency preparedness guidelines. Finalized in Sept 2016, the rule mandates an all-hazards emergency plan for providers across 17 care settings. The plan must include policy and procedures as well as a communication strategy that adheres to state and federal laws. Providers have until Nov 15 to implement the proper training programs and drills related to the new regulations.

For some HHAs, the costs will be greater in implementing these changes. Some states have emergency preparedness mandates in place already, and HHAs in these areas should already be in accordance with most of the CMS guidelines. In the southeast, which, as we have seen, can be ravaged by hurricanes, there are statewide practices in place for emergency situations. Their implementation costs will likely be lower, and program deployment will not be so time-consuming.

CMS has announced new HHA regulations for 2019 and 2020 as well. In 2019, CMS will be instituting an alternative case-mix methodology titled the Home Health Groupings Model (HHGM). The HHGM, unlike its predecessors, will use 30-day periods instead of 60-day episodes to assess patient care. It will also rely on clinical data and patient information—such as primary diagnosis, comorbidities, and referrals—to place patients into the most appropriate payment categories.

For the 2020 calendar year, CMS proposed the adoption of an HH quality reporting program (QRP). This new QRP will determine reimbursements based on three measures, meeting the requirements of the IMPACT Act and standardized industry data. These measures will be: changes in skin integrity post-acute care (i.e. pressure ulcers), percent of residents experiencing one or more falls with major injury, and percent of long-term care hospital patients with admission and discharge functional assessments and care plans.

The IMPACT Act (2014) was intended to improve Medicare’s post-acute care services at LTC hospitals, SNFs, HHAs, and inpatient rehabilitation facilities through reporting standardized data regarding quality measures, resource use, and more. To ease providers’ reporting burdens, CMS proposed the modification of OASIS factors.

Top Home Health Associations by Recertifications

HHA Name Recertifications Total Patient Revenue (M)
VNS of NY Home Care CHHA (Manhattan) 12,521 $301.7
Sta Home HHA of Carthage INC 9,206 $18.8
Sta Home HHA of Greenwood 9,043 $19.2
Sta Home HHA of Jackson INC 7,655 $24.8
Alacare Home Health and Hospice 7,066 $43.1
Great Lakes Caring Jackson 6,314 $55.9
United Home Care INC 6,173 $21.4
North Mississippi Medical Center HHA 5,861
Mississippi Home Care of Jackson 5,423 $24.9
Partners Healthcare at Home – Home Care 4,971 $120.5

Fig 1 Data from Definitive Healthcare based on most recent available data

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Definitive Healthcare has the most up-to-date, comprehensive and integrated data on nearly 9,000 hospitals, more than 1 million physicians, and other healthcare providers. Our database tracks quality and financial metrics on nearly care centers across the U.S., including over 19,000 home health associations, and  more than 19,000 SNFs.

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