CMS proposes changes in Medicare home health programs

On June 27, 2016, the Centers for Medicare and Medicaid Services (CMS) proposed changes to the Medicare home health prospective payment system (HH-PPS), the home health quality reporting program (HH-QRP), and the home health value-based purchasing program (HH-VBP).   The net effect of the proposed changes on home health agencies in 2017 would be to reduce aggregate Medicare payments on behalf of 3.4 million Medicare beneficiaries to 11,400 HHAs by about $180 million, about one percent of Medicare HHA expenditures.


The proposed changes to the HH-PPS would include re-basing adjustments and case-mix adjustments to the 60 day episode rate as well as changes in the methodology for calculating outlier payments.


The proposed changes to the HH-QRP would include new performance measures related to preventable hospital re-admissions, discharges to the community, controlling total Medicare spending per beneficiary, and medication reconciliation.


The proposed changes to the HH-VBP would include new payments adjustments (up or down) that will be made beginning in 2018 based on each home health agency’s VBP performance scores.  The new adjustments will be up to +/- 3 percent in 2018, gradually increasing to +/- 8 percent in 2022.  A nine state HH-VBP pilot is now underway in Massachusetts, North Carolina, Florida, Arizona, Maryland, Iowa, Nebraska, Tennessee, and Washington State.  The overall economic impact of the HH-VBP for 2018-2022 is an estimated $378 million in savings from reductions in unnecessary hospitalizations and nursing facility admissions as a result of home health quality and performance improvements. 


The proposed rules are scheduled to be published for public comment in the Federal Register on July 5, 2016.  Additional information on the proposed rules is available here