CHA News

CHA Issues Summary of Home Health Prospective Payment System Final Rule

For home health agency staff, directors of reimbursement

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CHA has issued a summary, prepared by Health Policy Alternatives, of the final rule for the home health agency prospective payment system for calendar year (CY) 2020. The final rule’s provisions are effective Jan. 1, 2020.

In the final rule, CMS finalizes implementation of the Patient-Driven Groupings Model (PDGM), which includes a revised case-mix methodology and a 30-day unit of payment; makes changes to the quality reporting program; and updates the Home Health Value-Based Purchasing  Program, a test program being conducted in nine states (not including California).

Notably, CMS modifies its calculation of the payment rates, specifically the impact of the behavioral changes that CMS believes will occur following implementation of PDGM. CMS also  finalizes its three assumptions related to clinical group coding, comorbidity coding, and the low utilization payment adjustment, which result in an overall anticipated impact of minus 8.39%. However, after review of comments from stakeholders, including CHA, CMS reconsiders the frequency and impact of these changes in the first year of implementation and determines it is reasonable to apply the reduction to only half of the 30-day episodes. The resulting final behavior change assumption adjustment for CY 2020 is minus 4.36 percent. 

CMS also updates policies associated with home infusion therapy and solicits comments on criteria for coverage of drugs under durable medical equipment local coverage determination L33794, which triggers beneficiary eligibility for home infusion therapy. 

Overall, CMS estimates that overall Medicare payments will increase by 1.3%, or $250 million, as compared to CY 2019, based on a final payment update factor of 1.5% adjusted by a 0.2 percent aggregate decrease due to changes in the rural add-on percentages. 

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