Situation Report | July 6, 2021
As announced in an HCA alert last week, the U.S. Centers for Medicare and Medicaid Services (CMS) released its proposed Calendar Year (CY) 2022 payment rule for home health.
HCA also finalized a comprehensive memo on the proposal with tables explaining the payment methodology calculations and other major new proposed changes affecting home health delivery and operations.
One big change would expand CMS’s Home Health Value Based Purchasing (HHVBP) demonstration nationwide, beginning with the first performance year in 2022 affecting payments in 2024. The model is already in effect for nine states (New York is not one of them).
The 2022 proposed Medicare home health rates represent a modest market-basket update (1.8 percent), an annual update to the wage index, a proposal to recalibrate the Patient Driven Grouping Model (PDGM) case-mix weights, maintaining the Low Utilization Payment Adjustment (LUPA) threshold amounts, a scheduled phasing-out of the rural add-on, and a continuation of outlier payment standards, with a decreased Fix Dollar Loss (FD) ratio proposed for CY 2022.
CMS also proposes to continue the rural add-on phase-out, where most rural counties in New York will see a 0 percent increase to their rates in CY 2022.
The combination of all these changes is projected to increase Medicare home health services spending nationally by $310 million in CY 2022.
PDGM and Behavioral Assumptions
With the onset of PDGM, beginning on January 1, 2020, CMS made assumptions about anticipated provider behavior changes, prompting a 4.36 percent rate reduction (called a behavioral adjustment) to adjust for these anticipated behaviors.
CMS is not planning to roll-back these 4.36-percent cuts even though evidence suggests that CMS’s assumptions about anticipated provider behavior under PDGM have not borne out. The rule invites comment on CMS’s underlying data findings, and HCA will continue to push vigorously against this flawed cut.
Home Health Conditions of Participation
CMS is also proposing to make permanent some selected blanket regulatory waivers issued during the Public Health Emergency. These relate to home health aide supervision and the use of telecommunication.
The rule also proposes reimbursement changes to reflect new allowances for Occupational Therapists to conduct initial and comprehensive assessments, changes to the quality reporting program and the home-infusion therapy benefit, and other details as outlined in our memo.
Next Steps
Comments on the proposed rule are due by August 27. HCA will submit comments and encourages members to do so as well. CMS customarily finalizes the rule in early November.