HCA Comments on Home Health Rule, PDGM

Situation Report | August 24, 2020

HCA Vice President for Finance and Management Patrick Conole will be sending comments later today to the U.S. Centers for Medicare and Medicaid Services (CMS) on its proposed 2021 payment rule for home health. Members can read our comments here.

The proposed rule includes updates on a mix of longstanding payment-related programs and structures, but, due to the COVID-19 pandemic, left the existing 2020 Patient-Driven Groupings Model (PDGM) intact.

CMS is expected to finalize the rule, following the comment period, in late October, with the rule going into effect on January 1, 2021.

PDGM Maintaining the Behavioral Adjustment

Our comments lead by addressing the most prominent part of the proposed rule: PDGM. Top among our concerns is CMS’s decision to maintain the -4.36 percent “behavioral adjustment” cut. The assumed behavioral assumptions are troubling in several ways.

We are concerned that it will effectively establish an invitation to game the system by assuming agencies will behave in a certain way and, thus, codify that assumption in the payment system itself.

Further, we find the methodology, assumptions, analytic documentation, and underlying data supporting these behavioral assumptions troubling, especially considering CMS did not apply the same type of adjustment to the PDGM methodology for the nursing home industry.

We also maintain that the behavioral adjustment for the clinical group coding and the Low Utilization Payment Adjustment (LUPA) avoidance are unrealistically high, especially as agencies are dealing with the COVID-19 pandemic.

RAP Proposal

HCA also strongly rejects CMS’s proposal on Requests for Anticipated Payments (RAPs), which would require agencies to submit no-pay RAPs in CY 2021 and a Notice of Admission (NOA) form in CY 2022, along with payment penalties if providers do not submit within five days of admission. RAPs are vital to an agency’s cash-flow in order to initiate services, especially given upfront documentation burdens that otherwise constrain timely reimbursement.

CMS should withdraw its RAP proposal, which was ostensibly advanced for fraud-detection reasons, and instead focus on other indicators of fraud such as “anomalous volume and timing changes that may be a ‘red flag’ of abusive behavior” using predictive analytics and other more surgical approaches, we argue.

Longstanding Issues

HCA also addresses longstanding concerns about the following: The face-to-face (F2F) requirement, left unchanged in this proposed rule; the inadequacy and inconsistencies of the wage index classifications (which do not adequately reflect market conditions in many locales); the need for extension and refinements to the rural add-on tiers; the bundling of non-routine supplies (NRS) in the PDGM 30-day payment unit; CMS’s decision to not pay for telehealth services in lieu of an in-person visit; beneficiary access and provider payment issues with the new home infusion therapy program beginning in January 1, 2021; and other items.

PDGM and More at HCA’s Senior Financial Managers (Virtual) Conference: September 15-16

HCA’s upcoming Senior Financial Managers Retreat is a signature finance program for CHHAs, LHCSAs, hospice and MLTC. While the retreat was originally planned for the Mohonk Mountain Resort in New Paltz, New York, it will be a virtual event this year.

Included in this year’s program are two sessions on PDGM. The first of these sessions, on day one, will be conducted by BlackTree Health Consultants and focus on optimizing revenues under PDGM. Then, on day two, Chris Attaya, from Strategic Healthcare Programs, will provide many key benchmarks and trends from the first six months of PGDM in 2020, which agencies can use to track performance.

HCA members can expect a detailed brochure on this exciting program soon!