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Proposed Home Health Grouper Model (HHGM) Impact on Medicare Payment

The annual proposed rule for updates to the home health Medicare prospective payment rate (PPS) is now open for comment through September 25, 2017.  As site visitors, you may hear about this proposed rule, and some facts may be helpful.  The scope of this proposed rule is broad, and the following information is limited to the HHGM or Home Health Grouper Model proposed to impact payment in a phase in the year of 2019 and full adoption in 2020.

The proposed rule is the first significant change to payment for Medicare home health in 20 years.  Expect to hear a great deal about this change between now and the publication of the final rule expected by November 1, 2017.   The clamor from home health providers is to have CMS withdraw the proposed rule and actively engage with the industry in redesigning payment.  The “bottom line” is the proposed financial impact on Medicare payment. 

The motivation for this action is to align home health payments more closely to patient needs and to protect access to care for vulnerable populations. The HHGM proposed payment would fundamentally change how home health providers are paid for care, and in turn likely how they deliver the care you now review. 

Facts about the HHGM payment model:

  • The current PPS payment directly reimburses agencies for the number of PT, OT or SLT visits made to the patient.  The original function of this element of payment was to incentivize the use of the therapies to improve the functional status of the home health patient to remain in the home as long as safely possible.  The HHGM would end this additional payment for therapy. PT, OT, and SLT would continue as covered services in the home, but no boost in payment would occur as it does now when such services are provided.
  • The lump sum for reimbursement would be based on patient and case characteristics:
    • Admission source – was patient admitted from an acute care hospital, a SNF or IRF or LTACH, or from the community.  Higher payment would be made for patient admitted from a hospital versus the community; the next higher level of payment would be made for patients admitted to home care from a SNF, IRF or LTAH; and the lowest level of payment for those patients admitted from the community such as a home care referral from a doctor’s office.
    • Episode timing – More payment is provided for an initial episode versus a second or third episode as most resources are expected to be used in the initial episode.
    • Clinical grouping – based on the patient’s primary ICD 10-CM diagnosis and the primary reason for home care.  The more serious the diagnosis (e.g. diabetes not controlled with foot ulcer) and reason for care (stasis ulcer care) being paid more as the resources needed to manage the care are assumed to be greater than a diagnosis of heart failure and the primary reason for care as medication teaching.
    • Functional level-degree of dependence in ADLs, and IADLs.
    • Presence of active co-morbidities:  E.G. primary of Heart failure, and co-morbidities of diabetes and depression
  • Non-routine supplies (e.g. wound dressings, drainage tubes, etc.) would no longer be reimbursed separately but ‘bundled’ in the lump sum payment.
  • Home health episodes would no longer be 60 days, but 30 days with the option to recertify for additional 30 day periods with the physician’s orders and evidence of the patient continuing to meet home health benefit criteria and medical necessity.  Currently, patients are admitted for 60 day periods before new orders are needed. 

The HHGM model is not budget neutral as proposed, and the expected change in revenue varies from a low of 4.5% to a high of 15% in 2020 - the proposed first full year of payment under the HHGMs.  

Comments are accepted through September 25th, 2017.