2016 Home Health Proposed Rule – Summarized

August 4, 2015

Ok guys – there’s a new Proposed Rule for Home Health for 2016. We have read through all 236 pages of this proposed rule and have cut it down to several smaller, digestible nuggets for you. Here we go…

PPS / Payment Adjustments

Case-mix points are being re-calibrated again using 2014 cost report data. 39 clinical variables and 7 functional variables show reduced or omitted points, 23 clinical variables and 4 functional variables show increased or added points. The clinical and functional thresholds show adjustments as well with a decrease in the number of points to go from C1 to C2 in the 14-19 therapy visits group and from F1 to F2 in the functional scores for 3+ episodes with 1-13 therapy visits. However, there is a proposed increase in the number of points to get from F1-F2 in the 14-19 therapy visit early episodes and from F2-F3 in the 20+ therapy visits all episodes.

There are also some proposed adjustments in the PPS episode payment amount. The national, standardized 60-day episode payment amount for 2015 was $2,961.38. This amount is increased by the wage index budget neutrality factor of 0.06% and the case-mix weight budget neutrality factor of 1.41%. Then it is reduced by 1.72% to make up for case mix growth from 2012 through 2014 that was estimated to be unrelated to patient acuity changes. Then, the rebasing adjustment as mandated by the Affordable Care Act will reduce the rate by $80.95. But never fear, we still have our market basket increase of 2.3% for agencies submitting quality data (or 0.3% for agencies not submitting quality data). The bottom line after these adjustments? The final 2016 episode payment amount is expected to be $2,938.37 (a reduction of about 0.78%) for agencies who submit quality data and $2,880.92 (a reduction of about 2.72%) for agencies who do not submit quality data. The 3% rural add-on continues through 2017.

In other reimbursement news, LUPAs and Non-Routine Supply (NRS) rates are also being adjusted. LUPA rates all show an increase of about 5.5% for agencies who submit quality data and 3.5% for agencies who do not submit quality data. The NRS conversion factor is being reduced by 2.82% for rebasing and increased by 2.3% for the market basket increase (or 0.3% for agencies not submitting quality data) This decreases the NRS conversion factor by 0.58% (or 2.54% for agencies not submitting quality data).

The 2015 final rule changed some of the CBSA regions to reflect the changing population demographics of certain areas. In 2015, those areas affected were subject to a blended wage index for a one year transition period. This transition period will expire in 2016 and all affected areas will now have their wage index determined by their new CBSA designation only.

There was also a summary of the report to Congress on the home health study required under the Affordable Care Act. It was theorized that the current PPS system creates an unbalanced system where certain patients are considered more preferred than others based on their care needs and expected therapy utilization. The study conducted showed that there was some vulnerability in the current system. In an attempt to address the disparity in patient access to care, Abt Associates was hired to develop alternative models for reimbursement. One model had groupings driven by diagnosis, another by therapy utilization, and a third by focus of treatment. There is no plan to change the PPS model this year but this may speak to changes coming in future home health rules.

In regulation changes, total outlier payments are being changed from 5% to 2.5% of total payments under PPS with a limit of 10% of estimated total payments per agency in a given year. There will be some clarifying language added concerning PEP adjustments. Some updates will be made to remove outdated references and some other clarifications will be done as well.

***Now might be a good time to take a break and get a drink of water because this next section is a little long…***

Home Health Value-Based Purchasing

A big change for 2016 is the implementation of the Home Health Value-Based Purchasing (HHVBP) Model. CMS believes that the fairest way of starting this program is to select a number of states and require cooperation of all agencies within the selected states. This should limit aberrant data and unfair competition within service areas. The proposed model will include 9 states. The selection of the states started by putting all 50 states into 9 groups based on similar agency and patient characteristics. Then a computer program randomly selected 1 state from each group to participate in the study. The proposed selected states are Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska, and Tennessee. These selections will not be finalized until public comments are considered and it is published in the final rule.

Performance scores and payment adjustments will be based on an agency’s CMS Certification Number. Agencies will be divided into “larger-volume cohorts” meaning that the agency is participating in HHCAHPS and “smaller-volume cohorts” which are agencies exempt from HHCAHPS participation. These agencies will be compared with each other to determine higher and lower performing agencies. Agencies will also be compared against their own past performance. Calendar year 2015 data will be used as a baseline. CMS will make quarterly reports available at the end of the following quarter for all agencies (for example, January through March reports will be available in July). These reports would include comparisons to like-sized cohorts in the agency’s region to illustrate where an agency is performing in relation to others it is competing against.

Annual payment adjustment reports would be provided to each competing agency separately with a proposed adjustment of up to 8% of increased or decreased funds based on performance numbers. Payment adjustments would be assessed two years following the year in question. For example, upward or downward adjustments based on data from January, 2016 through December, 2016 would be reported to an agency August 1, 2017 and processed beginning January 1, 2018. The adjustments are projected to occur incrementally so that the maximum adjustment would be 5% in 2018 and 2019, 6% in 2020, and 8% in 2021 and 2022. Agencies will be allowed a 10-day preview period to ensure that the data used to compute their adjustments is accurate and to appeal any inaccuracies.

Data for HHVBP will be taken from the OASIS, Medicare claims, HHCAHPS, and some data reported directly from the agencies to CMS.

The 15 outcome measures to be considered include 8 OASIS items:

  1. Improvement in Ambulation (M1860),
  2. Improvement in Bed Transferring (M1850),
  3. Improvement in Bathing (M1830),
  4. Improvement in Dyspnea (M1400),
  5. Discharged to Community (M2420),
  6. Improvement in Pain Interfering with Activity (M1242),
  7. Improvement in Management of Oral Medications (M2020), and
  8. Prior Functioning ADL/IADL (M1900)

2 claims items are also to be considered as outcomes:

  1. Acute Care Hospitalizations
  2. Emergency Department Use without Hospitalization

5 CAHPS items are to be included in outcomes as well:

  1. Care of Patients (Q9, Q16, Q19, Q24)
  2. Communications between Providers and Patients (Q2, Q15, Q17, Q18, Q22, Q23)
  3. Specific Care Issues (Q3, Q4, Q5, Q10, Q12, Q13, Q14)
  4. Overall rating of home health care (Q20)
  5. Willingness to recommend the agency (Q25)

The 10 process measures under consideration are all OASIS items:

  1. Timely Initiation of Care (M0102 & M0030)
  2. Care Management: Types & Sources of Assistance (M2102)
  3. Pressure Ulcer Prevention and Care (M1300 & M2400)
  4. Multifactor Fall Risk Assessment Conducted for all Patients who can Ambulate (M1910)
  5. Depression Assessment Conducted (M1730)
  6. Flu Vaccine Data Collection Period (M1041)
  7. Flu Vaccine Received for Current Flu Season (M1046)
  8. Pneumonia Vaccine Ever Received (M1051)
  9. Reason Pneumonia Vaccine not Received (M1056)
  10. Drug Education on All Medications Provided to Patient/Caregiver (M2015)

There are also 4 Proposed New Measures that agencies will be required to self-report:

  1. Outcome – Adverse Events for Improper Medication Administration and/or Side Effects
  2. Process – Influenza Vaccine Coverage for Home Health Care Personnel
  3. Process – Herpes Zoster (Shingles) Vaccine: Has the patient ever received the shingles vaccine?
  4. Process – Advanced Care Plan

The plan is to group the above measures into 4 groups – Clinical Quality of Care, Outcome and Efficiency, Person & Caregiver Centered Experience, and New Measures. For New Measures, participating agencies would receive 10 points in the first reporting year simply by reporting their data. Those agencies who do not report would receive 0 points.

CMS would use an “achievement range” to calculate points awarded to each agency in the other three categories. The achievement range is the range of values between the “achievement threshold” (which is the median of all agencies competing – the median is the middle value in a range of numbers) and the “achievement benchmark” (which is the average of the top 10% of all participating agencies). Agencies performing above the benchmark would receive 10 points, agencies performing below the benchmark but above the threshold would receive 1-9 points depending on their scores, and agencies performing below the threshold would receive 0 points.

CMS would also determine an improvement score in each of the three remaining categories based off of a calculated benchmark and the agency’s own baseline score. An agency would receive 10 points if their performance is above the improvement benchmark score. Agencies performing below the improvement benchmark but higher than their baseline would receive 1-9 points depending on their level of improvement. Agencies performing below their baseline would receive 0 points.

More information on all of these measures can be found in the proposed rule following the link at the bottom of this blog.

***Are you still with me? Hang in there just a little bit longer – you’re almost done!***

Home Health Quality Reporting Program

CMS is proposing an addition to the quality measures currently being reported by agencies. The addition is titled “Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened”. This new measure is being added because of a clause in the IMPACT Act that requires skin integrity reporting by home health agencies. It will be calculated by determining the percentage of patients with Stage 2, 3, or 4 pressure ulcers that are new or worsened since the beginning of the episode of care. Current Number of Unhealed Pressure Ulcers at Each Stage or Unstageable (M1308) and Worsening in Pressure Ulcer Status Since SOC/ROC (M1309) from the OASIS would be used to calculate this measure. In addition, ADL Assistance – Transferring (M1850) and Bowel Incontinence Frequency (M1620) OASIS items would be used to calculate the risk adjustment. Primary & Other Diagnoses (M1020 & M1022) would allow selection of patients with peripheral vascular disease, diabetes, or malnutrition.

There are also four quality measures under consideration for 2017. These measures are Unplanned Readmissions to SNFs for 30 days post discharge, Medicare Spending per Beneficiary, Percent of patients who discharged to a higher level of care versus to the community, and percent of patients for whom needed medication review actions were completed.

In addition to the above, there are seven quality measures under consideration for future implementation but dates and details have not yet been finalized. These measures are Falls risk composite process measure, Nutrition assessment composite measure, Improvement in Dyspnea for patients with primary diagnosis of CHF or COPD or asthma, Improvement in patient-reported interference due to pain, Improvement in patient-reported pain intensity, Improvement in patient-reported fatigue, and Stabilization in 3 or more ADLs.

Pay-for-reporting is also changing. As you know, all OASIS data for Medicare/Medicaid beneficiaries must be transmitted to CMS for quality reporting unless the patient is receiving only non-skilled services, is receiving pre- or post- partum services, or is under 18 years of age. For the reporting period of July, 2016 through June, 2017 it is proposed that agencies must have a performance threshold of 80%. Then starting in July, 2017 agency performance thresholds must reach 90%. Now more than ever it is vital that the person submitting your OASIS data ensures that there are no rejection errors on the report and that agencies maintain a copy of the Final Validation Report to provide proof of submission. Failure to meet these thresholds will result in the 2% decrease in reimbursement discussed in the PPS/Payment Adjustments section of this blog.

Other items

In addition to the sections above, there were other items discussed and clarified. The comment period expires at 5 PM on September 4, 2015. If you would like to submit a comment or review the complete Home Health PPS Proposed Rule for 2016, go to http://federalregister.gov/a/2015-16790 for more information.

The proposed changes for 2016 should not have a huge effect on therapy staffing. In general, the home health industry is continuing the move toward efficiency and cost-saving. To that end, therapists and therapy staffing companies who work to show better outcomes with fewer visits are going to maintain their edge in competitive markets. therapyBOSS can help with that in several ways. By facilitating communication between disciplines, the care plan can be adjusted more timely to meet patients’ changing healthcare needs. By allowing the clinician to view all clinical documentation at any time, patterns of behavior and performance can be ascertained more quickly and appropriate interventions can be implemented. These are just a few examples.

At Pragma-IT, we aim to keep you informed and compliant with all current regulations. We will be updating the OASIS forms in our system to OASIS C1/ICD-10 in the next few weeks as well as making modification to allow you to look up ICD-10 codes. If there is any other information we can help you with, please call us at 847-581-6400 or send us an e-mail at support@therapyboss.com.