2019 Home Health Final Rule

November 12, 2018

In July, we wrote about the 2019 Home Health Proposed Rule. The final rule for 2019 was published November 1, 2018. There were some changes in response to comments received so we’ll go over the highlights here.

Home Health Prospective Payment System (HH PPS) Updates

The good news is that CMS is projecting a 2.2 percent increase in payments for calendar year (CY) 2019. This reflects a 3.0 percent market basket increase and a decrease of 0.8 percent to account for the multifactor productivity (MFP) adjustment. The national, standardized 60-day episode payment will increase from $3,039.64 to $3,154.27 for urban agencies who submit quality data.

The finalized changes to case-mix adjustment variables and scores could offset this good news a bit. The final count was 77 items decreased/dropped and 16 items increased/added. According to our calculations, 133 case-mix weights were reduced and 20 case-mix weights increased. Overall, the average change was a 2.1 percent reduction in case-mix weight values from 2018 to 2019. CMS stated that “case-mix weights change very little, with most case-mix weights either increasing or decreasing by 1 to 2 percent with no case-mix weights increasing by more than 3 percent or decreasing by more than 3 percent”. However, we compared the rates from 2018 with the 2019 values in Table 6 of the Final Rule and counted 54 pay groups with higher than 3% reductions. The highest being -5.65% for pay group 40231 – All Episodes, 20+ Therapy Visits – C2F3S1 going from 1.8942 in 2018 to 1.7871 in 2019.

The labor-related share will decrease from 78.535 percent to 76.1 percent due to a decrease in the number of skilled nursing and home health aide visits overall. As a reminder, the labor percentage is the amount of the standard PPS rate that is adjusted by your wage index. This means areas whose wage index is less than 1 can anticipate a slight increase in reimbursement while areas with a greater than 1 wage index will see a slight decrease from the 2018 formulas.

The rural add-on adjustment was finalized for 2019 to comply with the Bipartisan Budget Act of 2018. In 2019, “High utilization” areas will see the rural add on decrease from 3 percent to 1.5 percent, “low population density” areas will see an increase from 3 percent to 4 percent and “all other” areas will maintain a 3 percent rate. All areas will have a 1 percent annual decrease until the rural add-on is phased out. See table 25 of the final rule and the CY 2019-CY 2022 Rural-Add On-Payment Designations for more information about finalized rural county category assignments. Note that these areas will keep their category assignments until the rural add-on is phased out regardless of whether their agency characteristics change.

LUPA rates will increase by the 2.2 percent annual increase while the LUPA add-on factor and PEP adjustment methodology will remain the same. The outlier fixed dollar loss (FDL) ratio will decrease from 0.55 to 0.51 which will allow more episodes to qualify as outliers.

CY 2020 Patient-Driven Groupings Model (PDGM)

The Patient-Driven Groupings Model (PDGM) will be effective for periods that begin on or after January 1, 2020. Payment will be in 30-day periods. Episodes and plans of care will still be at least every 60 days. There were some changes from the proposed rule to the final rule.

The number of Home Health Resource Groups will increase to 432 from the proposed 216. This increase is due to the addition of 7 clinical sub-groups to the MMTA Clinical Group. The HIPPS code would be calculated by the following:

  • 1st position (Admission Sources and Timing Categories): Community Early (1); Institutional Early (2); Community Late (3); Institutional Late (4)
  • 2nd position (Clinical Group from primary diagnosis on claim): Medication Management, Teaching and Assessment (MMTA)-Other (A); Neuro/Stroke Rehabilitation (B); Wounds (C); Complex Nursing Interventions (D); Musculoskeletal (MS) Rehab (E); Behavioral Health (F); MMTA-Surgical Aftercare (G); MMTA-Cardiac (H); MMTA-Endocrine (I); MMTA-GI/GU (J); MMTA-Infections (K); MMTA-Respiratory (L)
  • 3rd position (Functional Levels from OASIS M-items) – Low (A), Medium (B), High (C)
  • 4th position (Comorbidity Adjustments from secondary diagnoses on claims) – None (1), Low/Single Comorbidity (2), High/Interaction Comorbidity (3)
  • the 5th position of the HIPPS code will default to “1” but could be used in the future to define other payment criteria

“Institutional” admission sources would only be used for patients who had an acute or post-acute care stay in the 14 days prior to an early 30-day period or had an acute hospitalization in the prior 14 days for any late 30-day periods. An occurrence code will be created for agencies to use on the final claim to report an institutional stay to Medicare if that stay is not seen in the HETS eligibility check or if the patient had a stay not billable to Medicare (for example, VA hospitalization). If the occurrence code is not used but a claim is submitted to Medicare after the home health claim has been received, CMS says the system will look for home health episodes in the following 14 day period that were paid as community claims and adjust them to institutional claims.

“Early” timing is only be the first 30 day period of the admission episode with a gap of more than 60 days from the last home health agency period to the start of care date.

Each 30 day period will have a RAP and final claim filed. Agencies with an initial Medicare certification date on or after January 1, 2019 would receive a $0 RAP payment and full payment of the 30-day period at the final claim.

Episodes that start before 1/1/2020 but end after 1/1/2020 will be paid a CY2020 national, standardized 60-day episode amount. Episodes that begin after 1/1/2020 will be subject to the 30-day payment rules. Essentially, the “episode through” date determines the payment rate while the “episode from” date determines the payment methodology (60-day vs 30-day).

Start of Care and Recertification assessments will still determine the case mix reimbursement for the 30-day periods for the most part. However, Resumption of Care or Other Follow-Up assessments in the first 30 days of an episode could update the case mix for the second 30 day period based on the OASIS and updated diagnosis codes.

LUPA thresholds are finalized to be the 10th percentile or 2 visits for each case mix step which means the LUPA threshold will change from 5 visits per 60-day episode to a variable 2 – 6 visits per 30-day period. See Table 32 of the Final Rule for LUPA thresholds by HIPPS code.

Find more information about PDGM at Details for title: CMS-1689-FC CMS, at the bottom of the page. Look for the PDGM Grouper Tool zip file. You can also find more information about the PDGM and its development in Section III (F) of the final rule.

Documentation Clarification and Changes

The final rule upholds that home health agency documentation can be used in conjunction with physician and/or acute/post-acute care facility’s information to provide evidence of patient eligibility for home health care services. Remember that the documentation must be signed and dated by the certifying physician and all documentation from the home health agency and certifying physician must be consistent.

The estimate of how much longer home health services will be required has been eliminated for recertifications on and after January 1, 2019. All other recertification requirements remain.

Home Health Value Based Purchasing (HH VBP)

Home Health Value Based Purchasing (HH VBP) is continuing for Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee and Washington. All items from the proposed rule are finalized with no changes. For more information about HH VBP, review section IV of the final rule starting on page 322.

Home Health Quality Reporting Program (HH QRP)

Home Health Quality Reporting Program (HH QRP) changes are finalized with no changes from the proposed rule. For more information about HH QRP, review section V of the final rule starting on page 372.

Change in OASIS Items

Changes to the OASIS data set starting January 1, 2020 are finalized. CMS estimates a removal of “1 data element at SOC, 1 data element at ROC, 38 data elements at FU, 3 data elements at TOC and 3 data elements at Discharge”. It appears that our assumption in the prior article about diagnosis codes was wrong and that diagnosis codes used for the Clinical Grouping and Comorbidity Adjustment domains of the PDGM will come from claims data. Most systems will probably take the diagnosis codes from the plan of care for use in the grouper since you would need to run the grouper for the HIPPS code before generating your claim.

Home Infusion Therapy Coverage & Accreditation

You can find all the information about Home Infusion Therapy in Section VI of the Final Rule starting on page 414.

So What Does This All Mean?

For home health agencies, you cannot afford to be complacent about your data or the accuracy of your clinicians. It is essential that assessing clinicians not only understand the OASIS items but have a good comprehension of ICD-10 coding and are proactive in communicating with physicians and other members of the care team to be as detailed as possible in their documentation. Many non-specific codes will cause your claims to be denied under PDGM. And PDGM is happening. There is no sense in burying your head in the sand and hoping it will go away. You have a year to prepare, educate and re-staff as necessary.

For therapy staffing companies, as the payment incentive for therapy visit quantity goes away, make sure you are showing the value of the services your staff provides. Ensure your therapists understand how to explain to home health agency management the clinical necessity behind established frequencies. Prepare to intervene when agencies more concerned with their bottom line seek to reduce therapy services. According to the final rule, “CMS analysis demonstrates that the average share of therapy visits across all 60-day episodes of care increased from 9 percent of all visits in 1997, prior to the implementation of HH PPS…to 39 percent of all visits in 2015”. While many factors probably contributed to that increase, no doubt some of it was due to therapy payment thresholds. With those thresholds eliminated, you can anticipate that agencies will be more mindful of their overall profit-margins which could translate in an overall reduction in services.

therapyBOSS will continue to partner with home health agencies and therapy staffing companies to ensure that documentation remains as compliant as possible, as well as facilitating communication among all members of the care team. We will have OASIS-D ready for use on January 1, 2019. If you have any comments or suggestions, please connect with us on Facebook.