2019 Home Health Proposed Rule. Digested.

July 10, 2018

This year’s home health proposed rule was jam packed with regulatory goodness. This 600-page document, though not officially published until July 12, 2018, is available for review by the public now. Comments will be accepted from now until August 31, 2018. You can submit your comment electronically (enter CMS-1689-P into the search box and click “Comment Now!” on the right). You can also send your comments by regular mail or express/overnight mail using the addresses referenced on page 3 of the rule. Make sure you include the file code CMS-1689-P or your comment may not be considered.

Home Health Prospective Payment System (HH PPS) Updates

For calendar year (CY) 2019, CMS is projecting a 2.1 percent increase in payments. This reflects a 2.8 percent market basket increase and a decrease of 0.7 percent to account for the multifactor productivity (MFP) adjustment. The national, standardized 60-day episode payment will increase from $3,039.64 to $3,151.22.

There were many adjustments to the case-mix adjustment variables and scores. We counted 80 items decreased/dropped and 17 items increased/added. However, it appears that on their own only 19 items would decrease the clinical grouping step, 1 item would decrease the functional grouping step and 5 items would increase the clinical grouping step. So the changes appear to be relatively minor.

There is a proposed change to the labor-related share from 78.535 percent to 76.1 percent due to a decrease in the number of skilled nursing and home health aide visits by agencies overall. The labor percentage is the amount of the standard PPS rate that is adjusted by your wage index. So, if you are in an area where your wage index is less than 1, you can anticipate a slight increase in reimbursement with the new percentages while agencies whose wage index is greater than 1 will have a slight decrease in reimbursement. For example, using 2018 formulas, an agency in CBSA 42340 (wage index 0.7996) with a HIPPS code of 4AGKS would be reimbursed $3,246.35 now but that amount would adjust to $3,265.07 if the labor percentage was decreased while an agency in CBSA 32900 (wage index 1.3447) with the same HIPPS would see reimbursement go from $4,888.40 to $4,856.20.

The rural add-on adjustment will be changing in 2019 to comply with the Bipartisan Budget Act of 2018. Rural areas will be categorized as “high utilization”, “low population density” or “all other”. “High utilization” areas will see the rural add on decrease from 3 percent to 1.5 percent in 2019, “low population density” areas will see an increase from 3 percent to 4 percent and “all other” areas will maintain a 3 percent rate in 2019. All areas are anticipated to have a 1 percent annual decrease until the rural add-on is phased out. See table 26 of the proposed rule and the CY2019 through CY2022 Rural Add-On Payments file for more information about rural county category assignments.

LUPA rates will increase by the 2.1 percent annual increase while the LUPA add-on factor and PEP adjustment methodology will remain the same. The outlier fixed dollar loss (FDL) ratio is proposed to decrease from 0.55 to 0.51 because outlier occurrence at FDL = 0.55 is projected to be only 2.32 percent of total PPS payments and the outlier payment limit is mandated at 2.5 percent of total payments.

The calculations and reasons for all of these adjustments can be found in the proposed rule. If you think that any of the data is not correct, now is the time to make sure your voice is heard before the rule finalizes.

CY 2020 Patient-Driven Groupings Model (PDGM)

More information is provided regarding the Patient-Driven Groupings Model (PDGM). This was originally addressed in last year’s proposed rule as the Home Health Groupings Model (HHGM). In short, the PDGM is planned for implementation for periods on or after January 1, 2020. Payment would be in 30-day periods however, episodes and plans of care would still be at least every 60 days.

The 216 Home Health Resource Groups would be determined using the following:

  • 4 Admission Sources and Timing Categories – Community Early, Community Late, Institutional Early, Institutional Late
  • 6 Clinical Groupings from primary diagnosis on claim – Neuro/Stroke Rehabilitation, Wounds, Complex Nursing Interventions, Musculoskeletal (MS) Rehab, Behavioral Health and Medication Management, Teaching and Assessment (MMTA)
  • 3 Functional Levels from OASIS – Low, Medium, High (note the new GG items are not yet included in calculating functional levels)
  • 3 Comorbidity Adjustments from secondary diagnoses on claims – None, Low, High

“Institutional” admission sources would only be used for patients who had an acute or post-acute care stay in the 14 days prior to the 30-day period. An occurrence code will be created for agencies to use on the final claim to report an institutional stay to Medicare that is not in Medicare’s system (for example, an acute or PAC stay paid by the VA). The agency would be responsible for maintaining evidence of that stay in case of an audit of the episode.

“Early” timing would 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.

Each 30 day period would 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.

And if you’re still with me after all that, you can find out that a LUPA will no longer be 4 or less visits in an episode. Check out Table 47 starting on page 234 of the proposed rule to see the new LUPA visit thresholds. The listed Visit Threshold is the number of visits required for a full period payment. LUPAs will vary from 1 visit to 5 visits per 30 day period depending on the HIPPS code.

The PDGM grouper tool can be found on the Details for title: CMS-1689-P CMS webpage at the bottom. Look for the PDGM Grouper Tool zip file. You can also find more information about the PDGM and its development in Section III (F) starting on page 116 of the proposed rule.

Documentation Clarification and Changes

As previously instructed, 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. The documentation must be signed and dated by the certifying physician to signify that it is incorporated into their medical record. Suggested documents include the plan of care and the comprehensive assessment of the patient but agencies are not limited to these documents. Just be sure that the documentation from the physician or facility and the agency paperwork demonstrate a consistent clinical picture of the patient and corroborate each other.

The additional recertification statement about how much longer home health services will be required is proposed to be eliminated because of duplication with the plan of care frequency and duration.


Telehealth service costs will be allowed to be reported as part of operating expenses on the annual cost report. See Section III (H) of the proposed rule for more information of the potential benefits of using telehealth services in home health.

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 agencies in each of the listed states are required to participate. Agencies in participating states will see up to a plus or minus 3 percent payment adjustment based on their Total Performance Score (TPS) in 2018 and up to a plus or minus 5 percent adjustment in 2019. The TPS is calculated using OASIS items, HHCAHPS items, and claims data.

For CY 2019, five measures are scheduled for removal and two new composite measures are planned to be added. There will also be some revision to the weighting methodology and scoring. The five measures to be removed are Influenza Immunization Received for Current Flu Season, Pneumococcal Polysaccharide Vaccine Ever Received, Improvement in Bathing, Improvement in Bed Transferring, and Improvement in Ambulation-Locomotion. The new composite measures will be Total Normalized Composite Change in Self-Care (using OASIS items M1800, M1810, M1820, M1830, M1845 and M1870) and Total Normalized Composite Change in Mobility (using OASIS items M1840, M1850 and M1860).

You can find a lot more information about HH VBP in Section IV (A) of the proposed rule starting on page 272.

Home Health Quality Reporting Program (HH QRP)

CMS is proposing to replace the six existing removal factors with 8 removal factors (7 existing LTCH/SNF/IRF factors and an additional cost-based new factor). Seven measures are set for removal from HH QRP in CY 2021. Factors considered for measure removal and their corresponding measures are:

  • Factor 1 (Measure performance among HHAs is so high and unvarying that meaningful distinctions in improvements in performance can no longer be made) – 3 measures – Depression Assessment Conducted, Diabetic Foot Care and Patient/Caregiver Education Implemented during All Episodes of Care, and Multifactor Fall Risk Assessment Conducted For All Patients Who Can Ambulate.
  • Factor 3 (A measure does not align with current clinical guidelines or practice) – 1 measure – Pneumococcal Polysaccharide Vaccine Ever Received.
  • Factor 4 (A more broadly applicable measure across settings, populations, or conditions for the particular topic is available) – 3 measures – Improvement in the Status of Surgical Wounds, Emergency Department Use without Hospital Readmission during the First 30 Days of HH, and Rehospitalization during the First 30 Days of HH.

There are two measures in development to “satisfy the domain of accurately communicating the existence and provision of the transfer of health information and care preferences”. They require ongoing testing by CMS so will not be included in the current proposed rule.

The other significant change to HH QRP is the proposal to use two years of data in public reporting instead of one. This could reduce the number of agencies who do not get scored in certain metrics due to lack of data. This would be consistent with the existing display periods for IRF, LTCH and SNF.

Change in OASIS Items

There are some more proposed changes to the OASIS starting January 1, 2020. Removal of M1910 (1 data element) for the Start of Care and Resumption of Care. For the Transfer to Inpatient Facility and Discharge OASIS, removal of M1051, M1056 and M2401 row a would result in a reduction of 3 data elements.

The Recertification and Other Follow-Up OASIS would have more changes. The addition of M1033 and M1800 would add 10 data elements to the assessment. However, there is a proposal to remove or make “optional” M1021 (3 elements), M1023 (15 elements), M1030 (3 elements), M1200 (1 element), M1242 (1 element), M1311 (12 elements), M1322 (1 element), M1324 (1 element), M1330 (1 element), M1332 (1 element), M1334 (1 element), M1340 (1 element), M1342 (1 element), M1400 (1 element), M1610 (1 element), M1620 (1 element), M1630 (1 element), M2030 (1 element), M2200 (1 element).

CMS estimates a “net reduction 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”. However, M1021 and M1023 are the OASIS questions that report primary and other diagnosis codes. It is absurd to claim that M1021 primary diagnosis could ever be made optional since that would indicate that there is no medical condition that the plan of care is addressing. Also, these diagnosis codes would be required for two of the four components of the PDGM: Clinical Grouping and Comorbidity Adjustment.

If you’re a “glass half full” kind of person, we still have a potential reduction of 1 data element at SOC/ROC, 3 data elements at TOC/DC, and 20 data elements at FU which isn’t too shabby. There was no mention of the additional OASIS elements proposed last year. In fact, ABT Associates and RAND Corporation came out with the Final Specifications for HH QRP Quality Measures in October, 2017. It appears that with the addition of GG130, GG170, J1800 and J1900 into the OASIS-D data set that the OASIS will be ready to address the three cross-setting QRP Quality Measures required by the IMPACT Act with no further additions.

Home Infusion Therapy

You can find all the information about Home Infusion Therapy in Section VI of the Proposed Rule. In short, it establishes the framework of the home infusion therapy benefit including health and safety standards, coverage, payment, accreditation requirements for the agency and approval and oversight of the accreditation organizations themselves.

Home Health Accreditation

Speaking of accreditation, home health Accrediting Organizations (AOs) will need to apply for approval of their program at least every six years. Not only that, but AOs will be required to provide a written statement that if an HHA requests to withdraw from the AO, the AO will continue the HHAs accreditation until the date of withdrawal or expiration of accreditation, whichever comes first. This regulation was developed to answer HHA complaints that AOs were abruptly dropping the HHA accreditation when notified of the intent to withdraw.

AO training and monitoring is a big focus in the proposed rule. AOs will be required to comply with CMS online training to align with state agency personnel education requirements. CMS will have state agencies re-survey some HHAs to validate AO reports of performance. These “validation surveys” will be performed within 60 days of the AO survey. Something to keep in mind if you think you are “safe” after your accreditation survey.

Requests for Information

CMS is seeking input from providers and suppliers regarding “Promoting Interoperability and Electronic Healthcare Information Exchange through Possible Revisions to the CMS Patient Health and Safety Requirements for Hospitals and Other Medicare- and Medicaid-Participating Providers and Suppliers” and “Price Transparency: Improving Beneficiary Access to Home Health Agency Charge Information”. See Section VIII (A) starting on page 424 and Section VIII (B) starting on page 433 if you would like more information on these programs.

So What Does This All Mean?

The bottom line is that your data matters… it really, really matters. Make sure your staff thoroughly understands all of the OASIS questions. Double-check processes to ensure accurate information gets submitted to CMS for OASIS and claims data. If you’re still documenting on paper, you should start considering an electronic medical records system to help minimize the chance of data entry errors or at least periodically audit that data entry for accuracy. Keep in mind that therapyBOSS will soon be there to support all of your needs, not only therapy staffing. If you are in the market, wait for it!

Most agencies are already reviewing clinician documentation. Auditing is a great tool as long as you follow it up with substantial education and intervention for employees who are consistently making errors. Clinicians who “always answer M#### wrong” should be re-educated on the meaning of the question with disciplinary action for non-compliance. If changes are made to the OASIS, make sure that billing corrections are submitted as needed to keep all data aligned and consistent.

The Wrap-Up

Home health has always been about change. The biggest thing I learned while reviewing this latest proposed rule (other than “parsimonious” means stingy or frugal) is that CMS has been very thoughtful and analytical about the changes they have put forward. They provide pages of explanations in support of the modifications they wish to make. So review what you can and comment electronically or by mail. It is our responsibility as patient advocates to make sure our voices are heard and improvement in provision of medical care remains our primary goal.

therapyBOSS will continue to ensure that documentation remains as compliant as possible. We will have OASIS-D ready for use on January 1, 2019 and will provide articles about updates as they are published by CMS. Also, if you have any comments or suggestions about the information in this article, please click on the question mark to the right to send us a message. You can also visit our Facebook page to post your feedback. While there, please like us! We work hard to deliver up-to-date information and to support your compliance efforts as much as possible.