Medicare Proposes Overhaul to Home Health Payment A 2020 rule would replace therapy needs with patient characteristics to determine reimbursement rates. Policy Analysis
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Policy Analysis  |   September 01, 2018
Medicare Proposes Overhaul to Home Health Payment
Author Notes
  • Sarah Warren, MA, is ASHA director of health care policy for Medicare. swarren@asha.org
    Sarah Warren, MA, is ASHA director of health care policy for Medicare. swarren@asha.org×
Article Information
Regulatory, Legislative & Advocacy / Policy Analysis
Policy Analysis   |   September 01, 2018
Medicare Proposes Overhaul to Home Health Payment
The ASHA Leader, September 2018, Vol. 23, 24-25. doi:10.1044/leader.PA1.23092018.24
The ASHA Leader, September 2018, Vol. 23, 24-25. doi:10.1044/leader.PA1.23092018.24
Medicare is proposing to change reimbursement for beneficiaries receiving home health care services—basing payment on patient characteristics instead of therapy needs—under regulations that will take effect Jan. 1, 2020.
The home health rule is partly a result of the Bipartisan Budget Act of 2018, which requires the Centers for Medicare and Medicaid Services (CMS) to, by 2020, stop using therapy to determine payment and to transition payment intervals from a 60-day “episode” to a 30-day period.
The proposal echoes a similar measure for skilled nursing facility payment scheduled to take effect Jan. 1, 2019. Both measures show progress toward implementation of a uniform post-acute care prospective payment system, as envisioned by Congress under the Improving Post-Acute Care Transformation (IMPACT) Act.
The rule would establish the patient-driven grouping model (PDGM), which is based on patient characteristics. PDGMs replace the home health grouping model, which uses therapy minutes as the primary determinant of payment. Under PDGM, therapy will be provided to patients who need it.

The rule would establish the patient-driven grouping model, which is based on patient characteristics.

Payment changes
Key provisions of the proposed rule include:
  • Payment that factors in the source of admission (from the community or from a facility, such as an acute-care inpatient hospital).

  • Increasing payment by up to ?20 percent based on the patient’s comorbidities.

  • Payment based on one of six clinical categories for which the patient is admitted to home health: musculoskeletal rehabilitation (to include speech-language pathology), neuro/stroke rehabilitation (to include speech-language pathology), wounds (post-operative wound care and skin/non-surgical wound care), complex nursing interventions, behavioral health care (including substance-use disorders), and medication management, teaching and assessment.

  • Payment adjusted based on three levels of function.

  • Modifying payment based on whether the episode is considered “early” (the first 30-day payment period) or “late” (each subsequent 30-day payment period).

  • Using Medicare cost reports to calculate the costs of providing care.

  • Changes to the annual payment rate updates and to the home health quality reporting program.

Does reimbursement that is higher for early episodes than for late encourage home health providers to deliver less care to patients with long-term needs?

More questions
Throughout the development of the PDGM, ASHA staff and leadership have been in active communication with CMS through meetings with staff, formal written comments and participation in a technical expert panel. In this communication, ASHA raised several concerns—that require resolution before the rule takes effect—about how the payment system might drive behavior in the home health industry. For example:
  • Does modifying payment based on the source of admission essentially create a disincentive to admit patients from the community?

  • Although speech-language pathology is acknowledged in two of the six clinical categories (musculoskeletal rehabilitation and neuro/stroke rehabilitation), SLPs also provide care to patients with complex nursing, behavioral health and medication management needs. How will their role in these categories be acknowledged and reimbursed?

  • Does reimbursement that is higher for early episodes (the first 30-day payment period) than for late episodes (each subsequent 30-day payment period) encourage home health providers to deliver less care to patients with long-term needs?

  • CMS data show that speech-language services are provided evenly over a 60-day episode, while occupational and physical therapy are usually provided in the early days of care. Given those patterns, will lower payment for late episodes have a discrete, negative impact on speech-language services?

ASHA is submitting official comments—including these critical concerns—to CMS. The comment period, open to any interested member of the public, closes Aug. 31.
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September 2018
Volume 23, Issue 9