On November 1, CMS issued the final PPS rule for Home Health (2024). The majority of provisions within this rule, especially those related to payment, take effect on January 1, 2024. The Final Rule as published is available for download here: Home Health 2024 Final Rule
In July I wrote a post on the proposed rule. That post is available here: https://rhislop3.com/2023/07/21/friday-feature-home-health-proposed-rule-implications/
The final rule includes a .8% payment increase to the 30-day episode rate (average). This compares to the 2.2% reduction to the same rate that was in the proposed rule – a small victory.
CMS is finalizing a permanent prospective payment adjustment to the CY 2024 home health 30-day period payment rate to account for any increases or decreases in aggregate expenditures as a result of the difference between assumed behavior changes and actual behavior changes, due to the implementation of the Patient-Driven Groupings Model (PDGM) and 30-day unit of payment as required by the Bipartisan Budget Act of 2018. The finalized -2.890 percent permanent adjustment is half the full permanent adjustment of -5.779 percent (-5.653 percent in the proposed rule). As a result of CMS finalizing roughly half of the full permanent adjustment projected, Medicare payments to HHAs in CY 2024 will increase in the aggregate by 0.8 percent, rather than a 2.2 percent decrease as initially proposed.
What is going on in terms of rate setting is the reconciliation of the “misses” CMS made in budget projections when the HHA (home health) PPS converted to PDGM. CMS factored the conversion to be budget neutral (save case expansion/growth). Their reasoning comes from “behavior changes” or in short, how providers would change in the conversion in terms of coding and lengths of stay plus service delivery. As is typical, CMS guessed wrong and providers adapted quickly and took advantage of the additional complexity codes, disease codes, and skilled nursing opportunities in PDGM. The net result, the outlays under PDGM were greater than anticipated. Effectively, CMS paid more under PDGM than it would have under the old system. The Fact Sheet summary is here with applicable sections describing the machinations CMS went through with regard to its conversion to PDGM and behavior assumptions. https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2024-home-health-prospective-payment-system-final-rule-cms-1780-f
The other key provisions within the Final Rule 2024 are summarized below (this list is not in exhaustive detail as more information is in the fact sheet and the Final Rule itself – both referenced herein).
- CMS is rebasing the home health market basket or the amalgamation of non-labor costs agencies incur. This basket is trended forward with an inflation factor to adjust rates accordingly, theoretically reimbursing providers for costs.
- CMS is updating the industry labor-related costs or share. Currently, the share (2024 rates) is based on 2021 cost reports and sits at 74.9%. The actual cost labor related cost share is 76.1%.
- CMS is finalizing its proposal to compensate for negative pressure wound therapy using a disposable device for patients in home health. The payment will be within the 30-day episode rate.
- Each of the 432 payment groups under the PDGM has an associated case-mix weight and LUPA threshold. CMS will recalibrate the case-mix weights and LUPA thresholds using 2022 data (the most recent complete data available).
- With regard to the HH QRP program (quality reporting), CMS is adding two measures.
- COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date (Patient/Resident COVID-19 Vaccine) measure to the HH QRP beginning with the CY 2025 HH QRP. NOTE: This measure is odd as vaccine uptake has waned dramatically and the present data on vaccine effectiveness in terms of preventing infection or reducing infection spread shows limited to zero efficacy.
- Functional Discharge Score (DC Function) measure to the HH QRP beginning with the CY 2025 HH QRP.
- CMS is removing two measures.
- With the addition of the Discharge Function measure, CMS will remove the Application of Percent of Long-Term Care Hospital (LTCH) Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (Application of Functional Assessment/Care Plan) measure from the HH QRP beginning with the CY 2025 HH QRP.
- Additionally, CMS finalized removal of two OASIS items that are no longer necessary for collection, the M0110 – Episode Timing and M2220- Therapy Needs items.
- CMS has finalized or is via this rule, the public reporting of four quality measures.
- Discharge Function;
- Transfer of Health (TOH) Information to the Provider—Post-Acute Care (PAC) Measure (TOH-Provider);
- Transfer of Health (TOH) Information to the Patient—Post-Acute Care (PAC) Measure (TOH-Patient); and
- COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date.
- CMS is proposing the following modifications/replacements to the Home Health Value-Based Purchasing program. Recall, Value-Based Purchasing is a pay for performance elements whereby agencies that exceed certain thresholds receive incentive dollars in the forms of additional reimbursement and agencies with performance below the thresholds are subject to reimbursement reductions.
- Replace the two measures for Self-Care and Mobility with the Discharge Function Score measure effective January 1, 2025;
- Replace the OASIS-based Discharge to Community measure with the claims-based Discharge to Community-Post Acute Care (PAC) Measure for Home Health Agencies, effective January 1, 2025;
- Replace the claims-based Acute Care Hospitalization During the First 60 Days of Home Health Use and the Emergency Department Use without Hospitalization During the First 60 Days.
- CMS is finalizing the requirement that HHAs must meet or exceed a data submission threshold set at 90 percent of all required OASIS and submit the data through the CMS data submission systems.