Medicare to Cut Payments to Home Health Agencies

Payments to home healthcare facilities could be cut by $80 million in 2018 under proposed rule.

The Centers for Medicare & Medicaid Services (CMS) recently proposed a rule that would update payment rates and the wage index for home health agencies (HHAs) for Medicare in 2018, according to a press release. The proposed rule would also restructure the payment system in 2019.

The Home Health Prospective Payment System (HH PPS) rule is the first of many initiatives that strive for relief from regulatory burdens for providers, support the patient-physician relationships, and promote transparency, flexibility, and innovation in the delivery of care, according to the CMS.

“CMS is committed to helping patients and their doctors make better decisions about their healthcare choices,” said CMS Administrator Seema Verma. “We’re redesigning the payment system to be more responsive to patients’ needs and to improve outcomes. The new payment system aims to encourage innovation and collaboration and to incentivize home health providers to meet or exceed industry quality standards.”

Under the rule, the payment percentage for HHAs would be 1% in 2018. The CMS projects that Medicare payments will be reduced by 0.4% ($80 million), according to the release.

The CMS reports that this decrease in funding actually reflects a $190 million increase due to the 1% home health payment, in addition to the proposed -0.97% adjustment to the national, standardized 60-day episode payment rate to account for nominal case-mix growth for a $170 million decrease and the end of the rural add-on provision, which is a $100 million decrease, according to the release.

The rule would also revise the HH PPS case-mix adjustment methodology, which includes a change in the unit of payment from 60-day episodes of care to 30-day periods of care, to be implemented for periods of care beginning on or after January 1, 2019, according to the CMS.

Additionally, the CMS included proposals to change the Home Health Value-Based Purchasing Model and the Home Health Quality Reporting Program.

This rule was proposed the day after a bipartisan bill to increase Medicare access to in-home infusion services passed in the House. The Medicare Part B Improvement Act of 2017 (HR 3178) seeks to improve the delivery of infusion drugs and dialysis in the homes of Medicare patients. In-home infusion allows patients to receive personalized treatments without the burden and cost of traveling to a healthcare facility.

However, this proposed rule may threaten the viability of this bill.