CMS Finalizes New Structure to Move Home Health to Value-Based Payment

CMS is moving home health agencies away from a volume-based payment model and to a new value-based payment system. The Patient-Driven Groupings Model (PDGM) would focus on patient needs and rely more heavily on patient characteristics in order to pay for home health services.

The finalized changes to the Home Health Prospective Payment System (HH PPS) promotes remote patient monitoring by allowing the costs to be reported as allowable costs to Medicare and implements temporary transitional payments for home infusion therapy services for 2019 and 2020.

“This home health final rule focuses on patient needs and not on the volume of care,” CMS Administrator Seema Verma said in a statement. “This rule also innovates and modernizes home healthcare by allowing remote patient monitoring. We are also proud to offer new home infusion therapy services. Using new technology and reducing unnecessary reporting measures for certifying physicians will result in an annual cost savings and provide home health agencies (HHAs) and doctors what they need to give patients a personalized treatment plan that will result in better health outcomes.”

CMS expects the new payment model, plus changes to meaningful measures, to reduce the burden for HHAs by approximately $60 million annually as of 2020.

The Bipartisan Budget Act of 2018 required a change in payment under HH PPS. The act required that Medicare stop using the number of therapy visits, which encourage volume over value, to determine home health payment.

“The improved structure of this case-mix system would move Medicare towards a more value-based payment system that puts the unique care needs of the patient first while also reducing the administrative burden associated with the HH PPS,” according to the CMS fact sheet.

Under the new changes, the PDGM would use “patient characteristics to place home health periods of care into meaningful payment categories,” which is “more consistent with how home health clinicians differentiate between home health patients in order to provide needed services,” the fact sheet explained.