Home health provider associations are worried that CMS’ proposed way of analyzing home health behavioral adjustments, aimed at keeping the revamped pay system budget neutral, could lead to big cuts down the road even though CMS is suggesting no new cuts to payment for 2022. The providers say CMS’ proposed method is contrary to Medicare law, but they aren’t yet considering legal action.
CMS in 2020 began paying home health agencies through a new system known as the patient-driven groupings model (PDGM), which aims to cut down on unnecessary therapies and focus more on patient clinical characteristics. The model also changed to reimbursing agencies based on 30-day periods of care and created 432 case mix payment groups, different multipliers that get applied to base pay rates according to a patient’s circumstances.
The new payment model needs to be implemented without impacting the overall budget. CMS assumes PDGM will make home health providers change coding practices to log the highest-paying code, adjust payments based on patients’ secondary diagnoses, and visit a patient more than might be necessary so they can get full payment for an episode of care.
The agency can adjust base payment based on these behavioral assumptions to keep the program budget neutral. This led to a 4.36% cut to home health providers’ base pay in the 2020 rule to offset assumed spending increases by home health providers.
CMS in the 2022 proposed rule says it would like to keep this 4.36% cut in place for another year but presents an analysis of the first year of PDGM data and asks for feedback.
CMS’ analysis was based on using data from 30-day periods during 2020 to simulate 60-day episodes, and then figuring out what 2020 payments would have looked like under the pre-PDGM pay model.
This analysis led to the conclusion that base payment for home health agencies was 6% higher than it should have been in 2020.
The National Association of Home Care & Hospice said in comments on the proposed rule that the way CMS came to this conclusion is flawed. The stakes are high for home health agencies because if CMS continues to use this model, the overpayment percentage would just continue to rise, leading to steep cuts down the line, NAHC President Bill Dombi said.
NAHC said the method for determining base pay adjustment to keep the program budget neutral needs to be based on behavioral changes triggered by switching from the old payment model to PDGM — and NAHC feels CMS doesn’t incorporate that in the proposed rule. The methodology outlined in the proposed rule doesn’t evaluate how accurate CMS’ 2020 behavioral assumptions were, doesn’t look into the difference between real and nominal changes in case mix and fails to compare how much CMS spent under PDGM with what it would have spent in 2020 without PDGM, NAHC said.
“What’s ironic about it is if a new payment model is expected to change behavior, the existing model is also expected to affect behavior, and that’s what they missed in their methodology,” Dombi said, adding that 2020 behavior shouldn’t be applied to an old payment model because the new model would have materially changed provider actions when it comes to things like therapy visits.
NAHC believes CMS’ proposed method for figuring out whether PDGM spending is budget neutral goes against Medicare law because it is tied to changes in case mix weight, rather than assumed behavior changes.
“We just see their methodology as really off base,” Dombi said. “In fact, it doesn’t come close to what the law requires them to do.”
The Partnership for Quality Home Healthcare also thinks CMS’ approach is incorrect. CMS can’t just slot claims billed under a previous system into PDGM, the organization said in its comment letter. PQHH suggests CMS instead use 2018 60-day episode data, broken down into 30-day episodes. This gets rid of the need to incorporate changes due to implementing the PDGM and prevents having to get at the impact of COVID-19 on therapy utilization, the group said.
But Dombi said it’s too soon to threaten a lawsuit, and doing so likely wouldn’t make a difference to CMS. Joanne Cunningham, executive director of PQHH, said her organization hasn’t talked about levying a lawsuit against CMS, either.
PQHH also said CMS should take the 4.36% cut out of the final pay rule. The group commissioned its own analysis of all 2020 Medicare claims data for home health agencies, which found that home health providers aren’t actually acting in the way CMS has assumed they would respond to PDGM. Medicare payments are 5.76% lower than budget neutrality would dictate, according to the PQHH-sponsored analysis. Because of this, even the 4.36% behavioral adjustment isn’t justified, PQHH said.
“CMS’ authority to make and adjust for assumptions about provider behavior does not include using this mechanism to generate program savings, which appears to be the effect of the proposed rule,” PQHH said in its comment letter.
The one change to the PDGM that CMS does suggest for 2022 is recalibrating case mix weights based on 2020 data. CMS said this would better reflect PDGM utilization than the current weights, which were set using claims data from the old system.
But NAHC and PQHH are adamant that CMS should not make this change, since utilization data from the beginning of the COVID-19 pandemic likely won’t be comparable to how home health is used in 2022.
Home Health Sector Fears Cuts If CMS’ Planned Analyses Not Altered
Inside Health Policy
September 2, 2021 11:45 am
Home health provider associations are worried that CMS’ proposed way of analyzing home health behavioral adjustments, aimed at keeping the revamped pay system budget neutral, could lead to big cuts down the road even though CMS is suggesting no new cuts to payment for 2022. The providers say CMS’ proposed method is contrary to Medicare law, but they aren’t yet considering legal action.
CMS in 2020 began paying home health agencies through a new system known as the patient-driven groupings model (PDGM), which aims to cut down on unnecessary therapies and focus more on patient clinical characteristics. The model also changed to reimbursing agencies based on 30-day periods of care and created 432 case mix payment groups, different multipliers that get applied to base pay rates according to a patient’s circumstances.
The new payment model needs to be implemented without impacting the overall budget. CMS assumes PDGM will make home health providers change coding practices to log the highest-paying code, adjust payments based on patients’ secondary diagnoses, and visit a patient more than might be necessary so they can get full payment for an episode of care.
The agency can adjust base payment based on these behavioral assumptions to keep the program budget neutral. This led to a 4.36% cut to home health providers’ base pay in the 2020 rule to offset assumed spending increases by home health providers.
CMS in the 2022 proposed rule says it would like to keep this 4.36% cut in place for another year but presents an analysis of the first year of PDGM data and asks for feedback.
CMS’ analysis was based on using data from 30-day periods during 2020 to simulate 60-day episodes, and then figuring out what 2020 payments would have looked like under the pre-PDGM pay model.
This analysis led to the conclusion that base payment for home health agencies was 6% higher than it should have been in 2020.
The National Association of Home Care & Hospice said in comments on the proposed rule that the way CMS came to this conclusion is flawed. The stakes are high for home health agencies because if CMS continues to use this model, the overpayment percentage would just continue to rise, leading to steep cuts down the line, NAHC President Bill Dombi said.
NAHC said the method for determining base pay adjustment to keep the program budget neutral needs to be based on behavioral changes triggered by switching from the old payment model to PDGM — and NAHC feels CMS doesn’t incorporate that in the proposed rule. The methodology outlined in the proposed rule doesn’t evaluate how accurate CMS’ 2020 behavioral assumptions were, doesn’t look into the difference between real and nominal changes in case mix and fails to compare how much CMS spent under PDGM with what it would have spent in 2020 without PDGM, NAHC said.
“What’s ironic about it is if a new payment model is expected to change behavior, the existing model is also expected to affect behavior, and that’s what they missed in their methodology,” Dombi said, adding that 2020 behavior shouldn’t be applied to an old payment model because the new model would have materially changed provider actions when it comes to things like therapy visits.
NAHC believes CMS’ proposed method for figuring out whether PDGM spending is budget neutral goes against Medicare law because it is tied to changes in case mix weight, rather than assumed behavior changes.
“We just see their methodology as really off base,” Dombi said. “In fact, it doesn’t come close to what the law requires them to do.”
The Partnership for Quality Home Healthcare also thinks CMS’ approach is incorrect. CMS can’t just slot claims billed under a previous system into PDGM, the organization said in its comment letter. PQHH suggests CMS instead use 2018 60-day episode data, broken down into 30-day episodes. This gets rid of the need to incorporate changes due to implementing the PDGM and prevents having to get at the impact of COVID-19 on therapy utilization, the group said.
But Dombi said it’s too soon to threaten a lawsuit, and doing so likely wouldn’t make a difference to CMS. Joanne Cunningham, executive director of PQHH, said her organization hasn’t talked about levying a lawsuit against CMS, either.
PQHH also said CMS should take the 4.36% cut out of the final pay rule. The group commissioned its own analysis of all 2020 Medicare claims data for home health agencies, which found that home health providers aren’t actually acting in the way CMS has assumed they would respond to PDGM. Medicare payments are 5.76% lower than budget neutrality would dictate, according to the PQHH-sponsored analysis. Because of this, even the 4.36% behavioral adjustment isn’t justified, PQHH said.
“CMS’ authority to make and adjust for assumptions about provider behavior does not include using this mechanism to generate program savings, which appears to be the effect of the proposed rule,” PQHH said in its comment letter.
The one change to the PDGM that CMS does suggest for 2022 is recalibrating case mix weights based on 2020 data. CMS said this would better reflect PDGM utilization than the current weights, which were set using claims data from the old system.
But NAHC and PQHH are adamant that CMS should not make this change, since utilization data from the beginning of the COVID-19 pandemic likely won’t be comparable to how home health is used in 2022.