The final CMS calendar year (CY) 2018 Medicare home health prospective payment system (HH PPS) rule cuts Medicare payments by 0.4% ($80 million) in 2018 compared to 2017 levels, but CMS did not adopt a more sweeping case mix methodology reform proposal that would have reduced 2019 payments by almost $1 billion.

Under the final rule, CMS applied a 1% update percentage as mandated by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) for those home health agencies (HHAs) that report required quality data (otherwise the update is decreased by 2 percentage points). This positive update was more than offset by other rate adjustments, however, including a 0.5% reduction due to the sunset of the rural add-on provision and a 0.9% reduction for nominal case-mix coding intensity growth (the last year of a three-year phase in period).  The final CY 2018 national, standardized 60-day episode payment rate is $3,039.64, compared to $2,989.97 for 2017; the rate for an HHA that does not submit required quality data is $2,979.45.

As part of the Administration’s recent “Patients Over Paperwork” Initiative, the final rule removed 235 data elements from 33 Outcome and Assessment Information Set (OASIS) assessment instrument items, effective January 1, 2019.  CMS also finalized various Home Health Quality Reporting Program refinements involving reconsideration and exception requests and extensions of reporting timeframes.  CMS estimates that these provisions will decrease costs for all HHAs by more than $145 million annually.  The final rule also, among other things:  recalibrated HH PPS case-mix weights; updated the CY 2018 home health wage index using FY 2014 hospital cost report data; and refined requirements under the Home Health Value-Based Purchasing Model.

As previously reported, CMS had considered adopting a new Home Health Groupings Model to focus on clinical characteristics and other patient information rather than the number of therapy visits provided to determine payment, beginning in 2019.  CMS did not finalize this proposal, however, in order to take into further consideration public comments regarding the proposal.  CMS intends “to further engage with stakeholders to move towards a system that shifts the focus from volume of services to a more patient-centered model.”