The Centers for Medicare & Medicaid Services’ (CMS) final calendar year 2019 Medicare home health prospective payment system (HH PPS) rule boosts rates by 2.2% next year and ushers in broader case-mix methodology reforms for 2020.

With regard to the 2019 update, the final rule increases HH PPS rates by 2.2% ($420 million) compared with 2018 levels.  The rate increase is based on a home health agency (HHA) market basket update of 3.0%, minus a 0.8 percentage point multifactor productivity adjustment, with a 0.1% increase tied to outlier payment spending and an offsetting 0.1% decrease stemming from a new statutory rural add-on classification policy.  The final 2019 national, standardized 60-day episode payment rate is $3,154.27, compared with the 2018 rate of $3,039.64; the rate for an HHA that does not submit required quality data is $3,092.55.

The final rule establishes a new temporary transitional payment for home infusion therapy services in 2019 and 2020, in advance of implementation of a new home infusion therapy benefit in 2021, as mandated by the 21st Century Cures Act.  This benefit covers professional services, including nursing services, patient training and education, and monitoring services associated with administering infusion drugs using an item of durable medical equipment in a patient’s home.  CMS defines “infusion drug administration calendar day” for purposes of the temporary transitional payment to mean the day on which home infusion therapy services are furnished by skilled professionals in the individual’s home on the day of infusion drug administration.  The skilled services provided on such day must be so inherently complex that they can only be safely and effectively performed by, or under the supervision of, professional or technical personnel.

CMS acknowledges stakeholder concerns regarding the scope of this definition, including criticism that the definition does not encompass professional services that may be provided outside of the home.  CMS intends to monitor the effects of the new definition on access to care; if warranted and within the limits of the agency’s statutory authority, CMS could engage in additional rulemaking or issue additional guidance regarding this definition.  CMS invites comments on its interpretation and its potential impact on access to care; comments will be accepted until December 31, 2018.  In a related policy, the final rule finalizes new safety and accreditation standards for home infusion therapy suppliers.

The final rule includes numerous other proposals impacting home health benefit and payment policies beginning in 2019.  For instance, the rule defines remote patient monitoring for the Medicare home health benefit and adds the cost of remote patient monitoring as an allowable HHA administrative cost.  The rule also eliminates the current requirement that the certifying physician must estimate how much longer skilled services will be needed when recertifying patient eligibility for home health care.  In addition, the final rule updates Home Health Quality Reporting Program policies, including removal of seven quality measures, and it modifies Home Health Value-Based Purchasing Model measures and the performance scoring methodology.

More sweeping changes to the HH PPS go into effect in 2020 under the final rule, as mandated by the Bipartisan Budget Act of 2018.  Specifically, the final rule implements a new “Patient-Driven Groupings Model” (PDGM) effective January 1, 2020, which is intended to base HHA reimbursement on patient clinical characteristics, rather than therapy service thresholds.  The model uses 30-day episodes of care, rather than the current 60-day episode, and will be implemented in a budget-neutral manner.  CMS intends to provide additional guidance and training to HHAs and other stakeholders, including through manual updates, articles, and provider calls, “to ensure a smooth transition between the current payment model and the PDGM.”