Value-based Payments Pilot Likely for Home Health Agencies

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Karen Utterback By Karen Utterback 
Former Vice President, Product Marketing and Strategy, McKesson (Retired)
Value-based Payments Pilot Likely for Home Health Agencies

Changes to the Medicare home health prospective payment system (HH PPS) for calendar year 2015 offer both challenges and opportunities for agency executives.

One of the most exciting opportunities announced by the Centers for Medicare & Medicaid Services (CMS) is a closer look at bringing value-based purchasing (VBP) to home health. CMS received comments on the proposal this year and may begin pilots in calendar year 2016.

Value-based purchasing ties a percentage of reimbursement to care quality metrics. VBP already is being used in hospitals, tying 1.5% of payments to quality metrics. Performance payments will rise to 2% in 2017.

Under the home health proposal, payment adjustments of 5% to 8% are being considered for designated performance periods in the states selected to pilot the program, and CMS anticipates working with five to eight states. If CMS decides to move forward, it will seek additional comments before any pilot programs begin.

This represents an opportunity for home health organizations to demonstrate how home-based care helps patients. And since these will be state-based pilots, organization directors and clinical directors should be reaching out to local, state and regional partners soon if they want to be involved. It also points out the importance of agency and clinical management software solutions to track quality metrics and help an organization understand its true costs.

Value-based purchasing also is exciting because the overall Medicare reimbursement picture remains troubling. The final rule reduces overall reimbursement by $60 million, which doesn’t include the 2% sequestration cuts that remain in effect until March 2015.

Other facets of the HH PPS final rule include:

  • Eliminating the physician narrative requirement for face-to-face encounters. Physicians still need to certify and document a date that an encounter occurred as part of the eligibility requirement. If a home health claim is denied, the corresponding physician claim for certification or recertification also would be denied. CMS clarified that face-to-face encounters are required for certifications and not necessarily initial episodes. Certifications are generally considered to be when start-of-care assessments are conducted.
  • Moving to 30-day reassessments, rather than on the 13th and 19th visits, and requiring that a qualified therapist (as opposed to an assistant) conduct the reassessment.
  • Setting a 70% compliance threshold for agencies to submit Outcome and Assessment Information Set (OASIS) admission and discharge assessments. CMS is moving toward a 90% compliance threshold over the next two years.
  • Revising standards for speech language pathologists, deferring in most cases to state licensing requirements.

To discover more opportunities in today’s home health regulatory environment, download this e-book.

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