Update: About the time I was clicking “publish” for the original note below, CMS was sending the CY 2018 Home Health payment update to the White House to join the other proposals. The payment update is pretty much a non-event because of the congressionally mandated rate of 1 percent in 2018.
However, the big question is whether or not CMS will propose a shift to a new payment model called the Home Health Groupings Model.
Policy makers have long complained that the Home Health Prospective Payment System encourages the delivery of therapy services regardless of patient characteristics. Over the years, CMS and Congress have attempted to reduce reimbursement only to be met by margin protection through increased therapy utilization. In 2015, CMS conducted research on possible alternative payment models for home health services. The analysis yielded three possibilities as alternatives to the current Home Health Prospective Payment System, including the Home Health Groupings Model as disclosed in the CY 2016 annual payment rule.
In the CY 2017 payment update, CMS expanded on 2016’s disclosure with more information on the HHGM. The features of this alternative model would include:
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30-day episodes of care instead of the current 60 days
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Each episode would then be classified into subgroups based on five different categories: timing, referral source, clinical grouping, functional/cognitive level and comorbidities, yielding 324 possible payment groupings
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Each payment grouping would be further classified into clinical groups: Musculoskeletal Rehabilitation; Neuro/Stroke Rehabilitation; Wound Care; Medication, Management, Teaching and Assessment (MMTA); Behavioral Health Care; and Complex Medical Care.
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Each episode would have a functional/cognitive designation that estimated resource use
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Lastly, the payment grouping would include a designation for comorbid conditions, if any, that further refined resource needs
Since the 2017 rule was released, CMS has held an Open Door Forum on the HHGM (when precisely zero questions were asked by attendees) and issued a promised Technical Report. Time is a precious resource in government and the fact that CMS is spending a good deal of it on HHGM suggests its implementation is a matter of when not whether.
Like the ESRD payment update, it is a little early for the CY 2018 Home Health rule. We are not sure it is material as the rate is set at a 1 percent increase but the departure from routine is worth mentioning.
Original Note: That spring ritual of updating Medicare payment rates to providers has begun. In the last several weeks, CMS has sent to the White House for approval the following payment updates:
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Acute Care Inpatient Hospitals
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Long Term Care Hospitals
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Inpatient Rehabilitation Facilities
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Skilled Nursing Facilities
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Hospice Agencies
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Outpatient Dialysis Facilities
As we mentioned a few weeks ago, the payment updates for the post-acute areas of SNFs, IRFs, LTCHs and Hospice are subject to a congressionally mandated 1 percent. That leaves the payment rules for acute care inpatient hospitals and end stage renal disease more or less subject to the standard payment update procedure.
Inpatient Acute Care Hospitals.
As far as Medicare payments go, inpatient acute care hospitals are coming out of the woods. The $11 billion in documentation and coding adjustment mandated by Congress will sunset in FY 2017. In FY 2018, a 0.5 percent increase mandated by MACRA becomes effective bringing to an end the sub-1 percent annual Medicare updates for inpatient hospitals.
Outpatient Dialysis Treatment.
Curiously, CMS has sent to the White House the CY 2018 ESRD annual update early this year. This payment rule usually does not appear until early summer. The implication of this early start is that CMS will have to rely on the Q4 2016 forecast for the MFP and market basket updates instead of the Q1 2017. The difference is probably not material but it is a different schedule than we are used to.
For all payment rules, the more interesting aspect will be policy inquiries. In the Medicare Advantage call letter issued last week, CMS included an RFI for ideas to improve the program including requests for ideas on benefit design, operational or network composition flexibility, support for doctor-patient relationship in care delivery and facilitation of individual preferences. The MA RFI follows two letters to America's Governors asking them to submit Medicaid payment and delivery innovations via Section 1332 and Section 1115 waivers.
The posture of the administration is one of openness and collaboration with various health care constituencies as a way of distinguishing themselves from the previous administration whose regulatory initiatives often left the health care industry scratching its head. The rule making season that typically begins this month, will provide ample opportunity to the Trump administration to roll back regulations and implement new policies.
In other words, the headline numbers for payment adjustments probably won’t be as interesting as the policy initiatives/inquiries/trial balloons.
Call with questions. We always here reading the fine print so you don’t have to.
Emily Evans
Managing Director
Health Policy
@HedgeyeEEvans
