If you’ve been keeping up with the latest in the home health industry this year, you’ve most definitely heard the term Home Health Groupings Model (HHGM) floating around at one point or another. Since the introduction of the home health prospective payment reimbursement model, the HHGM is a significant and controversial proposal, shaking up the home health industry.

So what does this new payment model proposal mean for you, your organization and the industry? In this three-part blog series, we’ll explore what HHGM is and what it entails, the impact and reaction from the home health industry as well as what it means for the future of home health.

During the summer of 2017, the Centers for Medicare and Medicaid Services (CMS) shook up the home health industry and unveiled the HHGM while proposing updated payment rates and wage indexes for calendar year (CY) 2018.  Due to take full effect in CY 2019, the redesigned payment system is expected to uphold CMS’s desire to move from reimbursement for quantity to reimbursement to quality of care by removing therapy visits as a factor in payment determinations. Additionally, CMS wants to make a shift toward compensating complicated, higher acuity cases more appropriately.

Many home health providers deliver therapy visits as a core portion of the 60-day plan of care. Changes to the payment implications based on therapy need, the reduction to a 30-day episode, and other areas of the payment model worry providers about their long-term stability.

Significant changes to the current payment model include:

  • Modifications to episode timing categories
  • Addition of an admission source category
  • Six new clinical groups to categorize 30-day periods of care based on the patient’s primary reason for home healthcare
  • Revised functional levels and corresponding OASIS items
  • The addition of a comorbidity adjustment
  • Proposed change in the Low-Utilization Payment Adjustment (LUPA) threshold

The rule is a complete turnaround from what was originally proposed at the beginning of 2017, creating a feeling of frustration within the industry. CMS holds firm that the HHGM rule is in alignment with broader goals to help alleviate provider stress, support the relationship between patients and doctors, as well as promote clarity, flexibility and advancement in care delivery.

Beyond the HHGM, there are additional factors going on in home health reimbursement that are expected to add additional strain to financial worries:

  • Providers will begin to see a small decrease in payments in the short-term with HHGM. A 0.4 percent decrease in payments to home health providers will begin in 2018, reducing CMS payments to providers by $80 million.
  • Per the Home Health Quality Reporting Program, home health groups who fail to submit quality reporting data for CY2018, as required by the Secretary of Health and Human Services, will lose two percent in the home health update percentage.
  • As the final year of a three-year plan to reduce payments to account for a nominal case-mix growth in previous years, CMS will apply a 0.97 percent reduction to the national, standardized 60-day episode rate in CY 2018. This adjustment is expected to result in an estimated decrease in HH PPS payments for CY 2018 of 0.9 percent.
  • The Rural Add-on Provision will end for all episodes and visits before January 1, 2018, per the original approved MACRA plan, reducing payments for rural home health services.
  • CMS is currently exploring phasing out the split percentage payment approach in the future order to refine-case mix adjustments in CY 2019. Changes brought about by the HHGM may change the need for a split percentage payment.

Between the proposed HHGM and other reimbursement reductions forecasted for the future, there’s no doubt of the concern and nervousness in the home health community. Working with limited resources already, the proposed changes are surfacing a lot of stress and concerns for many providers.

Join us next time for part two of our series where we’ll dive deeper into industry reactions to the new payment model and examine the impact that may result from the proposed changes or jump into our latest white paper here to explore more.