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Final Medicare Rule Cuts CHHA Rates, Delays Major Rate-Setting Overhaul

While home health agencies will see a decrease in their 2018 Medicare rates that is expected to reduce nationwide payments by $80 million, the Centers for Medicare and Medicaid Services (CMS) did not adopt a proposal that would have slashed rates by an estimated $950 million in 2019. In the Home Health Prospective Payment System (HH PPS) Final Rule published Tues., Nov. 7th, CMS notes that it is not finalizing the implementation of the Home Health Groupings Model (HHGM) pending further consideration of the many comments it received. LeadingAge and LeadingAge NY submitted comments in opposition and are pleased that the harmful provision is on hold.

Rate updates finalized in the rule result in a projected net decrease of 0.4 percent and include:

  • a 1 percent home health market basket (inflation) update ($190 million increase);
  • a 0.97 percent decrease to the national, standardized 60-day episode payment rate to account for case-mix growth ($170 million decrease); and
  • a 0.5 percent cut that eliminates the rural add-on provision ($100 million decrease).

Note that the calculated market basket increase for 2018 was 1.9 percent, but a provision in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) required this year’s increase to be limited to 1 percent for most post-acute care providers. The final rule also finalizes updates to the wage index. Because updates to regional wage indexes are not uniform, some providers will see a rate decrease that is worse than the average 0.4 percent drop, while others will experience a change that is not as bad as the 0.4 percent decrease.

CMS also uses the PPS rule to make updates to the HH Quality Reporting Program (HH QRP), which seeks to standardize reporting across different care settings pursuant to the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014 and the HH Value Based Payment (HH VBP) program that operates in nine states (not New York). In the final rule, CMS drops one VBP measure, adds two QRP measures, and makes changes to data elements used in the calculations.

LeadingAge is analyzing the final rule and will provide additional details shortly. The text of the rule is posted here, and the CMS announcement is available here.

Contact: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841