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Analysis of the Proposed Medicare Home Health Prospective Payment System (HH PPS) for 2018 Posted

As we previously reported, the Centers for Medicare and Medicaid Services (CMS) posted the proposed payment changes for the Medicare Home Health (HH) Prospective Payment System (PPS) for calendar year (CY) 2018 in the July 28th Federal Register.  CMS is proposing major changes that include a $950 million decrease in Medicare payments and in the methodology of how home health payments will be paid. They are proposing to change the unit of payment from 60-day episodes of care to 30-day periods of care. This proposed change is scheduled for CY 2019 under the Home Health Grouping Model (HHGM) and comprises approximately 30 percent of this proposed rule.

CMS is also proposing measures that equal a 0.4 percent decrease in total Medicare payments to Home Health Agencies (HHAs) for CY 2018. Nationally, total Medicare revenue would be reduced by approximately $80 million. The proposed decrease reflects the effects of a one percent home health payment update ($190 million increase); a -0.97 percent adjustment to the national, standardized 60-day episode payment rate to account for nominal case-mix growth resulting in a payment impact of -0.9 percent ($170 million decrease); and the sunset of the rural add-on provision ($100 million decrease). This differs from last year’s final HH PPS reduction of 0.7 percent or $130 million.

The proposed rule also proposes changes to the Home Health Value-Based Purchasing Model (HHVBP) and the Home Health Quality Reporting Program (HH QRP), as well as a Request for Information (RFI) for feedback on positive solutions for program simplification, flexibility, and innovation.

We have completed our analysis of the proposed HH PPS rule and will be joining other LeadingAge state affiliates to discuss the proposed changes. If you would like to be part of that discussion, please contact me.

Comments are due to CMS by 5:00 p.m. on Sept. 25, 2017.

Contact: Cheryl Udell, cudell@leadingageny.org, 518-867-8871