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CMS Proposed Rule Risks Stability of Home Health Care

CMS Proposed Rule Risks Stability of Home Health Care


Courtesy of the National Association for Home Care & Hospice (NAHC)

On June 17, 2022, the Centers for Medicare & Medicaid Services (CMS) issued a 175-page proposed rule that includes:

  • Routine updates to the Medicare Home Health Prospective Payment System (PPS) and home infusion therapy services payment rates for Calendar Year (CY) 2023;
  • Permanent prospective payment adjustment to the home health 30-day period payment rate; and
  • Requests for input on how best to implement a temporary payment adjustment for CYs 2020 and 2021, and collecting telehealth data on home health claims.

Click here to view the CMS fact sheet on the proposal. Click here to download an analysis presentation commissioned by The Partnership for Quality Home Healthcare.

The proposed rule would reduce payment rates by 4.2%, or $810 million less than 2022 rates. Home Health Care News' Andrew Donald summarized it well in his reporting on the proposed rule: "Overall, the proposed rule looks to be one that will be disappointing to providers, and one they will refute heavily in the public comment period." Public comments are due no later than 5:00 PM ET on August 16, 2022. Instructions on how to submit comments are provided at the end of this article.

Overall, the rule presents serious concerns for the home health community as it includes significant proposed rate reductions to account for the change in the payment model in 2020. Medicare requires CMS to make permanent and temporary adjustments intended to ensure that the transition to the Patient-Driven Groupings Model (PDGM) payment system is budget neutral in comparison to expected Medicare spending on the 2019 payment model. The outcome of the CMS analysis of the impact of the new payment model is a proposed 7.69% permanent rate adjustment based on the conclusion that home health agencies were overpaid in 2020 and 2021 due to provider behavior changes in coding.

The proposed rule includes the following:

  • Net 2.9% inflation update (3.3% market basket index minus 0.4% productivity adjustment). This is a strikingly low inflation update given that current inflation is at a 20-year high, nearing double digits.
  • 7.69% budget neutrality adjustment allegedly related to provider behavior changes triggered by the PDGM.
  • An alleged $2 billion overpayment in 2020 and 2021. CMS proposed withholding any adjustment at this time to reconcile the alleged overpayment.
  • Recalibration of the 432 case-mix weights. Recalibration has been done annually to account for changes in case-specific resource and cost changes.
  • Modification of the Low Utilization Payment Adjustment (LUPA) thresholds.
  • Institution of a 5% cap on negative changes in the area-specific wage index. CMS originally applied a 5% negative change cap in 2021 with the new wage index. The cap was not applied in 2022. CMS now proposes to apply a cap prospectively on a permanent basis to prevent provider financial instability. However, certain areas had significant declines in their wage index in 2022 without the protection of a 5% cap. CMS does not propose to protect these providers for 2022 despite providing that protection to inpatient hospitals.

The outcome of these payment rate changes on 30-day period base rates and per-visit LUPA rates is as follows. Home health agencies that failed to provide required quality data have these rates reduced by 2%.


CY 2022 National Standardized 30-Day Period PaymentPermanent Behavioral Adjustment FactorCase-Mix Weights Budget Neutrality FactorWage Index Budget Neutrality FactorCY 2023 Home Health Payment UpdateCY 2023 National, Standardized 30-Day Period Payment


Home Health DisciplineCY 2022 Per-Visit Payment AmountWage Index Budget Neutrality FactorCY 2023 Home Health Payment UpdateCY 2023 Per-Visit Payment Amount
Home health aide$71.040.99921.029$73.04
Medical social services$251.480.99921.029$258.57
Occupational therapy$172.670.99921.029$177.54
Physical therapy$171.490.99921.029$176.32
Skilled nursing$156.900.99921.029$161.32
Speech-language pathology$186.410.99921.029$191.66

Other proposals in the rule include:

  • A request for information (RFI) regarding data collection on the use of telecommunications;
  • Modified HHQRP measures;
  • Modified elements of the upcoming Home Health Value-Based Purchasing (HHVBP) Demonstration program;
  • Deferring the home infusion therapy benefit rate update to the physician fee schedule issuance;
  • Future collection of data regarding the use of telecommunications technology during a 30-day home health period of care on home health claims;
  • Changes to the HHQRP requirements;
  • An RFI about health equity in the HHQRP;
  • Updates on advancing health information exchange.

HHQRP and Submission of OASIS Data for All Payers

CMS proposes to codify in regulations the factors adopted in the CY 2019 Home Health PPS final rule as the factors that will be considered when determining whether to remove measures from the HHQRP measure set. As a reminder, these factors are:

  1. Measure performance among home health agencies is so high and unvarying that meaningful distinctions in improvements in performance can no longer be made.
  2. Performance or improvement on a measure does not result in better patient outcomes.
  3. A measure does not align with current clinical guidelines or practice.
  4. A more broadly applicable measure (across settings, populations, or conditions) for the particular topic is available.
  5. A measure that is more proximal in time to desired patient outcomes for the particular topic is available.
  6. A measure that is more strongly associated with desired patient outcomes for the particular topic is available.
  7. Collection or public reporting of a measure leads to negative unintended consequences other than patient harm.
  8. The costs associated with a measure outweigh the benefit of its continued use in the program.

CMS is proposing to end the suspension of the collection of Outcome and Assessment Information Set (OASIS) data on non-Medicare and non-Medicaid patients and to require providers to report all-payer OASIS data for purposes of the HHQRP for CY 2025. Specifically, for the CY 2025 HHQRP, expanded reporting would be required for patients discharged between January 1, 2024, and June 30, 2024. Beginning with the CY 2026 HHQRP, providers would be required to report assessment-based quality measure data and standardized patient assessment data on all patients, regardless of payer, for the applicable 12-month performance period (which, for the CY 2026 program, applies to patients discharged between July 1, 2024, and June 30, 2025).

Collecting OASIS data on all home health agency patients regardless of payer would align data collection requirements under the HHQRP with the data collection requirements for the Long-Term Care Hospital (LTCH) QRP and Hospice QRP. CMS indicated that it believes the most accurate representation of the quality of care furnished by home health agencies is best captured by calculating the assessment-based measures rates using OASIS data submitted on all home health agency patients regardless of payer; new risk adjustment models with all-payer data would better represent the full spectrum of patients receiving skilled care in home health agencies; and the submission of all-payer OASIS data would also enable CMS to meaningfully compare performance on quality measures across post-acute care (PAC) settings. For example, "Changes in Skin Integrity Post-Acute Care" is currently reported by different PAC payers on different denominators of payer populations, and not having this for home health greatly inhibits CMS’ ability to compare performance on this measure across PAC settings. Standardizing the denominator for cross-setting PAC measures to include all patients will enable to CMS to make these comparisons. CMS has implemented the Quality Improvement and Evaluation System (QIES) and Internet Quality Improvement and Education System (iQIES) provider data reporting systems to securely transfer and manage assessment data across QRPs, including home health. CMS systems can now support an extensive range of provider reports, including case-mix reports for private pay patients.

CMS has been laying the groundwork for the resumption of all-payer data submission for a while now by soliciting comments on such a change through proposed home health rules in recent years. Concerns raised in these comments include increased burden from requiring all-payer data submissions and appropriateness of collection and reporting private pay data among other concerns while some commenters supported the expanded collection. CMS believes the concerns raised have now been addressed and CMS systems are ready to support and utilize OASIS data for all payers. CMS stated that it appreciates that submitting OASIS data on all home health agency patients regardless of payer source may create an additional burden for providers, but also noted that the current practice of separating and submitting OASIS data on only Medicare beneficiaries has clinical and workflow implications with an associated burden. And, based on comments submitted in prior years’ proposed rules, CMS understands that it is common practice for home health agencies to collect OASIS data on all patients, regardless of payer source.

Comment Solicitation on the Collection of Data on the Use of Telecommunications Technology Under the Medicare Home Health Benefit

Data on the use of telecommunications technology during a 30-day period of care at the beneficiary level is not collected on the home health claim; however, the provision of services furnished via a telecommunications system must be included in the patient’s plan of care. The plan of care (POC) must also describe how the use of such technology is tied to the patient-specific needs as identified in the comprehensive assessment and will help to achieve the goals outlined in the POC and these services cannot substitute for a home visit ordered as part of the POC and cannot be considered a home visit for the purposes of patient eligibility or payment. And, CMS does not review plans of care for information on telecommunications visits. Therefore, currently, the collection of data on the use of telecommunications technology is limited to overall cost data on a broad category of telecommunications services as a part of a home health agency's allowable administrative costs on the agency's Medicare cost report.

CMS is proposing to change this by establishing three new G-codes for use on home health claims to capture home health services delivered via telecommunications. CMS reiterates that the collection of information on the use of telecommunications technology does not mean that such services are considered “visits” for purposes of eligibility or payment, such data will not be used or factored into case-mix weights, or count towards outlier payments or the LUPA threshold per payment period. Collecting this type of data on home health claims would allow CMS to analyze the characteristics of the beneficiaries utilizing services furnished remotely, and would give CMS an understanding of the social determinants that affect who benefits most from these services, including what barriers may potentially exist for certain subsets of beneficiaries. In its March 2022 report to Congress, the Medicare Payment Advisory Commission (MedPAC) recommended tracking the use of telehealth in the home health care benefit on home health claims to improve payment accuracy.

CMS would establish G-codes for identifying when home health services are furnished using:

  • Synchronous telemedicine rendered via a real-time two-way audio and video telecommunications system;
  • Synchronous telemedicine rendered via telephone or other real-time interactive audio-only telecommunications system; and
  • The collection of physiologic data that is digitally stored and/or transmitted by the patient to the home health agency (remote patient monitoring). CMS would capture the utilization of remote patient monitoring through the inclusion of the start date of the remote patient monitoring and the number of units indicated on the claim which may help CMS to understand in general how long remote monitoring is used for individual patients and for which conditions.

Data collection using the G-codes would begin voluntarily by January 1, 2023, and become mandatory on claims by July 2023.

Relative to the use of telecommunications technology and collection of such data, CMS is interested in comments on:

  • Whether there are other common uses of telecommunications technology under the home health benefit that would warrant additional G-codes that would be helpful in tracking the use of such technology in the provision of care.
  • The appropriateness of such technology for particular services in order to more clearly delineate when the use of such technology is appropriate. This may help inform how CMS’ uses this analysis, for instance, connecting how such technology is impacting the provision of care to certain beneficiaries, costs, quality, and outcomes, and determine if further requirements surrounding the use of telecommunications technology are needed.
  • Whether the codes should differentiate the type of clinician performing the service via telecommunications technology, such as a therapist versus a therapist assistant; and
  • Whether new G-codes should differentiate the type of service being performed through the use of telecommunications technology, such as skilled nursing services performed for care plan oversight (e.g., management and evaluation or observation and assessment) versus teaching, or physical therapy services performed for the establishment or performance of a maintenance program versus other restorative physical therapy services.

CMS indicated it would provide additional details of the G-codes with sufficient notice to enable home health agencies to make the necessary changes in their electronic health records and billing systems. CMS also stated it would issue further program instruction prior to July 1, 2023, if the G-code description changes between January 1 and July 1 based on the comments to this proposed rule.

RFI on Health Equity in the HHQRP

CMS is working to advance health equity by designing, implementing, and operationalizing policies and programs that support health for all the people served by CMS programs, eliminating avoidable differences in health outcomes experienced by people who are disadvantaged or underserved, and providing the care and support that enrollees need to thrive.

In last year’s home health rule, CMS sought and received comments regarding health equity. The comments were supportive of gathering standardized patient assessment data elements and additional social determinants of health (SDOH) data to improve health equity. Many commenters shared that relevant data collection and appropriate stratification are very important in addressing any health equity gaps. These commenters noted that CMS should consider the potential stratification of health outcomes. Stakeholders, including providers, also shared their strategies for addressing health disparities, noting that this was an important commitment for many health provider organizations. Commenters also shared recommendations for additional SDOH data elements that could strengthen their assessment of disparities and issues of health equity.

As CMS continues to consider health equity within the HHQRP, it is soliciting public comment on the following questions:

  1. What efforts does your agency employ to recruit staff, volunteers, and board members from diverse populations to represent and serve underserved populations? How does your agency attempt to bridge any cultural gaps between your personnel and beneficiaries/clients? How does your agency measure whether this has an impact on health equity?
  2. How does your agency currently identify barriers to access in your community or service area?
  3. What are barriers to collecting data related to disparities, SDOH, and equity? What steps does your agency take to address these barriers?
  4. How does your agency self-report data such as race/ethnicity, veteran status, socioeconomic status, housing, food security, access to interpreter services, caregiving status, and marital status used to inform its health equity initiatives?
  5. How is your agency using qualitative data collection and analysis methods to measure the impact of its health equity initiatives?

In addition, CMS is considering a structural composite measure for use in the HHQRP. The composite structural measure concept could include home health reported data on organizational activities to address underserved populations’ access to home health care. For example, an agency could receive a point for each domain where data are submitted to a CMS portal, regardless of the agency's action in that domain (e.g., reporting whether or not the agency provided training for board members, leaders, staff, and volunteers in culturally and linguistically appropriate services, health equity, and implicit bias). The data could reflect the agency's completed actions for each corresponding domain (for a total of three points) in a reporting year. An agency could submit information such as documentation, examples, or narratives to qualify for the measure numerator. CMS is seeking comment on how to score a domain for an agency that submitted data reflecting no actions or partial actions in the given domain. Examples of the domains CMS is considering are described below.

CMS seeks comments on each of these domains, including specific suggestions on items that should be added, removed, or revised. Furthermore, CMS is soliciting public comments on publicly reporting a composite structural health equity quality measure; displaying descriptive information on Care Compare from the data agencies provide to support health equity measures; and the impact of the domains and quality measure concepts on organizational culture change.

  • Domain 1:Home health agencies' commitment to reducing disparities is strengthened when equity is a key organizational priority. Candidate domain 1 could be satisfied if an agency submits data on actions it is taking with respect to health equity and community engagement in its strategic plan. Agencies could report data in the reporting year about their actions in each of the following areas, and submission of data for all elements could be required to qualify for the measure numerator.
    • Agencies attest to whether their strategic plan includes approaches to address health equity in the reporting year.
    • Agencies report community engagement and key stakeholder activities in the reporting year.
    • Agencies report on any attempts to measure input from patients and caregivers about care disparities they may experience and recommendations or suggestions.
  • Domain 2:Training board members and staff in culturally and linguistically appropriate services (CLAS), health equity, and implicit bias is an important step that agencies take to provide quality care to diverse populations. Candidate domain 2 could focus on home health agencies' diversity, equity, inclusion, and CLAS training for board members and staff by capturing the following self-reported actions in the reporting year. Submission of relevant data for all elements could be required to qualify for the measure numerator.
    • Agencies attest as to whether their employed staff was trained in culturally-sensitive care mindful of SDOH in the reporting year and report data relevant to this training, such as documentation of specific training programs or training requirements.
    • Agencies attest as to whether they provided resources to staff about health equity, SDOH, and equity initiatives in the reporting year and report data such as the materials provided or other documentation of the learning opportunities.
  • Domain 3:Home health agency leaders and staff can improve their capacity to address health disparities by demonstrating routine and thorough attention to equity and setting an organizational culture of equity. This candidate domain could capture activities related to organizational inclusion initiatives and the capacity to promote health equity. Examples of equity-focused factors include proficiency in languages other than English, experience working with diverse populations in the service area, and experience working with individuals with disabilities. Submission of relevant data for all elements could be required to qualify for the measure numerator.
    • Agencies attest as to whether they considered equity-focused factors in the hiring of senior leadership, including chief executives and board of trustees, in the applicable reporting year.
    • Agencies attest as to whether equity-focused factors were included in the hiring of direct patient care staff (e.g., therapists, nurses, social workers, physicians, or aides) in the applicable reporting year.
    • Agencies attest as to whether equity-focused factors were included in the hiring of indirect care or support staff (e.g., administrative, clerical, or human resources) in the applicable reporting year.

This same RFI was also in the CY 2023 proposed rule for hospice providers.

Advancing Health Information Exchange

While there were no proposals related to health information exchange, CMS provided a summary of the Department of Health and Human Services’ (HHS) initiatives designed to encourage and support the adoption of interoperable health information technology and to promote nationwide health information exchange to improve health care and patient access to their digital health information.

With respect to the HHVBP expansion, CMS continues to estimate that it will save over $3 billion in Medicare spending over its term through reduced hospitalizations. It is hard to imagine that outcome given the multi-billion-dollar reduction in payment rates over that same term which undoubtedly will reduce the ability of home health agencies to employ improved care.

“Medicare spending in 2020 and 2021 was less than spending in 2016 through 2019," said National Association for Home Care & Hospice (NAHC) President Bill Dombi. "How that outcome squares with CMS’s calculation that agencies were overpaid by 7.69% strains credulity. While we hoped that [the] PDGM was an improved payment model, it sure looks like we would have had a fairer payment system without it."

How to Submit Comments

CMS welcomes comments on the proposal, which are due no later than 5:00 PM ET on August 16, 2022. In commenting, please refer to file code CMS-1766-P. Comments must be submitted in one of the following three ways.

  • ELECTRONICALLY: You may submit electronic comments via the Federal Register website by following the "Submit a comment" instructions.
  • BY MAIL: You may send comments by regular mail to the following address only. Please allow sufficient time for mailed comments to be received before the close of the comment period.

Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS-1766-P
P.O. Box 8013
Baltimore, MD 21244-8013

  • BY EXPRESS OR OVERNIGHT MAIL: You may expedite comments by mail to the following address only.

Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS-1766-P
Mail Stop C4-26-05
7500 Security Boulevard
Baltimore, MD 21244-1850  

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