Home Health Sector Glad CMS Has Not Refined Wage Adjustment Method
Home health care providers see CMS’s decision not to finalize the budget-neutral payment system for home health agencies as a victory, although they remain disappointed that CMS decided to move forward with a 4.36% cut in its third year of existence. final payment rule 2022.
Last year, CMS launched a patient-centered grouping model for home health agencies, aiming to reduce unnecessary treatments and emphasize patient characteristics instead. PDGM also changed the case mixing system and switched to cost recovery agencies based on 30-day periods.
The agency speculated that the new system would force providers to change their coding methods so that they could register the highest paying codes. CMS decided to cut payments by 4.36% in order to adjust the anticipated behavior change so that the payment system does not change the overall budget.
Joanne Cunningham, executive director of the Partnership for Quality Home Care Services, said Tuesday’s 2022 Home Health Care Payment Rule will keep wage cuts for another year, which continues to worry health care providers. Cunningham said a study commissioned by PQHH earlier this year found the cut was unwarranted and that payments should be increased to achieve fiscal neutrality.
This is particularly troubling, Cunningham said, given the current health workforce and other COVID-19 issues that continue to affect home health care facilities.
The 4.36% cut does not fully explain the staffing problems, but it does affect them, added Bill Dombey, president of the National Association for Home Care and Hospice. “We want to keep a close eye on what’s going on because the administrative costs, the operating costs — everything — are already cut to the bone, so we just hope they don’t cut things like patient care because of this.”
CMS’s proposed forward-looking payments for home health care for 2022 also solicited feedback on a proposed method for analyzing future behavioral adjustments. The method involved using data from 30-day periods throughout 2020 to simulate 60-day episodes – the pre-PDGM payment standard – to figure out how payments would look according to the old model. According to CMS, the analysis found that the baseline pay for home care agencies in 2020 was 6% higher than it should have been.
Service providers, including PQHH, NAHC and the American Hospital Association, disagreed with the method proposed by CMS and said it would lead to inappropriate and dramatic reductions in future payments. In commenting on the proposed rule, the NAHC suggested that CMS’s idea of finding out whether PDGM spending is budget neutral is against Medicare because it relates to weight changes in case structure rather than anticipated behavioral changes.
However, the Medicare Payment Advisory Commission stated in the comments that the proposed method is appropriate.
CMS acknowledged in the final that most commentators disagree with the proposed methodology and said it will consider other approaches when developing rules in the future.
While NAHC President Bill Dombey would like CMS to change the cut to 4.36%, his willingness to learn other methods is a positive result for home health agencies, he said.
“We really think that the right methodology will show underpayment, not overpayment. But, you know, as a middle ground between getting what we asked for and the risk of the CMS going deeper, we agree on where we ended up so far, “Dombey said.
Dombey did not expect CMS to finalize its methodology this year, but he did expect the agency to present a stronger defense for its proposal in the final rule, he said.
Since the CMS did not finalize the method in the final rule, Dombey is not worried about the legal issues raised by the NAHC in their comments.
However, the CMS’s reaction to comments on the proposed rule “did not leave me feeling that either they fully understood what we were talking about or felt they needed to respond to the comments in one way or another,” Dombey said.
Both Dombey and Cunningham said their organizations plan to continue meeting with the CMS on how best to define behavioral pay adjustments ahead of the proposed rule next year.
“To be honest, I think they appreciate the discussion,” Cunningham said. “We will continue to try to be a collaborative partner and share all the analysis that our data scientists do, and, as you know, eventually there will be a rate reconciliation at some point – that’s a charter requirement. So, you know, let’s see how it goes. “