Home Health

PPS final rule reduces behavioral adjustments, moves forward with PDGM implementation for 2020

The 2020 PPS final rule, which was posted to the Federal Register October 31, reinforces the plan to implement the Patient-Driven Groupings Model (PDGM) on Jan. 1, 2020.

But CMS has eased off of plans to implement an 8.01% decrease in agencies’ payments due to changes it anticipates agencies will make in response to the new model.

Instead, the federal Medicare agency is finalizing a 4.36% decrease based on assumed behavioral changes “in order to calculate the 30-day payment rate in a budget-neutral manner for CY 2020.”

CMS assumes agencies will change documentation and coding practices to put the highest paying diagnosis code in the principal diagnosis slot to maximize payment, will include more secondary diagnoses in order to qualify for comorbidity adjustments and will provide extra visits to avoid low-utilization payment adjustments (LUPAs).

The 2020 final rule reiterates that PDGM will eliminate therapy thresholds as a factor in payment and move from a 60-day episode to a 30-day payment period.

PDGM will include 432 home health resource groups (HHRGs) and 12 clinical groups as finalized in the 2019 final rule.

Case-mix will be determined based on admission source (institutional or community setting), timing (early or late), clinical group, functional impairment level and comorbidity adjustment.

Clinical groups will be based on the primary diagnosis code. Comorbidity adjustments will fall into one of three categories: no, low or high.

Despite the fact that payment episodes under PDGM will be shorter than under the PPS, LUPAs still occur can occur. But unlike with the PPS, where a LUPA involves four or fewer visits during an episode, the threshold for the number of visits needed for an episode to be a LUPA under PDGM will vary.

Payments to rise in 2020

The home health industry is expected to see a 1.3% payment increase, or $250 million, next year, according to the final rule.

That increase was established as part of the Balanced Budget Act of 2018 (BBA). The increase would have been higher, but the BBA capped the payment update percentage at 1.5% with a 0.2% decrease because of rural add-on percentages.

By comparison, the 2019 PPS final rule increased agencies’ total reimbursement by 2.2%, or $420 million.

The final rule also:

  • Finalizes the addition of standardized patient assessment data elements (SPADEs).
  • Allows physical therapy assistants to furnish maintenance therapy.
  • Sets routine updates to the home infusion therapy payment rates for CY2020 and payment provisions for these services in CY2021 and future years.
  • Modifies payment regulations related to the content of the home health plan of care.
  • Makes changes to the value-based purchasing model.
  • Changes to the Home Health Quality Reporting Program.

Related link: View a PDF of the final rule at http://bit.ly/2WtUDMg. Look for more in-depth coverage in your upcoming DecisionHealth newsletter.