The Centers for Medicare & Medicaid Services today released the proposed rule for the home health prospective payment system for calendar year 2018, which also proposes major HH PPS refinements for CY 2019. For CY 2018, the rule would decrease net HH payments by 0.4 percentage point, or $80 million, relative to CY 2017. This includes a 1.0% update to current rates, as mandated by the Medicare Access and CHIP Reauthorization Act of 2015; a 0.5% reduction due to the sunset of the rural payment add-on; and the third and final 0.97 percentage point cut for estimated case mix growth from CYs 2012 through 2014 that the agency states was unrelated to increases in patient acuity. In addition, CMS proposes a major modification to the PPS effective Jan. 1, 2019. Specifically, it would implement a new case-mix methodology, called the home health groupings model, and reduce the unit of payment from a 60-day to a 30-day episode of care. The proposed HHGM would rely on clinical characteristics and other patient information, rather than the current therapy service-use thresholds, to set payments. The HHGM model includes changes in the episode timing categories, the addition of an admission source category, the creation of six clinical groups used to categorize patients based on their primary reason for HH care, revised functional levels and patient assessment items, the addition of a comorbidity adjustment, and a proposed change to low utilization payment adjustments. The rule presents two fiscal impact estimates that reflect possible payment policy scenarios that CMS may pursue in upcoming rulemaking, which would reduce total payments by either 4.3% or 2.2% ($950 or $480 million, respectively). Under these scenarios, hospital-based agencies fare better, with either a 0.0% or +2.2% change, due to their distinct case-mix profile. CMS also proposes a few changes to the HH Value-Based Purchasing program by raising the minimum number of cases required and removing one measure from the program. For the HH Quality Reporting Program, CMS proposes to adopt two new measures while removing 247 data elements from 35 OASIS items. As with the other post-acute proposed rules, CMS also proposes the addition of standardized patient assessment data to the program, and the agency proposes to introduce an extraordinary circumstances exemption process for HH agencies beginning in CY 2019. AHA members will receive a Special Bulletin with more information. CMS will accept comments on the proposed rule through Sept. 25.

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