Home health agencies will see a significantly higher Medicare reimbursement rate in 2022 than previously expected and gain an extra year to prepare for the nationwide rollout of Home Health Value-Based Purchasing (HHVBP).
The pay increase and VBP implementation delay were the two biggest surprises in a final rule released Nov. 2 by the Centers for Medicare and Medicaid Services (CMS.) The final rule updates the Home Health Prospective Payment System for calendar year 2022.
“The final rule was released later than expected this year,” said SimiTree Managing Principal Nick Seabrook. “We don’t usually have to wait until November for CMS to issue it.”
Vaccine mandate for home health and hospice
There was industry speculation that this year’s rule was delayed due to the CMS vaccine mandate released just two days later. The CMS mandate applies to home health and hospice as well as other CMS-regulated entities.
The mandate was issued in the Medicare and Medicaid Programs; Omnibus COVID-19 Health Care Staff Vaccination interim final rule setting out COVID-19 vaccination requirements for participation in the Medicare program.
Read the interim final rule with vaccination requirements here.
A look at what’s in the home health rule
Here’s a quick rundown from the SimiTree Healthcare Consulting team on what’s in the 528-page final rule, and how it differs from what was set out in the rule proposed last summer:
- Value-Based Purchasing begins a year later.
CMS will roll out its HHVBP program nationwide as planned, but not as soon as expected. The first performance year for all agencies will be 2023 instead of 2022, and the data will impact payment adjustments in 2025.
VBP is a program designed to incentivize agency behavior with Medicare payment adjustments based on quality performance data. SimiTree consultants say the extra year will create a welcome opportunity for agencies to focus on improving areas which will impact performance scores.
“Under the proposed rule, the first performance year would have been 2022,” said SimiTree Financial Consulting Director Mike Simione. “The final rule delays that by a year, with 2022 serving as a pre-implementation year where agencies will be required to submit their quality data, but the 2022 quality data will not impact payment adjustments.”
VBP program will have a baseline year of 2019 to avoid using 2020 quality performance data, Simione said. Performance data from 2023 will be compared to baseline data to determine payment adjustments in 2025. The maximum payment adjustment will be +/-5%.
Learn more about what the VBP implementation means for your agency in a SimiTree blog post next week.
- Higher payment increase than initially proposed.
Home health providers will see higher Medicare reimbursement than expected in 2022, with a 3.2 percent ($570 million) increase in total home health Medicare spending set out in the final rule.
“This represents a notable increase from the proposed rule, which included a 1.8 percent ($310 million) Medicare payment increase for 2022,” said SimiTree Financial Consulting Director Brian Harris.
The Medicare base rate will rise from $1,901.12 to $2,031.64 (6.9 percent increase).
“This rate increase is especially welcome due to the return of the 2.0 percent sequestration cuts which would have offset the payment increase in the proposed rule,” Harris said.
Providers must also consider wage index changes, along with PDGM case mix recalibrations (detailed further below) when projecting the financial impact of the final rule on their organization.
CMS made no changes to the continued phase-out of the rural add-on in 2022. Next year will represent the final year of rural add-on inclusion, with only providers in the “low population density” category receiving an add-on of 1.0 percent.
- Notice of Admission replacing RAP.
As planned, CMS will proceed with implementation of the Notice of Admission (NOA) in 2022. The NOA will replace the no-pay RAP, requiring submission at the start of care rather than every 30-day period.
“The transition to the NOA should make the billing process easier on providers as it lowers volume of submissions and timely filing risks compared to the current no-pay RAP” Harris said. “However, providers must still be wary of processing issues as Medicare updates their systems for the new format.”
The same pre-billing rules and five-day timely filing requirements implemented with the no-pay RAP will remain in place for the NOA. Harris said it is important to note that as part of this transition, all active patients whose care dates cross over the 1-1-22 implementation date will require a one-time NOA submission at the start of their first 30-day period in 2022. This initial NOA will establish a new “admission” date within the Common Working File (CWF) without requiring an actual discharge/readmit on the part of the provider.
- Case mix weights and groupings change.
CMS finalized recalibration of PDGM’s case-mix weights and updates to the functional impairment levels and comorbidity adjustment subgroups for CY2022. As proposed earlier this year, CMS used CY2020 PDGM claims data with linked OASIS (as of July 12, 2021) to recalibrate the case-mix weights.
There will be an increase in low co-morbidity subgroups from 13 to 20 and an increase in high co-morbidity subgroup pairings from 31 to 87. CMS moved forward with increasing the functional impairment points for the Risk of Hospitalization OASIS item and lowered the points for Grooming, Bathing and Ambulation/Locomotion. CMS also moved forward with lowering the point thresholds for various clinical grouping overall, although the final changes varied from the proposed rule.
Additionally, CMS will maintain the current CY2021 low utilization payment adjustment (LUPA) thresholds for CY 2022.
- COVID-19 changes are now permanent CoPs.
Certain regulatory blanket waivers that were issued to Medicare participating home health agencies during the COVID-19 public health emergency (PHE) were made permanent by the final rule. Changes to the Conditions of Participation (CoPs) were made in the following areas: Home health aide supervision:
• For the 14-day aide supervisory visit:
o Final rule applies the changes at the patient-level rather than the proposed agency-level and permits one virtual supervisory visit per patient per 60-day episode. This visit must only be done in rare instances for circumstances outside the HHA’s control and must have documentation in the medical record detailing such circumstances. Surveyors will assess the agency’s compliance at recertification and complaint surveys.
• For the aide supervisory visit requirements for non-skilled patients:
o The final rule outlines a semi-annual onsite visit with direct observation to be conducted on “each” patient the aide is providing services to rather than “a” patient as discussed in the proposed rule.
• For competency assessments:
o RN to conduct a supervisory assessment of competency when potential patient safety issues are identified.
OT at initial visit:
Occupational therapists will be allowed to conduct the Initial Assessment Visit and complete he Comprehensive Assessment (as set out in the proposed rule) but this will be permitted only when OT is on the home health plan of care with either physical therapy or speech therapy, and only in cases in which skilled nursing services are not initially on the plan of care.
SimiTree consultants note that PT and/or ST must still establish Medicare program eligibility when skilled nursing is not initially part of the plan of care.
A technical correction adding “or allowed practitioner(s)” to the CoPs has been finalized. Providers are reminded to check state regulations.
COVID-19 reporting and infection control:
The final rule also extends the mandatory COVID- 19 reporting requirements beyond the current COVID-19 PHE until December 31, 2024, and extends the infection control requirements for nursing homes which may impact hospice providers serving patients in these settings.
- LUPA add-on factor for OT.
In the proposed rule, CMS introduced establishing a LUPA add-on factor for occupational therapists (OT), since they were able to conduct the initial and comprehensive visit under COVID-19 waivers.
This was one of the blanket waivers that has been made permanent in the final rule for 2022, but only when an OT is on the home health plan of care with either physical therapy or speech therapy, and skilled nursing services are not initially on the plan of care.
With the change to allow OTs to complete the initial and comprehensive assessment, CMS has finalized a policy to include LUPA add-on payment amounts for OT visits. Due to insufficient data available to show the average excess of minutes for the first visit in LUPA periods where the initial and comprehensive assessments were conducted by OTs, CMS will use the physical therapy LUPA add-on factor to establish the OT add-on factor.
The add-on factor will apply to payments for the first skilled OT visit in LUPA periods that occur as the only period of care or the initial 30-day period of care in a sequence of adjacent 30-day periods of care.
- Changes to Home Health Quality Reporting Program.
Changes to the Home Health Quality Reporting Program (HH-QRP) include:
• Removal of the Drug Education on All Medications Provided to Patient/Caregiver During All Episodes of Care measure due to high performance, beginning January 1, 2023.
• Replacement of the Acute Care Hospital During the First 60 Days of Home Health measure and the Emergency Department Use Without Hospitalization During the First 60 Days of Home Health measure.
o These two measures have been replaced with a new measure, Home Health Within-Stay Potentially Preventable Hospitalization, beginning with the CY 2023 HH QRP.
• Requirement to publicly report the Percent of Residents Experiencing One or More Major Falls with Injury measure and Application of Percent of Long- Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan that Addresses Function measures beginning in April 2022.
• Home health agencies will collect the Transfer of Health Information (TOH) to Provider Post-Acute Care measure, the Transfer of Health Information to Patient-PAC measure, and certain Standardized Patient Assessment Data Elements (SPADES) beginning January 1, 2023.
o Begin collecting data on the two TOH measures beginning with discharges and transfers on January 1, 2023, on the OASIS-E.
o Begin collecting data on the six categories of Standardized Patient Assessment Data Elements on the OASIS-E, with the start of care, resumption of care, and discharges (except for the hearing, vision, race, and ethnicity Standardized Patient Assessment Data Elements, which would be collected at the start of care only) beginning on January 1, 2023.
Value Based Purchasing will also directly impact these measures, with the goal of overall improvement of home health agency outcomes, and quality of care.
- Changes to the Hospice Survey Process
CMS finalized nine new survey and enforcement provisions for the hospice survey process to improve consistency and oversight. Several of these provisions are effective as of October 1, 2021, with a 60-day transition period for CMS to begin conducting monitoring activities for these provisions. This new rule does not change the requirements for hospice programs, but it does make survey results more transparent to the general public and will require hospice programs to focus on improving compliance with the CoPs.
Key changes between the proposed rule and final rule include:
• Enforcement remedies will be implemented; however, payment suspensions will apply only to new patient admissions. Enforcement remedies will be effective no later than October 1, 2022.
• Removal of the requirements of a Special Focus Program for hospices. These requirements were removed for further development in collaboration with stakeholders and will be re-introduced through future rulemaking.
Hospice survey certification process changes that have been finalized as proposed include:
• A minimal survey frequency of every 36 months
• Requiring multidisciplinary survey teams for hospice when there is more than one surveyor
• Expanding CMS-based surveyor training to deemed status accrediting organizations (AO).
• Imposing Surveyor Conflict of Interest limitations
• Establishing a Hospice Program Complaint Hotline
• Requiring transparency of survey findings and the use of the Form CMS-2567 (or successor form) by the AO.
“We cannot stress enough that hospices need to implement a pro-active survey readiness program in order to ensure compliance with the CoPs and prepare well in advance of implementation of survey enforcement remedies,” said Kim Skehan, SimiTree’s Director of Compliance, Regulatory & Quality. “Survey readiness should be an ongoing effort.”
Read the proposed rule in its entirety here.
SimiTree can help you implement these changes.
Need help understanding what any of the changes in the final rule for 2022 will mean for your agency? The consultants at SimiTree are available to help develop individualized work plans or performance improvement projects (PIPs) to help your organization effectively implement these changes. We’re also available for staff training (on-site or online and personalized to meet your needs) to make certain your team is ready to operate at peak performance in 2022. Use the form below to contact us and let us know how we can help, or call us at 1-844-215-8823.