CMS Details New Home Health Medicare Payments, Home Infusion Benefit

November 08, 2019 - A final rule released last week will increase Medicare payments to home health agencies by about 1.3 percent, or $250 million, in calendar year (CY) 2020 and establish a permanent home infusion therapy benefit the following year.

The rule for the CY 2020 Home Health Prospective Payment System (PPS) also sets forth implementation policies for the Patient-Driven Groups Model (PDGM), an alternative to the PPS mandated by the Bipartisan Budget Act of 2018 that uses a case-mix adjustment methodology and a 30-day payment to more accurately pay home health agencies.

“The Trump Administration is committed to bold and comprehensive healthcare policies that respond to the individual needs of patients,” CMS Administrator Seema Verma stated in a press release regarding the final rule.

Specifically, the new permanent home infusion therapy benefit will increase “the availability of home based care, by giving patients the choice and convenience to receive critical treatments, such as anti-infectives and chemotherapy, safely at home instead of a hospital or doctor’s office,” Verma added.

The home infusion therapy allows for the administration of intravenous or subcutaneous drugs or biologicals in an individual’s home through the use of durable medical equipment, CMS explained in the final rule.

READ MORE: CMS Shifting Home Health to Value-Based Payments Under New Model

The new benefit, which was first established by the 21st Century Cures Act, will give Medicare beneficiaries more options for receiving services like chemotherapy and anti-infectives. Traditionally, these beneficiaries would go to an inpatient hospital, skilled nursing facility, hospital outpatient department, or physician office to get the drugs.

The rule finalized home infusion therapy benefit, which will reimburse for the professional services of home infusion therapy, including nursing services, patient training and education, remote monitoring, and monitoring services for the provision of the drugs.

However, the National Home Infusion Association (NHIA) stated that the benefit fails to address the true costs of administering infusion therapies in the home.

“In this rule, CMS has adopted a failed reimbursement methodology by basing payment for an infusion day on a physician in-office administration model. The agency continues to miss the opportunity with the home infusion benefit to capitalize on what pharmacists bring to the table in terms of expertise and value,” Logan Davis, PharmD, NHIA’s board of directors chair, stated in response to the final rule.

NHIA claimed that CMS presumed incorrectly that home infusion therapies are exclusively provided by nurses, especially considering the agency will continue to reimburse pharmacy-related professional services under the durable medical equipment benefit under Medicare Part B.

READ MORE: Payer, Provider Collab, Home Health Key to Integrated Care

The association filed a lawsuit against HHS earlier this year arguing that CMS’ interpretation of the permanent home infusion therapy benefit is inconsistent with Congress’ intent in the 21st Century Cures Act and the Bipartisan Budget Act of 2018, which further detailed the benefit and ways to implement it.

NHIA plans to pursue legal remedies and will also work with Congress to enact “technical corrections to ensure that Medicare beneficiaries can continue to access home infusion therapy.”

CMS estimated in the final rule that Medicare payments to eligible home infusion therapy suppliers will drop by about $2 million in CY 2021, when the benefit takes effect.

CMS finalizes CY 2020 PDGM implementation

While home infusion suppliers are wary of the final rule, home health stakeholders are applauding CMS’ fix for the implementation of a new Medicare payment model for home health providers.

In the final rule, CMS finalized a CY 2020 30-day payment amount for home health agencies that report quality data of $1,864.03. The rate includes a budget-neutral adjustment to the CY 2020 30-day payment amount to offset anticipated provider behavior changes upon implementation of the PDGM, as well as the use of updated wage index data for the home health wage index and updates to the fixed-dollar loss ratio to determine outlier payments.

READ MORE: CMS Bans Diverting of Medicaid Payments to Home Health Unions

“Given the scale of the PDGM payment system changes for CY 2020, it may take HHAs more time before they fully implement the behavior assumed by CMS; therefore, we applied the three previously outlined behavior change assumptions to half of the 30-day periods in our analytic file, resulting in a smaller adjustment to the 30-day payment amount needed to maintain budget neutrality, as required by law,” CMS stated in a fact sheet.

The National Association for Home Care & Hospice (NAHC) said it was “greatly heartened by CMS’s modification of the 2020 payment rates to reflect a much more realistic view that any behavior changes in coding or service utilization would not occur instantaneously and in full starting January 1, 2020.”

“In reducing the 2020 adjustment from 8.39% to 4.36%, CMS has given the home health community a chance to safely transition to the dramatically new payment model,” association added.

CMS finalized the PDGM in November 2018 and the new payment model will go into effect on January 1, 2020. PDGM relies more heavily on clinical characteristics and other patient information to categorize home health periods of care into payment categories rather than use therapy service thresholds to determine payment.

CMS believes the model will more accurately pay home health agencies and meet the specific needs of beneficiaries. But home health stakeholders have worried about model implementation.

However, stakeholders have criticized CMS’ behavioral assumptions, which will reduce the base rate in the first years of implementation to account for home health agencies choosing billing codes with the highest reimbursement.

CMS originally proposed an 8.01 percent reduction in payment based on its behavioral assumptions. However, the agency nearly halved the percentage in the final rule after industry pushback.

CMS also finalized the phase out of Request for Anticipated Payments (RAP), which upset smaller home health agencies and groups that feel ending pre-payments will shutter their businesses.

“Within nonprofit providers, particularly smaller organizations, cash flow can still be an issue if RAP payments were to go away. While we are supportive of measures to ensure program integrity broadly, not all organizations that request RAP payments are fraudulent. We recommend continuing the practice of RAP payments for existing home health agencies as well as considering the cash flow requirements of new home health agencies who also have capitalization needs,” LeadingAge states on its website.