CMS finalizes new payment model for home health, boosts reimbursements for 2019

CMS finalized the home health prospective payment system for 2019, cementing a new payment model for the post-acute care space in 2020 and increasing payments for 2019.

The new model, the Patient-Driven Groupings Model (PDGM), will start in 2020. The model makes several significant changes to the current payment model, including changing the current 60-day episode of care to a 30-day period.

Beyond the new model, CMS updated the home health payment rate for 2019, providing an additional 2.2 percent, or about $420 million more, for home health care providers in 2019. After years of consistent payment cuts, the rate increase is the first bump for the home health space in many years and is higher than originally proposed by CMS.

Home health care has grown significantly over the last decade as the healthcare system continues to shift toward a value-based payment system. Post-acute care remains an important part of the care continuum to keep patients out of higher-cost settings and to reduce avoidable hospital admissions and readmissions.

“This home health final rule focuses on patient needs and not on the volume of care,” CMS Administrator Seema Verma said in a statement. “This rule also innovates and modernizes home health care by allowing remote patient monitoring. We are also proud to offer new home infusion therapy services. 

"Using new technology and reducing unnecessary reporting measures for certifying physicians will result in an annual cost savings and provide home health agencies (HHAs) and doctors what they need to give patients a personalized treatment plan that will result in better health outcomes.”

The new PDGM model is required to be budget neutral, as outlined in the Bipartisan Budget Act of 2018. It removes the incentive to overprovide therapy that can be billed at a higher rate, and instead is designed to rely more heavily on clinical characteristics and other patient information to allow payments to more closely reflect patient needs, according to CMS.

“Using patient characteristics to place home health periods of care into meaningful payment categories is more consistent with how home health clinicians differentiate between home health patients in order to provide needed services,” CMS stated.

CMS is still finalizing the implementation of the model, which will begin on or after Jan. 1, 2020.

See the final rule here.