The Centers for Medicare and Medicaid Services (CMS) has released the 2025 ICD-10-CM updates, which take effect on October 1, 2024. With 252 new codes, 36 deletions, and 13 revisions, it is crucial for Home Health agencies to stay updated with the changes to avoid coding errors that could affect reimbursement. Accurate documentation of primary diagnoses and corresponding provider progress notes is vital for ensuring seamless claim submissions, particularly for Pre-Claim Review episodes of care.

We’ve identified some key updates that will affect home health coding, which agencies should be aware of:

1. Diabetes and Hypoglycemia: New codes are introduced for pre-symptomatic Type 1 diabetes (e.g., E10.A1 and E10.A2), which could aid in early detection and monitoring. Additionally, codes for various levels of hypoglycemia (E16.A1-A3) help better track patient care and risks associated with fluctuating glucose levels.
   
2. Neoplasm Codes:  63 new codes are added to expand classifications and document remission statuses for cancers and lymphomas. For example, C84.7B (Anaplastic large cell lymphoma in remission) and C81.0A (Nodular lymphocyte-predominant Hodgkin lymphoma in remission).
   
3. Expansion in the musculoskeletal and connective tissue codes: Two codes for lumbar (M51.36) and lumbosacral (M51.37) disc degeneration will be replaced by seven new codes, based on the presence of discogenic or lower extremity pain, or no mention of pain.
   
4. Increased Specificity for Synovitis and Tenosynovitis: The category M65.- now includes expanded codes for synovitis and tenosynovitis that specify the exact body part affected (e.g., M65.911 for the right shoulder).
   
5. Aftercare Codes: Codes like Z51.A, which track aftercare for sepsis, will help document ongoing treatment and recovery needs, making it easier for home health agencies to report on services aimed at reducing the risk of recurrent infections and other complications.
   
6. Social Determinant of Health (SDoH) codes: Z59.7 (Insufficient social insurance and welfare support) will be split into two codes that describe either insufficient social insurance (Z59.71) or insufficient welfare support (Z59.72)

Preparing for Compliance

Home health coders need to be well-versed in the 2025 ICD-10-CM updates to accurately apply changes in clinical grouping and comorbidities and to avoid inactive codes for accurate billing and reporting.

Aside from coders, intake staff must also be aware of relevant updates to ensure they gather the correct documentation and verify the required details based on the new coding requirements.

Access the resources released by CMS containing information on the ICD-10-CM updates for FY 2025. This includes the 2025 Conversion Table which identifies ICD-10-CM codes that are inactive as of October 1, 2024, and their replacement codes.

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On August 23, CMS released the Preview Annual Performance Reports (APR) for the Home Health Value-Based Purchasing (HHVBP) Model. Labeled as the “CY 2024 APR” in iQIES, this report includes the home health agency’s adjusted payment percentage (APP) that will affect 2025 payments. It is based on data from January 1, 2023, to December 31, 2023, covering 12 applicable measures in the expanded HHVBP Model.

Key Report Insights

The APR explains when the payment adjustment will apply, how CMS determined the adjustment based on an agency’s performance scores, as well as the statistics for the Total Performance Score and APP for the agency’ cohort. To achieve a neutral or positive payment impact, scores must be in the 51st percentile or higher. Agencies in the 50th percentile, as currently reported, would see a slight reduction of about 0.2% in payments.

If an agency identifies any error in their Preview APR, they can request a recalculation within 15 days after publication. by emailing hhvbp_recalculation_requests@abtassoc.com.

Preliminary and Final APR Releases

The Preliminary version will be available in September or October after CMS reviews recalculation requests and makes any necessary corrections. If an HHA disagrees with the decision, they can request reconsideration within 15 days of the Preliminary APR’s publication. CMS will review and notify HHAs of its final decision. If still dissatisfied, HHAs have 7 days to request a CMS Administrator Review.

Final APRs will be published in iQIES once all requests and reviews are completed, no later than 30 days before the CY 2025 payment adjustment.

Next Steps for HHAs

Review the content carefully, especially where your performance has fallen short. There are still four months left in 2024 to influence those outcomes for your 2024 report. Aim for each measure to fall within the 51st  to 75th percentiles to ensure your overall score improves.

Accessing Reports

Access these reports in the iQIES system, where you’ve been reviewing the Interim Performance Reports (IPR).

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Starting in 2025, the GG section will play a larger role in the functional assessment category of OASIS and will significantly impact Home Health Value-Based Purchasing (HHVBP) and Quality Reporting programs.

Effective January 1, 2025, the Total Normalized Composite Change in Mobility and Change in Self-Care measures, which are currently based on M1800 items, will be replaced by a single Discharge Function Score, a new OASIS-based outcome measure calculated using GG functional assessment items.

The new Discharge Function Score will be reported on Care Compare and will account for 20% of an agency’s Total Performance Score in HHVBP.

Completing the GG Section

There are eleven OASIS GG items that are included in calculations to measure the patient’s functional status for the Discharge Function Score:

Valid responses to these items include responses 01-06, indicating the patient’s functional status was assessed. Responses 07, 09, 10, and 88, along with skipping these items or entering a dash (-), indicate that the functional activity was not attempted/assessed.

How the Discharge Function Score Works

The Discharge Function Score calculates the percent of home health patients who achieve a risk-adjusted expected function score at discharge (Discharge Function Score Measure (Home Health) – Technical Report 2024).

When clinicians complete an OASIS at the Start of Care or Resumption of Care, the responses to GG items are used in the Discharge Function Score algorithm developed by CMS. This algorithm calculates the expected discharge status of the patient based on these initial responses.

At discharge, the responses provided on the Discharge OASIS are compared to the Expected Discharge Status calculated by the algorithm. If the Observed Discharge Status matches or exceeds the Expected Discharge Score, it results in a positive score for the agency.

The score for your agency is calculated by dividing:

1. Numerator: The number of quality episodes during the reporting period where the agency’s observed discharge function score for GG items is equal to or higher than the expected discharge function score.
   
2. Denominator: The total number of home health quality episodes with an OASIS discharge record in the reporting period that do not meet the exclusion criteria.

Remember that if any GG activity, is coded with an ‘activity not attempted’ code of 7, 9, 10, 88, or is dashed (-), or is skipped or missing, then statistical imputation is used to estimate the score for that item.

To accurately reflect a patient’s functional status, agencies are advised to reduce the use of the ‘activity not attempted’ codes when possible.

Importance of Education and Training

Ensure that your clinicians completing the OASIS and the QA team reviewing them are well-educated on the guidelines for GG item scoring and how it impacts your performance in Quality Reporting and the Value-Based Purchasing Program. Start this training as soon as possible; focus on educating clinicians about the differences between GG item scoring and M1800 scoring guidelines, as each requires distinct assessment methods and response types.

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On June 26, CMS released the 2025 Home Health Proposed Rule. Among the changes are updates to OASIS requirements that will become mandatory in 2025.

To recall, the 2023 Home Health Final Rule established that, starting in 2025, home health agencies must complete and transmit OASIS for 100% of their patients, regardless of payer. This aims to standardize data collection across all patients. 

Skilled nursing facilities have long been required to report all patients regardless of payer. This requirement is now being extended to home health agencies to ensure fair comparisons and accurate outcome assessments.

The 2025 Home Health Proposed Rule introduces a transitional period for this requirement. This phased approach allows home health agencies to gradually adapt to the new reporting standards.

• Voluntary Reporting: Starts January 1, 2025.
• Mandatory Reporting: Starts July 1, 2025.

The SOC is the first assessment that can be submitted for a non-Medicare/non-Medicaid patient.

Impact on Outcome Calculations

Starting July 1, 2025, all payers will be included in outcome calculations. This includes Medicare, Medicare Advantage, skilled Medicaid, and other payers. The inclusion of ALL payers is designed to provide a comprehensive assessment of patient outcomes across the post-acute care continuum.

There will be risk adjustments and allowances based on specific patient information and payer situations. These factors will influence outcome calculations, affecting both star ratings and value-based purchasing outcomes.

Emphasis on Accuracy

Accurate and thorough OASIS assessment has become more crucial for all patients, not just those under Medicare and Medicare Advantage. If your agency currently follows relaxed documentation standards for private insurance, it is time to enhance these practices and start implementing Medicare’s standards uniformly as early as now.  Reporting of all OASIS from all payers will be essential for compliance and for obtaining accurate outcome calculations.

Home health agencies should prepare for these changes to ensure a smooth transition and compliance with the new requirements.

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On June 26th, CMS released the CY 2025 Home Health Proposed Payment Rule, outlining potential adjustments to Medicare payment rates, Quality Reporting, the Home Health Value-Based Purchasing (HHVBP) Model, and other Medicare policies. We have summarized here the most notable proposed changes and updates:

Payment Update

CMS is proposing a decrease of 4% in the permanent rates. This reduction is slightly mitigated by a 2.5% increase in the Market Basket, factoring in a productivity reduction. 

Overall, CMS estimates that Medicare payments to home health agencies in CY 2025 would decrease in the aggregate by 1.7% changing the permanent 30-day base payment rate from $2,038.13 to $2,008.12.

Quality Reporting Program

CMS is proposing to collect 4 additional items and replace 1 item as part of the standardized patient assessment data elements (SPADES) under the social determinants of health (SDOH) beginning for the CY 2027 HH QRP. 

• 2 new items of food insecurity 
• 1 new item on the living situation 
• 1 new item on utilities 
• Revise (1) transportation item

CMS is also seeking public comments on four future HH QRP quality measure concepts to guide their development efforts.

• Composite of vaccinations
• Depression
• Pain management
• Substance use disorders

Removing the suspension of OASIS all-payer data collection

CMS is proposing to end the suspension of OASIS all-payer data collection and change the collection start time to the Start of Care (SOC) OASIS timepoint instead of the Discharge OASIS timepoint. The SOC is the first assessment that can be submitted for non-Medicare/non-Medicaid patients:

Voluntary: January 1, 2025
Mandatory: July 1, 2025

During these periods, CMS will use the M0090 Date Assessment Completed from the SOC assessment to identify non-Medicare/non-Medicaid patient assessments.

HHVBP Model

In the 2025 proposed rule, CMS only seeks feedback on potential new value-based purchasing measures for 2027, requesting information at this stage. They are also considering a new Condition of Participation (CoP) focusing on referral acceptance decisions and related policies. They seek input on factors influencing patient acceptance decisions, access to care issues, and any instances where rate changes have impacted patient access.

Therapists on Conducting SOC Assessment

CMS seeks input to assess whether therapists should be allowed to conduct the Start of Care Assessment when both therapy and skilled nursing are ordered. Traditionally, since the implementation of OASIS, only nurses have been allowed to conduct the SOC assessment in such cases.

Understanding the proposed changes provides essential insights to minimize setbacks and maintain operational stability for the upcoming year in home health. Most especially, it helps home health organizations prepare for adjustments in finances and the work required to adapt to the changes. One thing to pay close attention to is ensuring that the new guidelines and updates are accurately reflected in the documentation

Read the Fact Sheet from CMS here>

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According to a new employment report released on June 7 by the Bureau of Labor Statistics (BLS), the number of new jobs in home healthcare continues to rise. The home healthcare services sector added approximately 13,900 jobs from March to April and 19,600 jobs from April to May. In May of this year, total home healthcare employment exceeded 1.7 million, showing a growth of more than 9.5% compared to May of the previous year.

This growth trajectory aligns with findings from a report by the healthcare research and consulting firm Altarum. The report highlighted that home health was the fastest-growing healthcare segment by employment in 2023, adding 100,000 jobs during that year.

Healthcare Jobs Across Various Sectors

Based on data from April to May, hospitals added 15,000 jobs, physicians’ offices increased employment by 13,400, and nursing homes grew by 10,600 jobs. Overall, the healthcare sector workforce expanded by about 68,000 in May, aligning with the past year’s average monthly increase of 64,000 jobs.

However, there has been a decline in job postings for prospective healthcare workers, with job openings in the healthcare and social assistance sectors decreasing by 204,000 from April to May. The BLS also reported a ratio of 0.8 unemployed individuals per job opening, indicating there are about 1.2 jobs available for every person seeking employment. Approximately 1.5 million people in the United States are not currently in the labor force but are actively seeking jobs, while another 5.7 million are not seeking employment. About 462,000 individuals are considered “discouraged workers,” believing there are no jobs available for them.

Home Health Staffing Challenges

The increase in home healthcare jobs highlights the industry’s growing demand and business potential. However, despite the increase in jobs, many agencies still face significant challenges in finding new workers due to competition with other healthcare providers for the same talent pool.

To address staffing challenges, home healthcare agencies must enhance both staff retention and recruitment efforts simultaneously. To attract new clinicians, many agencies offer sign-on bonuses. To retain them, agencies should focus on improving the work experience of clinicians by reducing their paperwork to prevent burnout and enable more focus on patient care.

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According to newly published data from the Centers for Medicare & Medicaid Services’ Office of the Actuary, national spending on home healthcare is expected to grow faster than any other health sector in the coming years. In 2022 alone, home health spending increased by approximately 6%, according to a previous CMS report.

Growth in Home Health Spending

The new data published in HealthAffairs revealed that between 2025 and 2026, national spending on home health care is projected to increase by 7.1%. This growth rate surpasses other healthcare categories such as hospital care services (4.9%), physician and clinical services (4.8%), and nursing home care (4.8%). The trend is expected to continue with home health care growing by 8.1% between 2027 and 2032, compared to 5.6% for hospital spending, 5.5% for physician and clinical services, and 6% for nursing home care during the same period.

Home Health vs. Other Sectors

Compared to other health sectors, home healthcare remains a relatively small spending category despite its rapid growth. In 2026, CMS projects approximately $177.5 billion will be allocated to home healthcare, whereas hospital care is expected to receive $1.7 trillion, physician services $1.1 trillion, and nursing home care $237.6 billion. Looking ahead to 2032, home healthcare spending is forecasted to rise to $282.7 billion, while hospitals and nursing homes could see expenditures of $2.3 trillion and $337.4 billion, respectively.

CMS’ health spending projections were based on historical Medicare, Medicaid, and private health insurance expenditures, as well as legislative provisions enacted during the COVID-19 public health emergency, according to the HealthAffairs analysis.

Meanwhile, Medicare spending, driven by projected enrollment growth among baby boomers, is expected to grow the fastest among payers, averaging 7.4% between 2023 and 2032, as noted by HealthAffairs.

In 2023, overall healthcare spending grew by 7.5% according to CMS projections, outpacing the 6.1% growth in nominal gross domestic product (GDP). Healthcare spending accounted for approximately 17.6% of the United States’ GDP. By 2032, healthcare spending’s share of the economy is projected to increase to 19.7%.

This data highlights the robust growth potential of the home healthcare sector, despite past and upcoming payment rate cuts. Home health agencies can capitalize on this opportunity by focusing on maintaining staffing efficiency, leveraging support solutions and partnerships, and ensuring high-quality patient care. By strategically navigating these areas, agencies can expand their business and thrive in the rapidly growing home health market.

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The launch of OASIS-E on January 1, 2023, introduced several new assessment items, including N0415 High-Risk Drug Classes: Use and Indication, to ensure consistency across various post-acute care settings.

The purpose of the OASIS item is to determine if the patient is taking any medications in high-risk drug classes, ensuring there is a patient-specific indication noted and that the patient or caregiver has been educated about these high-risk medications. It also aims to confirm that a drug regimen review was conducted and to assess the patient’s ability to manage both oral and injectable medications.

Understanding N0415 in the OASIS

Data for N0415 is collected in OASIS Start of Care (SOC), Resumption of Care (ROC) and Discharge. This OASIS item requires the assessing clinician to review the patient’s current reconciled drug regimen while they are under the care of the home health agency. It asks 1) whether the patient is taking any prescribed medications that fall into one of six high-risk drug classes, and 2) whether these prescribed medications have a patient-specific indication noted. The six  high-risk drug classes are Antipsychotics, Anticoagulants, Antibiotics, Opioids, Antiplatelets, and Hypoglycemics – including insulin.

Tips for answering N0415

1. When coding a patient’s current reconciled drug regimen, include all medications, even if they were not taken at the time of assessment. This includes new medications the patient has not yet started and those taken infrequently, such as every few weeks or monthly.
2. It is not necessary for the drug’s classification to align with the reason the patient is taking it. For instance, a drug might be classified as an antipsychotic but is being used to treat severe agitation (associated with advanced dementia). As long as the medication belongs to one of the specified high-risk drug classes and there is a specific reason noted for the patient taking it, both column 1 (indicating the drug class) and column 2 (indicating the patient-specific reason) should be checked for that drug. The key is that the medication falls into a high-risk category and there is a documented, specific reason for the patient using it.
3. If a single drug could be classified into two different drug classes, then both drug classes should be checked for that drug.
4. Do not include flushes used to keep an IV port patent or herbal and alternative medicine products when collecting data for N0415. These items should not be considered even if they are part of the current reconciled medication drug regimen.
5. If at least one of the drug classes A-J is selected, do not select Z – None of the above. Conversely, if Z – None of the above is selected, ensure that no drug classes A-J are selected.
6. Do not code N0415 based on what is expected to occur at discharge.

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The Centers for Medicare and Medicaid Services (CMS) announced the extension of the Review Choice Demonstration (RCD) for five more years effective June 1, 2024. RCD will continue in the current demonstration states of Illinois, Ohio, Texas, North Carolina, Florida, and Oklahoma.

Removal of Choice 3: Minimal Review with 25% Payment Reduction

The Review Choice Demonstration (RCD) offers home health agencies options for claims review as long as they remain compliant after each round. With the RCD extension, CMS announced the removal of Choice 3: Minimal Review with 25% Payment Reduction from the initial selection options. Agencies previously using this option must now choose between the two remaining initial review options: Pre-Claim Review or Postpayment Review. The timeline for this selection is as follows:

• Choice selection period start date: June 17, 2024
• Choice selection period end date: July 1, 2024
• Cycle effective date: July 15, 2024

Palmetto GBA will proactively coordinate with the small number of affected providers to help them select a new review choice. Providers who do not make an initial selection will automatically default to Choice 2: Postpayment Review. Additionally, providers with fewer than 10 reviews at the end of the current cycle will have their results carried over to the next cycle.

Further Guidance

It has also been confirmed that Ohio and Florida will continue their current cycles until June 30, with a new selection period starting in August. Oklahoma, the most recent state added to the Review Choice Demonstration, will complete its current cycle on May 31. The new selection period for Oklahoma will be from July 1 to July 15, with the new cycle beginning on August 1.

RCD is managed solely by Palmetto GBA, the Medicare Administrative Contractor (MAC). Home health agencies experiencing challenges with their current review choice selection and want to change it, must notify Palmetto by June 14, 2024, to ensure their selection is updated.

The extension could suggest that more states will likely be added to the Review Choice Demonstration in the future, and it may even expand to other MACs. Therefore, agencies in states not currently participating in the demonstration are advised to familiarize themselves with how the RCD works to prepare for potential expansion.

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It is undeniable that the M1800s and GG items are crucial components of the OASIS impacting quality outcome measures and reimbursements. However, agencies should not overlook the importance of other OASIS items, which provide essential data for risk adjustment beyond mere documentation compliance.

Risk adjustment in home health is a methodology used to account for the varying health statuses and related care needs of patients when assessing performance outcomes and determining reimbursements. It involves adjusting quality measures and payment rates based on specific characteristics and severity of a patient’s condition. This ensures a fair comparison among home health agencies by considering factors such as age, comorbidities, and functional status, which might otherwise skew performance metrics and financial incentives.

In essence, risk adjustment helps to:

1. Ensure Fair Comparison: By accounting for differences in patient populations, it allows for a more accurate comparison of performance across different home health agencies.
2. Quality Measurement: Improve the reliability of quality metrics by considering patient risk factors, leading to better identification of areas needing improvement and ensuring high-quality care delivery.
3. Appropriate Reimbursement: Adjust payments to reflect the expected costs of caring for patients with varying levels of health and functional status, ensuring agencies are fairly compensated for the complexity of care they provide.

This risk adjustment methodology utilizes responses from specific OASIS items to adjust payments, ensuring a fairer comparison of patient outcomes. By adjusting for individual patient characteristics, it enables an “apples-to-apples” comparison of outcomes across different patients.

Understanding the intent and guidelines for OASIS items like M1100 – Patient Living Situation, M1710 – When Confused, M1720 – When Anxious, and M1610 – Urinary Incontinence or Urinary Catheter Presence can help agencies better capture patients’ needs and complexities of their conditions. This leads to more accurate and fair comparisons in publicly reported risk-adjusted outcome measures.

The OASIS-based outcome measures for which the updated risk adjustment models apply:

• Improvement in Ambulation/Locomotion
• Improvement in Bathing
• Improvement in Bed Transferring
• Improvement in Bowel Incontinence
• Improvement in Confusion Frequency
• Improvement in Dyspnea
• Improvement in Lower Body Dressing
• Improvement in Upper Body Dressing
• Improvement in Management of Oral Medications
• Improvement in Toilet Transferring
• Discharged to Community 
• Discharge Function Score (available in 2024)

Access the Risk Adjustment Technical Steps and Risk Factor Specifications for detailed information on how risk adjustment is calculated and which OASIS items are used and the risk adjustment methodology.

Thorough and accurate documentation is equally crucial as the actual patient care in home health. Continuing education of clinicians on answering various OASIS items offers significant benefits to home health agencies on different levels from comp

The post Beyond GG and M1800: Crucial OASIS Items for Risk Adjustment first appeared on Qavalo.