In Summary: 2022 Home Health Final Rule

The Centers for Medicare & Medicaid Services (CMS) recently released the 2022 home health final payment rule. The highlight of which is how agencies nationwide will soon be subject to the Home Health Value-Based Purchasing (HHVBP) Model, which is recognized as one of the most successful alternative payment models ever.

According to CMS, the goal of the final rule is “to improve home health care for older adults and people with disabilities through a final rule that would accelerate the shift from paying for Medicare home health services based on volume to a system that pays for value.”

We have summarized the most important updates in the final rule, which include:

  • HHVBP national expansion
  • Increase in Medicare payments to home health agencies (HHAs)
  • Conditions of Participation (CoPs): Making current blanket waivers permanent
  • Occupational therapy (OT) low utilization payment adjustment (LUPA) add-on
  • Changes in PDGM calculations

HHVBP National Expansion

In the final rule for CY 2022, CMS is expanding the HHVBP Model nationwide so the program is no longer limited to the original nine states where it was first implemented in 2016. The first performance year of the expanded HHVBP Model will be CY 2023; quality performance data from that year will be used to calculate payment adjustments under the expanded Model in CY 2025. Throughout 2022, CMS will provide technical assistance to HHAs to ensure they understand how performance will be assessed as finalized in this rule.

Increase in Medicare Payments to HHAs

The CY 2022 home health payment update percentage is 2.6 percent, which is an increase of $465 million. Considering the effects of the updated fixed-dollar loss ratio and the changes in the rural add-on percentages for CY 2022, CMS estimates that Medicare payments to HHAs in CY 2022 would increase in the aggregate by $570 million (3.2 percent).

CoPs: Making Current Blanket Waivers Permanent

CMS is finalizing policies that make current blanket waivers related to home health aide supervision permanent, as well as the use of telecommunications in conducting assessment visits.

While CMS finalizes the use of telecommunications technology when performing the 14-day supervisory visit requirement when a patient is receiving skilled services, CMS also expects that in most instances, agencies would plan to conduct the 14-day supervisory assessment during an on-site, in-person visit, and that agencies would use the interactive telecommunications systems option only for unplanned occurrences that would otherwise interrupt scheduled in-person visits.

CMS is also updating the home health CoPs to implement provisions to permit an occupational therapist to conduct the initial home health assessment visit and complete the comprehensive assessment under the Medicare program, but only when occupational therapy is on the home health plan of care with physical therapy and/or speech therapy, and skilled nursing services are not initially on the plan of care.

OT LUPA Add-on

CMS maintains the CY 2021 LUPA thresholds for CY 2022 to pay more accurately for the types of patients HHAs are serving.

On the other hand, since OTs are now able to conduct the initial and comprehensive assessments, CMS is establishing a LUPA add-on factor for calculating the LUPA add-on payment amount for the first skilled occupational therapy visit in LUPA periods that occurs as the only period of care or the initial 30-day period of care in a sequence of adjacent 30-day periods of care. Currently, there is insufficient data regarding the average excess of minutes for the first visit in LUPA periods when the initial and comprehensive assessments are conducted by OTs. Therefore, CMS will utilize the physical therapy LUPA add-on factor as a proxy until CY 2022 data is available to establish a more accurate occupational therapy add-on factor for the LUPA add-on payment amounts.

Changes in PDGM Calculations

The final rule also confirms the recalibration of the PDGM case-mix weights. With the 432 case-mix groupings, about half of them have increased in case-mix weight and about half of them have decreased.

Furthermore, there are also changes in the scoring of functional levels and an expansion of the comorbidity groups. Agencies should make sure to check out all the details of these changes to the PDGM calculation to understand how it is going to impact agency reimbursements.

Make Changes Work for You

With the home health landscape constantly updating, it is crucial to stay on top of the changes. It will be strategic to have a reliable partner that can help you interpret how exactly the changes will affect your operations, especially in terms of avoiding setbacks or in leveraging the changes to your agency’s advantage. The right partner should employ integrated staffing solutions to take charge of your back office functions making sure new regulations are implemented in your workflows and accurately reflected in the documentation. This will allow your in-house team to deliver undisrupted patient care and pursue more business growth opportunities.

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