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  • Value-Based Payment Model Introduced in Proposed 2016 Home Health Prospective System

    In addition to its annual payment update, the recently released Centers for Medicare and Medicaid Services (CMS) proposed rule for the 2016 Medicare home health prospective payment system (HH PPS) includes policy changes for home health agencies and a new value-based home health model to encourage quality.

    Below are some key highlights of the rule that impact physical therapists and physical therapist assistants. The association will prepare a more-detailed summary in the coming days and post it to APTA's website.

    Payment Policy. Taking into account all the policy changes, CMS estimates that overall Medicare payments to home health agencies will be reduced by $350 million or 1.8% in 2016 compared with 2015. This decrease reflects a 2.9% market-basket update and 0.6 percentage point cut for productivity, which is mandated by the Affordable Care Act. The rule also includes a 1.72% cut in each of 2016 and 2017 to account for estimated case mix growth 2012-2014, which the agency believes is unrelated to patient acuity, and a scheduled -2.5% rebasing adjustment, the third of a 4-year phase-in. In addition, the proposed 2016 national, standardized 60-day episode payment rate would be $2,938.37. If a home health agency (HHA) does not submit the required quality data, that rate would drop by 2% to $2,880.92.

    Home Health Quality Reporting Program. CMS will add 1 standardized cross-setting measure to the Home Health Quality Reporting Program for 2015, as required by the IMPACT Act of 2014. The law requires HHAs, skilled nursing facilities, inpatient rehabilitation facilities, and long-term care hospitals to submit standardized patient assessment data and standardized data on quality measures and recourse use. The proposed new measure, the National Quality Forum (NQF)-endorsed measure: Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678), addresses changes in skin integrity. Also new for 2016, all HHAs will need to submit both admission and discharge OASIS assessments for at least 70% of all patients whose episodes of care occurred during the reporting period starting July 1, 2015. The threshold will increase by 10% in each of 2016 and 2017 to reach 90%.

    Home Health Value-Based Payment Model. HHAs in 9 states will participate in a new value-based payment model beginning January 1, 2016. These HHAs will receive a payment increase or reduction in a future year based on quality performance in the designated earlier year, and CMS projects an estimated $380 million in total savings 2018-2022 from reductions in unnecessary hospitalizations and skilled nursing facility usage. The states, chosen randomly from within designated geographic groupings, are Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee, and Washington. Among the details of the program:

    • The first payment adjustment, in 2018, will be based on 2016 performance data. The maximum increase or decrease will be 5% in 2018 and 2019, 6% in 2020, and 8% in 2021 and 2022.
    • A total performance score, determined using the higher of the HHA's achievement score or improvement score for each measure, will determine the payment adjustment in a given year.
    • The proposed rule includes a detailed discussion of the initial set of proposed measures, which include both process and outcome measures, and the scoring and payment adjustment methodologies.


    • From my interpretation of this memo, this payment model leaves our profession vulnerable to be undermined by bureaucracy and red tape. This is NOT an instant where the APTA is supporting it's members in a positive way. Though I applaud the idea of pushing our profession to providing better outcomes and be rewarded for those outcomes, it penalizes quality care that is not necessarily able to measured due to a multitude of factors, such as complexities, co-morbitities, and poor compliance. What does this mean for the future of PT profession? This will not stop at HH settings. This will eventually carry over to outpatient settings, which I believe, will have a negative impact on profitability and salaries, similarly what the BBA did in the late 90's. I can not endorse such a method of reimbursement. There are other areas in medicine, i.e. unneeded surgery, that would have larger impact on heath care savings than cutting reimbursement to PT .

      Posted by Kevin Konz on 7/16/2015 7:31 PM

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