• News New Blog Banner

  • Proposed CMS Home Health Rule Includes Major Change to Payment System

    The US Centers for Medicare and Medicaid Services (CMS) has issued a proposed rule for home health payment that resurrects elements of last year's proposal for an entirely new payment methodology by, among other changes, shifting care from 60-day to 30-day episodes and removing therapy service-use thresholds from case-mix parameters. And while the new proposal doesn't mimic last year's proposal in terms of across-the-board cuts, the practicalities of the payment system could have an impact on providers.

    On July 2, CMS unveiled the Patient Driven Groupings Model (PDGM) as part of its proposed 2019 home health prospective payment system (HH PP). If adopted, it would represent 1 of the most significant changes to home health payment in decades by moving to 30-day episodes of care and structuring payment around some 216 case-mix groups that don't include therapy visits as a factor. In a fact sheet on the proposal, CMS asserts that the new system, mandated by the Bipartisan Budget Act of 2018, would "move Medicare toward a more value-based payment system that puts the unique care needs of the patient first while also reducing the administrative burden associated with the HH PP." If adopted as proposed, the PDGM would take effect in 2020.

    APTA regulatory affairs staff will analyze the proposal in-depth over the coming weeks, but initial readings seem to indicate that much of the PDGM is a rehash of the Home Health Groupings Model (HHGM) that CMS proposed last year. That proposal met with stiff resistance from many patient and provider organizations including APTA and the association's Home Health Section, with APTA describing the HHGM as a system with "significant flaws" that "will have a harsh and dramatic effect on patient care."

    Ultimately, CMS backed off from adopting the system in 2017, promising a retooled proposal in 2018. In the intervening months, the agency convened a technical expert panel to review the issue. That panel included APTA member Bud Langham, PT, MBA, with APTA Director of Regulatory Affairs Kara Gainer attending as an observer.

    The proposed PDGM has at least 1 significant change from the HHGM: because it's designed to be implemented in a budget-neutral way, it doesn't include the same $950 million in cuts associated with the 2017 proposal.

    But that doesn't mean providers are out of the woods, according to Gainer.

    “While the budget neutrality will prevent massive across-the-board cuts, CMS notes that the impact on payments as a result of the proposed PDGM will vary by specific types of providers and location," Gainer said. "Some individual home health agencies may experience different impacts on payments due to a variety of factors, most notably the ratio of overall visits that were provided as therapy versus skilled nursing.”

    Essentially, the PDGM classifies 30-day episodes according to a combination of factors related to 5 major buckets. They are:

    Timing—"early" vs "late." Only the first 30-day episode would qualify as "early"—all other episodes would be considered "late."

    Admission source—"community" vs "institutional." A 30-day period would be classified as "institutional" if the patient had an acute or postacute facility stay within 14 days of the start of the episode—if not, the admission source would be labeled "community."

    Clinical group. Based on principal diagnoses, patients would be assigned to 1 of 6 clinical groups: musculoskeletal rehabilitation; neuro/stroke rehabilitation; wounds (both surgical and nonsurgical); behavioral health care (including substance use disorder); complex nursing; and medication management, teaching, and assessment.

    Function level—"low impairment," "medium impairment," or "high impairment." CMS would rely on Outcome and Assessment Information Sets (OASIS) codes to designate a patient's level of function.

    Comorbidity adjustments—"no adjustment," "low," or "high." A single secondary diagnosis that falls within a list of 11 comorbidity subgroups could qualify the patient for a low-comorbidity adjustment; 2 or more that results in comorbidity subgroups interacting could result in an adjustment for high comorbidity.

    The combination of categories are what comprises the 216 PDGM payment groupings. Those groupings would define payment for the 30-day episode and could in turn receive further adjustments if fewer than 2 to 6 visits are furnished during the 30-day episode, depending on the PDGM group.

    The proposed rule also includes changes to certifying and recertifying patient eligibility for continued home health care; an allowance for home health agencies to report the cost of remote patient monitoring; and a transition toward payment for home infusion therapy. The changes proposed by CMS would result in an estimated 2.1% increase in payments in 2019, or about $400 million.

    APTA staff will continue to review the proposal and develop a fact sheet in the coming weeks. The association will prepare comments on the proposal for submission before the August 31 deadline. APTA also will create a template letter that members can use to provide their own comments to CMS.

    NEXT 2018: Rothstein Roundtable Takes on Reasons Payers Are Slow to Make Changes That Support Physical Therapy

    David Elton, senior vice president of clinical programs for Optum Health, describes the opioid epidemic as a lit match—the crisis that sparked payers to sit up and take notice of physical therapy's ability to not only reduce later opioid use, but to lower downstream health care costs for a variety of conditions. It didn't take long for the 2018 Rothstein Roundtable to reflect that same heat, as a discussion initially focused on increasing the use in physical therapy as an alternative to opioids spread to an exchange on both the promise of physical therapy to become more broadly supported by private payers, and the factors that could get in the way.

    The roundtable, a regular part of APTA's 2018 NEXT Conference and Exposition, held true to its reputation for facing hot topics in the profession head-on. This year, the title of the discussion was "Physical therapy decreases opioid use: what will it take to change policy?"

    The answer, more-or-less agreed upon by Elton and his fellow panelists: policy is already changing, but not as quickly—or as broadly—as some in the physical therapy profession might prefer.

    Moderator Anthony Delitto, PT, PhD, FAPTA, launched the discussion by asking, “What’s taking so long?” for payers to act on the evidence that shows physical therapy's efficacy in treating chronic pain, as many payers impose restrictions, high copays, and other barriers that make it hard for patients to get nondrug care.

    It's not simply a matter of payers being unaware of physical therapy's effectiveness, explained panelist Kenneth Schaecher, MD, associate chief medical officer for the University of Utah Health Plans—it's also that most clinicians don't think of physical therapy as an option for their patients. "And even if they do,” he said, “they're not aware of the evidence."

    Stephen Hunter, PT, PhD, physical therapy administrator at Intermountain Health Care, said that financial implications play a role, too. Often, he explained, physical therapy presents a disincentive for patients: multiple visits, with multiple copays—providing, of course, that the patient has made it past her or his high deductible in the first place. "Due to the historical approach to physical therapy … payers have created the circumstances that have pushed people away from physical therapy," Hunter said.

    Elton largely agreed with Schaecher and Hunter, but was more hopeful about the future. The evidence, he said, can no longer be ignored, particularly when an estimated 50% of all health insurance claims are related to back pain, and 75% are related to musculoskeletal conditions—the exact areas in which physical therapy has been demonstrated to be most effective. But, as panelists pointed out, change can't really start happening until payers and the profession itself do a better job of making the case for physical therapy to the public.

    Hunter explained that at Intermountain, it was commonly assumed that the reason patients weren't seeing physical therapists (PTs) is that physicians weren't referring them. That does happen sometimes, he explained, but when they looked closer they found the real problem was with the patients themselves.

    "Patients were referred to PTs but would never show up," Hunter said. "They don't see the value."

    Charles Thigpen, PT, PhD, clinical research scientist for ATI Physical Therapy and director of observational clinical research with the Center for Effectiveness Research in Orthopaedics at the University of South Carolina, agreed, saying that the issue is about "getting in front of the patient."

    "A lot of patients don't understand why they're coming to therapy," Thigpen said. "We have a messaging issue."

    Schaecher thinks it's not simply about better marketing to consumers—those within the physical therapy profession need to rein in unwarranted variation in practice and truly commit to value-based care.

    From a payer perspective, Schaecher said, the practice of physical therapy can seem broad and inconsistent, which can lead to a perception that PTs "are not engaged in a value-based approach to care—they're engaged in making money."

    "You need to start seeing therapists that are looking at their services as a value and not a revenue generator," Schaecher added.

    Elton only partially agreed. The variability issue is present in physical therapy, he countered, but is not nearly as bad as it is in some of the medical specialties.

    Thigpen added that the variability issue in physical therapy may have to do with issues other than revenue generation, such as payer variation and patient market factors that can add to variability in treatment.

    Thigpen said he also worries that for some PTs, their commitment to their profession and a belief in the good it can do can morph into a maybe-unconscious willingness to please the patient at all costs. "You feel obligated to give the patient what the patient wants," he said. "In that way, we sometimes don't do a great job in shared decision-making," he said, which leads to unwarranted variation in practice.

    Delitto acknowledged that the current payer landscape for physical therapy was created at least in part in reaction to what he described as the "free-for-all" days of the 1980s and 1990s, when payers were much less restrictive. Returning to a place where physical therapy receives the level of support warranted through evidence will require PTs to better track and report outcomes, but that begs other questions: will the administrative burden be too heavy? Are there simpler approaches to supplying the needed data?

    Elton pointed out that APTA is already attempting to respond to these questions by way of the Physical Therapy Outcomes Registry. According to Elton, profession-driven data collection efforts could make a key difference.

    But, he added, turning the corner toward value-based care that will open payment doors will also require collaborative efforts between payers, PTs, and other professions. "What we need to be asking is, how do payers and groups like APTA come together to get a total view of this?" he said. APTA and Optum are currently pursuing a joint initiative that will be announced in the coming months, he added.

    It could be possible that payers just don't care about data, Delitto said.

    Oh, but they do, countered Schaecher, because data show where the money's going, and payers care very much about that.

    Elton agreed, but framed the issue differently.

    "Cost is really a proxy for clinical outcomes," he said. The problem is that data are often limited to what happens during and at the end of treatment, with no tracking of what happens over time—if, for instance, the physical therapy patient eventually winds up getting other treatments, undergoing surgery, or pursuing imaging at some point down the road. That's what's known as "the tail" of a particular provider's treatment. The lack of sufficient data on physical therapy's tail is the "Achilles' heel" of the profession, Elton said.

    Still, with all the internal and external challenges in place, Elton believes that for physical therapy, the bottom line is the bottom line.

    "The fact is, there's a 10-to-1 [return on investment] with physical therapy," Elton said. "More physical therapy equals less cost."