CMS Cancels Planned Home Health Pay Model,
Written by Editor   
Wednesday, November 08, 2017 08:04 AM

The CMS is canceling plans for a pay model it hoped would overhaul Medicare home health payment.  Under the home health groupings model, it was hoped that Medicare payment would have been based on patient characteristics rather than the number of visits for various forms of therapy. The new system would boost payment for skilled-nursing and home health aide visits for medically complex patients.  The CMS estimated that the model would result in a home health spending cut of $950 million, or 4.3%, in 2019, when it would take effect.

Medical providers said it would shrink beneficiary access to all types of needed services and lead to many home health agencies shutting down. The CMS agreed and announced in a rule that it would not move forward with the Home Health Groupings Model. The agency will take additional time to engage with stakeholders and move towards a system that shifts the focus from volume of services to a more patient-centered model.

The agency also finalized a planned 0.4% decrease, or $80 million cut, for home health providers in 2018. That’s less than the $130 million that was cut in 2017, but it is the latest in a succession of drops of reimbursement dating back to 2014.  Most of the cuts were called for in the Affordable Care Act, which mandated the reduction to address Medicare overpayments for home health services dating back to 2000. The CMS cut payments by $260 million for 2016, $60 million for 2015 and $200 million for 2014.

The cuts appear to have weeded out some providers as more than 700 home health providers have dropped from the Medicare rolls in the last three years. In 2014, the CMS estimated there were 11,781 home health agencies caring for Medicare beneficiaries. That figure dropped 6% to 11,056 agencies.