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Pubished by the Centers for Medicare and Medicaid Services

Today, the Centers for Medicare & Medicaid Services (CMS) issued a final rule (CMS-1672-F) that updates the calendar year (CY) 2018 Medicare payment rates and the wage index for home health agencies (HHAs) serving Medicare beneficiaries.

The rule also finalizes proposals for the Home Health Value-Based Purchasing (HHVBP) Model and the Home Health Quality Reporting Program (HH QRP).

CMS is not finalizing the Home Health Groupings Model and will take additional time to further engage with stakeholders to move towards a system that shifts the focus from volume of services to a more patient-centered model. CMS will take the comments submitted on the proposed rule into further consideration regarding patients’ needs that strikes the right balance in putting patients first.

Reforming Regulations

CMS recently launched the “Patients Over Paperwork” Initiative, a cross-cutting, collaborative process that evaluates and streamlines regulations with a goal to reduce unnecessary burden, increase efficiencies, and improve the beneficiary experience. This effort emphasizes a commitment to removing regulatory obstacles that get in the way of providers spending time with patients. The 2018 HHPPS final rule includes the following as part of this initiative:

  • CMS removed 33 items from the OASIS assessment instrument collected at various time periods during the HH patient stay because they are no longer required for the calculation of quality measures, prospective payment, provider survey, the HH Value Based Purchasing (VBP) Model or care planning. The removal of these items will reduce time and paper required to complete HH patient assessments.
  • In addition, CMS is finalizing exception and extension requirements, and reconsideration and appeals procedures. 
  • The estimated net burden reduction associated with the changes to the HH QRP in this year’s rule, which includes the removal of these OASIS items, was over $145 million. This corresponds to an estimated net reduction in HH clinician burden of over 2 million hours annually.

Final Rule Details

Payment Policy Provisions for CY 2018

CMS projects that Medicare payments to HHAs in CY 2018 will be reduced by 0.4 percent, or $80 million, based on the finalized policies. This decrease reflects the effects of a one percent home health payment update percentage ($190 million increase); a -0.97 percent adjustment to the national, standardized 60-day episode payment rate to account for nominal case-mix growth for an impact of -0.9 percent ($170 million decrease); and the sunset of the rural add-on provision ($100 million decrease).

Annual Home Health Payment Update Percentage

Section 411(c) of the Medicare Access and Children’s Health Insurance Program (CHIP) Reauthorization Act of 2015 (MACRA) requires the market basket percentage increase to be one percent for home health payments for CY 2018. Therefore, the home health payment update percentage for HHAs that submit the required quality data for the HH QRP will be one percent. The home health update is decreased by 2 percentage points for those HHAs that do not submit quality data as required by the Secretary. For HHAs that do not submit the required quality data for CY 2018, the home health payment update will be -1 percent (one percent minus 2 percentage points).

Adjustment to Reflect Nominal Case-Mix Growth

CMS is implementing a 0.97 percent reduction to the national, standardized 60-day episode rate in CY 2018 to account for nominal case-mix growth from 2012 to 2014. CY 2018 will be the third year of the three-year phase-in of the reduction to account for nominal case-mix growth. The -0.97 percent adjustment to the national, standardized 60-day episode payment rate to account for nominal case-mix growth results in an estimated decrease in Home Health Prospective Payment System (HH PPS) payments for CY 2018 of -0.9 percent.

Sunset of the Rural Add-on Provision

Section 210 of the MACRA extended the rural add-on, which is an increase of 3 percent of the payment amount otherwise made for home health services furnished in a rural area, to episodes and visits ending before January 1, 2018. Therefore, for episodes and visits that end on or after January 1, 2018, a rural add-on payment will not apply.

 Home Health Quality Reporting Program (HH QRP) Provisions

Section 2(a) of the Improving Medicare Post-Acute Care Transformation Act of 2014 (the IMPACT Act) amended Title XVIII of the Social Security Act (the Act) by adding new section 1899B, which requires HHAs, Skilled Nursing Facilities, Inpatient Rehabilitation Facilities, and Long-Term Care Hospitals to report: standardized patient assessment data, data on quality measures, and data on resource use and other measures. The data must be standardized and interoperable so as to allow for the exchange of such data among providers. It also requires the modification of the post-acute care (PAC) assessment instruments to provide for the submission and comparison of such standardized patient assessment data. These requirements are intended to enable interoperability as well as improve quality and discharge planning, among other purposes.

Beginning with the CY 2020 HH QRP, CMS is adopting three new measures that meet the requirements of the IMPACT Act. These three measures are assessment-based and are calculated using Outcome and Assessment Information Set (OASIS) data. The finalized measures are as follows:

  • Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury;
  • Application of Percent of Residents Experiencing One or More Falls with Major Injury (National Quality Forum NQF # 0674); and
  • Application of Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631).

To implement the requirement that HHAs report standardized patient assessment data under section 1895(b)(3)(B)(v)(IV)(bb) of the Act, CMS is finalizing that the successful reporting of the data elements used to calculate the pressure ulcer measures (both the current version and, beginning with the CY 2020 program, the newly adopted version) will also satisfy the requirement to report standardized patient assessment data on medical conditions and comorbidities, and that the successful reporting of the data used to calculate the newly finalized functional assessment/care plan measure will also satisfy the requirement to report standardized patient assessment data on functional status. CMS is also finalizing the adoption of additional functional status data elements that HHAs must report as standardized patient assessment data on the OASIS. After consideration of the public comments, CMS is not finalizing proposals that would have required HHAs to report standardized patient assessment data in three other categories: Cognitive Function and Mental Status; Special Services, Treatments, and Interventions; and Impairments. CMS intends to evaluate further how to best identify standardized patient assessment data that satisfies each of these categories, is most appropriate for CMS’s intended purposes, and can be reported by HHAs in the least burdensome manner. More information on the measures and standardized patient assessment data that CMS is finalizing can be found at

CMS also reviewed the OASIS-C2 item set to identify candidate items for removal. Based on this analysis, CMS is removing 235 data elements from 33 current OASIS items, effective January 1, 2019. These OASIS items, or data elements within OASIS items, are not needed to calculate quality measures already adopted in the HH QRP or for other purposes unrelated to the HH QRP, including payment, survey, the HH VBP Model or care planning. A list of the items being removed can be found at

CMS is also finalizing a number of procedural requirements for the HH QRP, including a process for requesting reconsideration of determinations regarding compliance with the HH QRP, as well as policies for requesting exceptions and extensions of reporting timeframes.

Home Health Value-Based Purchasing Model

In the CY 2018 HH PPS final rule, in addition to summarizing the comments received on the composite quality measures for future consideration, CMS is finalizing the following changes and improvements related to the HHVBP Model:

  • CMS is amending the definition of “applicable measure” to specify that HHAs in the HHVBP Model must submit a minimum of 40 completed Home Health Care Consumer Assessment of Healthcare Providers and Systems (HHCAHPS) surveys for purposes of receiving a performance score for any of the HHCAHPS measures, beginning with performance year 1;
  • Removal of the OASIS-based measure, Drug Education on All Medications Provided to Patient/Caregiver during all Episodes of Care, from the set of applicable measures for performance year 3 and subsequent years.

For additional information about the Home Health Value-Based Purchasing Model, visit

For additional information about the Home Health Prospective Payment System, visit

The final rule can be viewed at