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Administrator Verma: "Today's rule overhauls how Medicare pays for home health, refocusing on the needs of patients, promoting innovation, and reducing burden for physicians and home health providers."

Wednesday, CMS announced its final rule implementing long-expected changes to the Home Health Prospective Payment System. The announcement described the changes as, "to strengthen and modernize Medicare." In short, the important PPS modifications are:

  • 2.2% rate increase for 2019 (3% increase minus 0.8% "productivity adjustment)
  • Remote patient monitoring technology costs can now be reported as a patient expense rather than an administrative expense
  • PDGM takes effect January 1, 2020, as expected
  • There will be a new case-mix system and a new home infusion therapy benefit

Here is the rest of the CMS announcement

"This home health final rule focuses on patient needs and not on the volume of care," said CMS Administrator Seema Verma. "This rule also innovates and modernizes home health care by allowing remote patient monitoring. We are also proud to offer new home infusion therapy services. Using new technology and reducing unnecessary reporting measures for certifying physicians will result in an annual cost savings and provide home health agencies and doctors what they need to give patients a personalized treatment plan that will result in better health outcomes."

Beginning with calendar year 2020, CMS is implementing changes required by law, including a new case-mix system called the Patient-Driven Groupings Model (PDGM) that puts the focus on patient needs rather than volume of care. The PDGM relies more heavily on patient characteristics to more accurately pay for home health services.

Changes in data collection under the new case-mix system, coupled with the changes below regarding meaningful measures and the Home Health Quality Reporting Program, will reduce burden for HHAs by approximately $60 million annually, beginning in CY 2020.

NAHC Comments


We spoke with NAHC president Bill Dombi to get his take on the final rule. In general, he said, the rule is what he expected, with just a few tweaks that are slightly better than what was seen in the proposed rule.

"The rate increase was the result of a law so CMS had no discretion there," he said. "The net 2.2% increase is the result of a 'productivity adjustment,' what they used to call case-mix creep, applied to the 3% inflation update."

In contrast to CMS's glowing description, Dombi said the telehealth rule change will have only a minor benefit. "It will reduce the average Medicare margin, but not to the point that MedPAC will be off our backs. It would also help establish some data on costs of making telehealth a separate benefit, although the chances of such are very limited. The CMS press release focuses on this change, but it exaggerates what [making telehealth a patient expense] really means."

Asked about the January, 2020 deadline, Dombi said it should allow enough time for providers to change their processes and software developers to update their code. He emphasized, however, that HHAs should not wait to start. 30-day episodes and the elimination of therapy as a payment factor will require adaptations that might just take 14 months to perfect.

"Reimbursement" for home telehealth

CMS is promoting innovation and modernization of home health care by allowing the cost of remote patient monitoring to be reported by home health agencies as allowable costs on the Medicare cost report form. This is expected to help foster the adoption of emerging technologies by home health agencies and result in more effective care planning, as data are shared among patients, their caregivers and their providers. The use of such technology can allow for greater patient independence and empowerment. Supporting patients in sharing their data will advance the MyHealthEData initiative, led by the Office of American Innovation.

Home Infusion added

This final rule implements the temporary transitional payments for home infusion therapy services for CYs 2019 and 2020, as required by the Bipartisan Budget Act of 2018, until the new permanent home infusion therapy services benefit begins on January 1, 2021. In addition, the final rule establishes the health and safety standards for qualified home infusion therapy suppliers of the new permanent home infusion therapy service benefit. The final rule also establishes the approval and oversight process for accrediting organizations of these suppliers as required by the 21st Century Cures Act. We are finalizing our proposal and also seeking further comments on our interpretation of "infusion drug administration calendar day" and on its potential effects on access to care.

Easier for physicians

CMS is eliminating the requirement that the certifying physician estimate how much longer home health services are needed when recertifying the need for continued home health care. This results in an estimated reduction in burden for physicians of $14.2 million, annually, and would allow physicians to spend more time with patients rather than on unnecessary paperwork.

Fewer quality measures to report

The final rule helps advance CMS's Comprehensive Meaningful Measures Initiative. CMS is removing seven Home Health Quality Reporting Program measures. As noted above, changes in data collection under the new case-mix system, coupled with the changes from these seven measure removals, will reduce burden for HHAs by approximately $60 million annually, beginning in CY 2020.

The final rule can be downloaded from the Federal Register at:

For a fact sheet on today's final rule, please visit:

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

For additional information about the Home Health Quality Reporting Program, visit


The next Home Health, Hospice & DME/Quality Open Door Forum is scheduled for Wednesday, November 14, 2018 at 2:00pm EST.


    ©2018 by Rowan Consulting Associates, Inc., Colorado Springs, CO. All rights reserved. This article originally appeared in Tim Rowan's Home Care Technology Report. One copy may be printed for personal use; further reproduction by permission only.