Serving the home health, home care and hospice industry since 1999.

by Darcey Trescone

When was the last time a phone call could get you an eight percent raise? Medicare Home Health providers can sit back and hope NAHC's lobbying efforts will be enough, or they can join the effort to pass two bills aimed at preventing CMS from cutting your 2020 pay rate an addition 8.01% based on assumptions that your behavior will change under PDGM. NAHC lobbyists themselves strongly urge all interested parties to choose the latter option.

Speaking about Senate Bill 433 and House Bill 2573, NAHC President Bill Dombi emphatically stated, "The best solution for the problems created by Medicare's behavior adjustment lies in the legislation pending before Congress. That legislation can be enacted if there is widespread and very vocal advocacy from home health agencies nationwide. We need to get Congresspeople and Senators to treat these bills as their priority."

Click this link to join your voice to the effort!

Senate Bill 433 and House Bill 2573 - Why they are important to you

The Patient-Driven Groupings Model, or PDGM, is the new CMS payment model for home health services starting in 2020. The Bipartisan Budget Act of 2018 requires PDGM to be budget neutral while changing from a 60-day payment unit to a 30-day payment unit. The BBA gives CMS the authority to apply "behavioral adjustments" to account for provider behavioral changes (unrelated to patients) in an effort to maintain budget neutrality. There is no mandate regarding the amount of the behavioral adjustment, whether that adjustment is up or down, or how it is implemented, which means CMS has exercised considerable discretion when interpreting that aspect of the law. The 8.01% figure is not mandated by law; CMS arrived at it through a series of assumptions.

According to NAHC, this reduction alone translates to $1.298 billion in reduced home health payments and would go into effect before any actual behavioral changes could occur. Historically, payment model changes have not triggered provider behavioral modifications that equate to 8.01% in year one and there is no documentation from CMS supporting what those anticipated behavioral changes are.

Additionally, the BBA also requires that PDGM not use the volume of therapy visits as a payment level determinant, as the Home Health Prospective Payment System (HHPPS) model has done since October 2000.

Summary of S.433 and H.2573

The Home Health Payment Innovation Act (S. 433 & H.R. 2573), which was introduced with bipartisan support in both the House and Senate would achieve the following:

  • Achieve full budget neutrality over the period of 2020-2029.
  • Prohibit any pre-change rate reductions based on assumptions.
  • Require behavioral adjustments based on real, actual changes in provider behavior in response to the new payment model.
  • Permit a phase-in of rate adjustments (up or down) when an annual adjustment would be greater than 2 percent. However, the phase-in would operate to ensure full budget neutrality by 2029.
  • Permit MA Plans and CMMI innovations to waive the "confined to the home" requirement under the Medicare home health benefit when in the best interest of the Medicare beneficiary.

NAHC's Statement

In a document submitted by NAHC to Administrator Seema Verma September 9, 2019, NAHC provides strong arguments that there are alternative options regarding a behavioral adjustment and the risks associated with a behavioral adjustment of such magnitude being imposed all at once, concurrent with a major payment system update:

  • "With such flexibility, CMS could conclude that no adjustment is needed, that any adjustment should not be greater than a certain level so as to not trigger undesirable behavior, or that an adjustment can be made in steps over several years to reduce the risk of unintended consequences. There are likely many more options open to CMS to ensure continued access to high quality home health services."
  • NAHC notes that "HHAs and Medicare beneficiaries will remain at risk due to the behavior adjustment proposed by CMS even in circumstances where any adjustment is implemented in a series of steps rather than wholesale in 2020. However, a stepped adjustment will certainly mitigate risk."
  • "CMS should consider the consequences and risks associated with applying the proposed behavior adjustment in combination with the initiation of a radically different payment model along with all the other changes occurring in health care such as ACOs, expanded Medicare Advantage enrollment, PAC bundling, and other payment innovations. In doing so, CMS can take into consideration that a combination of changes all at the same time can be intensely disruptive and end with direct and negative impact on those intended to be protected through home health services. CMS can still achieve full budget neutrality overall in doing so."


  • NAHC reminded Ms. Verma that Congress is weighing in on the matter with bicameral, bipartisan legislative proposals to modify the Bipartisan Budget Act, specifically the behavior adjustment under 42 USC 1395fff. Specifically, NAHC's letter said,

    • "The two bills, S.433 and HR 2573, would cap any single year adjustment at 2 points until 2025 when CMS can make further adjustments to ensure budget neutrality over the period of 2020 through 2029.
    • NAHC believes that the process and schedule of behavior adjustments set out in these bills is the best way to ensure operational stability in HHAs and continued access to care.
    • Nevertheless, even without this legislative change, CMS can rely on its existing reconciliation power as it provides a fail-safe for budget neutrality over a full term, obviating any reason to apply significant rate adjustments in just the first year of PDGM.
  • RECOMMENDATION: "CMS should consider the impact of any behavior adjustment applied to the first year rates in PDGM to ensure that the transition to the new payment model fully limits the risk of disruptions in full access to the Medicare home health benefit. In doing so, CMS should apply any adjustment in a flexible manner to secure both continued access to care and budget neutrality under PDGM by 2029."

As home health providers we need to support this legislation and our team of experts over at NAHC who continue to be our voice in the industry and are clearly looking out for our best interests.  If you have not submitted your support yet, click here.


©2019 by Rowan Consulting Associates, Inc., Colorado Springs, CO. All rights reserved. This article originally appeared in Tim Rowan's Home Care Technology Report. This one time, rights are waived. Share this article freely by clicking on one of the sharing icons at the top of the page.