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Home Health Prospective Payment System (PPS) – Changes Coming?

Posted on Wednesday, February 1, 2017 6:53 PM

In order to comply with certain provisions of the Affordable Care Act (ACA), CMS contracted with Abt Associates to assess the current home health payment system and develop a potential new payment model.

Abt’s results were recently published in the December technical report and an overview was given by CMS via a webinar on January 18, 2017. The payment reform model is called the Home Health Groupings Model (HHGM).

While Abt’s work was to address the specific provisions of the ACA, their work came to involve addressing various questions and criticisms of the current home health payment model. MedPac reports in particular have questioned home health clinical data and therapy visit frequencies as these items relate to reimbursement and case mix adjustments during the past few years.

If implemented, the resulting proposals represent a significant change to the way home health is reimbursed. Some highlights:
• Each HH period is classified by 5 categories, which results in the period being assigned to one of 128 payment groups
• HHGM introduces a 30-day payment episode, in addition to the current 60-day episode for patients discharge in the first 30 days
• Clinical groups and functional levels will affect reimbursement, although it will be changed from current models
• Primary diagnoses and co-morbidities will continue to affect payment
• Therapy service levels will be eliminated

It is uncertain when or if these proposals or parts of them will become part of the reimbursement system for home health. But these changes are potentially significant, and all home health leaders should take some time to understand what is being proposed.

Written by Des Varady, Corridor’s CEO.

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