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CMS Finalizes PDGM and $420 Million Increase for 2019 Medicare Payments

Posted on Thursday, November 1, 2018 7:03 PM

On October 31, 2018, the Centers for Medicare & Medicaid Services (CMS) released a final rule which includes finalized CY 2019 Medicare payment updates, finalized quality reporting changes for home health agencies (HHAs), and finalized case-mix methodology refinements for the Patient Driven Groupings Model (PDGM) and a change in the home health unit of payment from 60 days to 30 days for CY 2020. The PDGM model for home health services will begin on or after January 1, 2020.

This final rule also addresses the implementation of temporary transitional payments for home infusion therapy services to begin on January 1, 2019 and summarizes public comments related to full implementation of the new home infusion therapy benefit in CY 2021.

CMS projects that Medicare payments to home health agencies in 2019 will be increased by 2.2% — or $420 millions based on its new policies. 

PDGM is designed to stop incentives to over-provide therapy services by more strongly weighting clinical characteristics, according to CMS. PDGM would also mean that the current 60-day unit of payment would change to 30 days.

PDGM takes into account certain behavioral changes that policymakers believe home health providers will make after the model is implemented. They include assumed changes to clinical and co-morbidity coding behavior, along with how Low Utilization Payment Adjustment (LUPA) claims are handled.

If no behavioral assumptions are made, CMS estimates that the 30-day payment amount to decrease by 6.42%.

“This home health final rule focuses on patient needs and not on the volume of care,” CMS Administrator Seema Verma said in a statement. “This rule also innovates and modernizes home health care by allowing remote patient monitoring.”

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