CMS Lowers Behavioral Adjustment for PDGM in Final Rule
Updated November 1 with statement from NAHC
WASHINGTON, D.C. (October 31, 2019)—The Centers for Medicare & Medicaid on Thursday, Oct. 31, issued its final rule governing the transition to the Patient-Driven Groupings Model (PDGM) for home health care—cutting its assumptions for behavioral changes almost in half.
According to the new rule, PDGM will require a behavioral adjustment of 4.36%—not the 8.01% proposed in July that homecare advocates pushed back hard against.
“We continue to believe that the behavior assumptions are valid ones and supported by evidence as described in the CY 2019 final rule with comment period and the CY 2020 proposed rule,” the final rule reads. “However, given the scale of the payment system changes, we agree that it might take HHAs more time before they fully implement the behavior assumed by CMS.”
The adjustment came in part in a response to commenters, according to rule published online in the Federal Register. CMS also said it made the change due to analysis from its own actuaries, who determined by looking at claims during the implementation of the Medicare Severity-Diagnosis Related Group system in 2008 and 2009 that coding and documentation changes were only about half of what was initially expected.
“We believe it is reasonable to apply the three previously outlined behavior change assumptions to only half of the 30-day periods in our analytic file (randomly selected),” CMS wrote. “Note that since payment is made for 30-day periods, it is more accurate to apply the behavior assumptions to half the 30-day periods than to assume the magnitude of the behaviors would be halved. Therefore, taking this approach means that the resulting adjustment to the 30-day payment amount needed to maintain budget neutrality, as required by law, is an adjustment of -4.36%.”
CMS is also modifying its regulations to allow therapist assistants—rather than only therapists—to perform maintenance therapy under the Medicare home health benefit, in accordance with individual state practice requirements. This change allows therapist assistants to utilize all of the skills under their license and gives HHAs the opportunity to use both therapists and therapist assistants to perform maintenance therapy, CMS said in a press release.
The rule issued Thursday also includes changes to the home health quality reporting program and updates to the home infusion therapy supplier requirements.
“The Trump administration is committed to bold and comprehensive health care policies that respond to the individual needs of patients. The new permanent home infusion therapy benefit increases the availability of home-based care, by giving patients the choice and convenience to receive critical treatments, such as anti-infectives and chemotherapy, safely at home instead of a hospital or doctor’s office,” said CMS Administrator Seema Verma in a statment.
The National Association for Home Care & Hospice NAHC responded late Thursday with the following statement:
CMS late today issued the Final Rule for the 2020 payment model, PDGM, including rates of payment that would start Jan. 1, 2020. The new payment model had been finalized in its design in the 2019 rulemaking cycle. The Final Rule offers some minor tweaks in the payment model and sets out 2020 payment rates. The rule also includes unrelated adjustments in other rules affecting home health, including the 2021 home infusion therapy benefit, quality measures, and the Home Health Value Based Purchasing Demonstration program.
NAHC is greatly heartened by CMS’s modification of the 2020 payment rates to reflect a much more realistic view that any behavior changes in coding or service utilization would not occur instantaneously and in full starting Jan. 1, 2020. In reducing the 2020 adjustment from 8.39% to 4.36%, CMS has given the home health community a chance to safely transition to the dramatically new payment model. NAHC extends its thanks and appreciation the CMS for its thoughtful consideration of the community’s comments in the rulemaking process. We will be working with CMS closely to assess actual behavior changes throughout 2020 and to help develop the standards for determining whether future adjustments may be justified.
The Bipartisan Budget Act of 2018 requires that the home health payment model reform be budget neutral. While it permits behavioral adjustment to payment rates, NAHC believes that assumption-based rate calculation should not occur because of the high risks of error and the creation of an incentive to change behavior solely to maintain Medicare revenues. Instead, NAHC supports adjustments only after actual behavioral changes have occurred. The modifications made by CMS in the behavior adjustment are still based on assumptions, but the revised assumptions are a definite improvement over the proposed ones.
NAHC supports sensible payment reform. While the PDGM payment model reforms include sensible changes, the behavioral adjustment remains a concern, albeit to a reduced level. There is bipartisan, bicameral legislation pending, S. 433 and HR 2573, that can help resolve these concerns fully. A NAHC “thank you” goes out to the sponsors of these bills as they also weighed in with CMS to secure the important and crucial change in the behavior adjustment in the rulemaking process.
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