CMS Certifies Expansion of Home Health Value-Based Purchasing Model

WASHINGTON, D.C. (January 8, 2021)—Today, the Centers for Medicare & Medicaid Services (CMS) announced that the Home Health Value-Based Purchasing (HHVBP) Model has been certified for expansion through rulemaking beginning no sooner than Calendar Year (CY) 2022. The model, implemented in nine states, has resulted in an average 4.6% improvement in home health agencies’ quality scores as well as average annual savings of $141 million to Medicare.

“The coronavirus pandemic has tragically illustrated how important it is for elderly Americans to have a robust set of options outside of nursing homes,” said CMS Administrator Seema Verma in a press release. “Nursing homes will always be an important part of the care continuum—especially for those who need an intensive level of care—but home health services are often preferred by seniors. Expansion of this model would improve the overall value and quality of that home health care—and seniors stand to benefit.”

The Center for Medicare and Medicaid Innovation, also known as the CMS Innovation Center, implemented the HHVBP Model on Jan. 1, 2016 to test whether providing payment incentives for better quality care with greater efficiency would improve the quality and delivery of home health care services to Medicare beneficiaries. The HHVBP model adjusts payments to Medicare-certified home health agencies (HHAs) on the quality of care provided, rather than the volume of services rendered. These payment adjustments are determined based on a home health agency’s quality performance measures relative to peers in its state. Currently, all Medicare-certified HHAs that provide services in Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee and Washington participate in the model.

“This model is a great example of how the Innovation Center can design successful models that both improve quality for Medicare beneficiaries and lower costs,” said CMS Innovation Center Director Brad Smith. “Over the past year, we have taken a data-driven approach to assessing all the Innovation Center’s models, and we are excited that HHVBP has met our gold standard for expansion as laid out by Congress.”

“The HHVBP has been positively received by home health agencies with positive results for Medicare and Medicare patients. We are very interested in more detail about the expansion plan. Also, we look forward to fine tuning the program with CMS before any expansion occurs,” said National Association for Home Care & Hospice President William A. Dombi in a statement.

Under Section 1115A(c) of the Social Security Act, the secretary may, through rulemaking, expand the duration and scope of a model test if the secretary determines that such expansion is expected to reduce spending without reducing the quality of care or improve the quality of patient care without increasing spending. In addition, the Chief Actuary of CMS must certify that such expansion would reduce (or would not result in any increase in) net program spending. Finally, the secretary must also determine that such expansion would not deny or limit the coverage or provision of benefits. The HHVBP Model has met all three requirements.

Based on the evaluation of the first three performance years (2016-2018) as shown in its Third Annual Evaluation Report, the HHVBP Model resulted in improved quality of care, without introducing significant provider burden or adverse effects on patient access. The evaluation also reported improvement in functional status for home health patients, and observed reductions in unplanned acute care hospitalizations and skilled nursing facility (SNF) visits, resulting in reductions in inpatient and SNF spending, partially offset by an increase in annual emergency department (ED) spending. The existing model, and its subsequent expansion, do not change Medicare coverage requirements. Having met the required criteria under Section 1115A(c) of the Social Security Act, the HHVBP model is eligible for expansion.

The HHVBP expansion must be implemented through rulemaking and would begin no earlier than Jan. 1, 2022.

The Chief Actuary of CMS certified that nationwide expansion of the HHVBP Model would reduce net Medicare spending. Read the Chief Actuary certification memo here.

More information on the HHVBP Model is available here.