NAHC: New CMS Rule Signals Stability Going Forward

BIRMINGHAM, Alabama (July 1, 2021)—The Centers for Medicare & Medicaid (CMS) isn’t ready to make dramatic changes yet to the Patient Driven Groupings Model (PDGM) but could reduce base payment rates as soon as 2023 if current trends continue, according to Bill Dombi, president of the National Association for Homecare & Hospice (NAHC).

Dombi spoke in a webinar analyzing CMS’ proposed rule issued June 28. He said the complex proposal, which boosts home health payments by $310 million in 2022, expands the Home Health Value Based Purchasing Program and much more, sends several messages to providers.

“This proposed rule, remember, is in the context of COVID-19, but it’s also a business-as-usual action out of CMS—a clear signal that they’re not going to be handicapped as much as one might have thought by the pandemic,” Dombi told providers on the call. “Still, I think you’ll find that much of what they’re doing will deliver a bit of stability and predictability going forward.”

He said the rule, which spans 387 pages, has a “lot to digest” and NAHC plans to dive deeper into the details. The webinar focused on the home health aspects of the bill; the organization is planning an additional webinar aimed at hospice-related changes in the proposal for July 13.

Overall, Dombi said that while the rule makes a number of expected and incremental changes, there are some issues with the methodology behind some of CMS’ analysis that need to be addressed, and some areas for improvement.

“Are we satisfied with what we’ve seen so far and willing to embrace every part of it? The short answer is no. We think CMS has some work to do on it,” he said.

He focused in part on the “quick analysis” CMS has done on the impact of PDGM and a recalibration of the case-mix model, which affects all 432 categories—largely lowering them. Thresholds for low utilization payment adjustments (LUPAs), would be held the same. The proposal also retains the current 4.6% behavioral adjustment from 2021 into 2022.

He said that it’s unlcear whether CMS adequately weighed 2020 data as being “an extraordinarily unique year that’s probably not going to be repeated” and also that the agency’s insistence that the case-mix weights are “nominal” rather than significant may not be correct.

“The way to read this action at this point has two elements to it: one, CMS is not ready to drop the hammer, which is a good idea on their part; we were very critical of the endless use of assumptions they’ve used in the past on setting PDGM payment rates,” Dombi said. “And two, it’s a warning that somewhere ahead of us may be a reduction in base payment rates… 2023 is the year to watch for at least at this point.”

He added that NAHC will be submitting “robust comments and analysis and alternative methodologies” to CMS and also working with members to respond to the proposal’s request for public comment.