OIG Adds Home Health Plan Work Item

WASHINGTON, D.C. (July 17, 2020)—The Office of the Inspector General (OIG) has added a new item, Analysis of New Rural Add-On Payment Methodology, to its Work Plan. The OIG Work Plan sets forth various projects including OIG audits and evaluations that are underway or planned to be addressed during the fiscal year and beyond by OIG’s Office of Audit Services and Office of Evaluation and Inspections. 

This Analysis of New Rural Add-On Payment Methodology will trend home health claims data from calendar years (CYs) 2019 through 2021 and cost reports to determine what impact, if any, the new rural add-on methodology has had on home health agency providers and the utilization of home health services in rural areas.

Section 50208 of the Bipartisan Budget Act of 2018 (BBA) extended rural add-on payments for home health episodes and visits ending during CYs 2019 through 2022, and mandated implementation of a new methodology for applying those payments. Beginning in CY 2019, rural add-on payments were provided in varying amounts according to classification in one of three rural categories:

• high utilization,
• low population density, and
• all other.

The BBA requires home health claims to indicate the code for the county in which the home health service is provided. The Centers for Medicare & Medicaid Services (CMS) has instructed providers to use value code 85 to report the county code and will return claims for correction when the code is missing or invalid. The BBA also mandated that the OIG submit to Congress an analysis of Medicare home health claims and utilization of home health services by county (or equivalent area) and recommendations, as appropriate, based on such analysis. 

The National Association for Home Care & Hospice has created a fact sheet about the rural add on, available here.