The recently published 2017 Home Health Final Rule outlines changes to the Home Health Prospective Payment System (HHPPS), Home Health Value Based Purchasing Model (HHVBP), and Home Health Quality Reporting Requirements. This blog gives a basic overview of the changes, while subsequent blogs will detail these changes further per topic.

The final rule updates HHPPS payment rates, including the national 60-day episode rates, the national per-visit per discipline rates, and the non-routine supply (NRS) conversion factor. These new rates will become effective for episodes beginning and after January 1, 2017.  The final rule also includes the following changes:

• The last year of the four-year phase-in of the rebasing adjustment
• The second year of a three-year phase-in of reduction to the national 60-day episode payment due to case-mix growth unrelated to patient acuity
• Changes in outlier calculation methodology
• Changes in how disposable Negative Pressure Wound Therapy (NPWT) devices are paid

The following is a brief overview of the key changes:

1) Rebasing adjustment will reduce the national 60-day episode payment by 0.97 percent, or $80.95. It will also increase the national per-visit rate by 3.5 percent of the 2010 per visit amounts. This per-visit increase will range from $1.79 more for home health aide visits to $6.34 extra for Medical Social Services (social worker) visits. In contrast, the Non-Routine Supply conversion factor will be reduced by 2.82 percent.

2) Home Health PPS case-mix weights have been recalibrated again this year, which means points earned in the Clinical, Functional and Service Domains will change for 2017. There are 119 point-giving variables this coming year, down from 124 in 2016. Of these 119 variables, 33 point values decreased, 47 remained the same, and six new added variables that were not present in 2016. Eleven variables were dropped all together. For example, earnable clinical domain points in grouper 2 for a primary diagnosis of Diabetes dropped from earning seven points to earning four points beginning in 2017. In the fourth grouper for a primary diagnosis of Diabetes, the earning points dropped from four to two. Such changes will influence Home Care Resource Group (HHRG) and Health Insurance Prospective Payment System (HIPPS) scores for many beneficiaries’ episode payments.

3) One of the biggest changes in the 2017 Final Rule has to do with outlier payment methodology. Historically, this calculation has been based on the number of visits made by the visiting clinicians per episode. However, beginning in 2017, this calculation will be based on the actual time per visit, which will be turned into number of 15-minute units. The total number of units, up to 32 units a day (eight hours) or 140 units a week (35 hours), per episode will be calculated and used as the basis for calculation of outlier payments rather than the number of visits alone.

4) Another major change is the way billing for use of and placement of disposable Negative Pressure Wound Therapy devices is done beginning next year. These small, compact, disposable units (usually alkaline battery-powered) have been billed in the agency episode rates as non-routine supplies. In the future, these disposable devices, and the care associated with placing them will be billed separately under Medicare part B, which will involve copays and different billing rules than we are accustomed to in traditional Medicare home health.

5) In Home Health Value Based Purchasing Models, cohorts have been removed and agencies will compete on a state by state level.

6) Home Health Quality Reporting has also had a major overhaul with multiple measures being removed and/or replaced. Some related OASIS C2 guidance regarding pressure ulcer guidance has changed as well because the M questions related to Pressure Ulcers are part of the revised quality reporting measures.

All agencies will need to become familiar with the changes to prosper in the coming year. Action plans will need to be created and policies and procedures will need to be revised in most agencies. Staff should be educated on the changes that will take place to ensure understanding and compliance. Please join us for the remaining blog articles in this series and free webinar content, where we will take each of the previous six topics and cover them in detail. As usual, Axxess will continue to publish information in the form of blogs, webinars, and related content for your educational needs, while updating our software to ensure you remain compliant.