[Federal Register Volume 87, Number 213 (Friday, November 4, 2022)]
[Rules and Regulations]
[Pages 66790-66887]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-23722]
[[Page 66789]]
Vol. 87
Friday,
No. 213
November 4, 2022
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Part 484
Medicare Program; Calendar Year (CY) 2023 Home Health Prospective
Payment System Rate Update; Home Health Quality Reporting Program
Requirements; Home Health Value-Based Purchasing Expanded Model
Requirements; and Home Infusion Therapy Services Requirements; Final
Rule
Federal Register / Vol. 87 , No. 213 / Friday, November 4, 2022 /
Rules and Regulations
[[Page 66790]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 484
[CMS-1766-F]
RIN 0938-AU77
Medicare Program; Calendar Year (CY) 2023 Home Health Prospective
Payment System Rate Update; Home Health Quality Reporting Program
Requirements; Home Health Value-Based Purchasing Expanded Model
Requirements; and Home Infusion Therapy Services Requirements
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Final rule.
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SUMMARY: This final rule sets forth routine updates to the Medicare
home health payment rates for calendar year (CY) 2023 in accordance
with existing statutory and regulatory requirements. This final rule
also finalizes a methodology for determining the impact of the
difference between assumed versus actual behavior change on estimated
aggregate expenditures for home health payments as result of the change
in the unit of payment to 30 days and the implementation of the Patient
Driven Groupings Model (PDGM) case-mix adjustment methodology and
finalizes a corresponding permanent prospective adjustment to the CY
2023 home health payment rate. This rule finalizes the reassignment of
certain diagnosis codes under the PDGM case-mix groups, and establishes
a permanent mitigation policy to smooth the impact of year-to-year
changes in home health payments related to changes in the home health
wage index. This rule also finalizes recalibration of the PDGM case-mix
weights and updates the low utilization payment adjustment (LUPA)
thresholds, functional impairment levels, comorbidity adjustment
subgroups for CY 2023, and the fixed-dollar loss ratio (FDL) used for
outlier payments. Additionally, this rule discusses comments received
on the future collection of data regarding the use of
telecommunications technology during a 30-day home health period of
care on home health claims.
This rule also finalizes changes to the Home Health Quality
Reporting Program (HH QRP) requirements; changes to the expanded Home
Health Value-Based Purchasing (HHVBP) Model; and updates to the home
infusion therapy services payment rates for CY 2023.
DATES: These regulations are effective on January 1, 2023.
FOR FURTHER INFORMATION CONTACT:
Brian Slater, (410) 786-5229, for home health and home infusion
therapy payment inquiries.
For general information about home infusion payment, send your
inquiry via email to [email protected].
For general information about the Home Health Prospective Payment
System (HH PPS), send your inquiry via email to
[email protected].
For information about the Home Health Quality Reporting Program (HH
QRP), send your inquiry via email to [email protected].
For more information about the expanded Home Health Value-Based
Purchasing Model, please visit the Expanded HHVBP Model web page at
https://innovation.cms.gov/innovation-models/expanded-home-health-value-based-purchasing-model.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Executive Summary
A. Purpose
B. Summary of the Provisions of This Rule
C. Summary of Costs, Transfers, and Benefits
II. Home Health Prospective Payment System
A. Overview of the Home Health Prospective Payment System
B. Provisions for Payment Under the HH PPS
III. Home Health Quality Reporting Program (HH QRP) and Other Home
Health Related Provisions
A. End of the Suspension of OASIS Data Collection on Non-
Medicare/Non-Medicaid HHA Patients and Requirement for HHAs To
Submit All-Payer OASIS Data for Purposes of the HH QRP, Beginning
With the CY 2027 Program Year
B. Technical Changes
C. Codification of the HH QRP Measure Removal Factors
D. Request for Information: Health Equity in the HH QRP
IV. Expanded Home Health Value-Based Purchasing (HHVBP) Model
A. Background
B. Changes to the Baseline Years and New Definitions
C. Request for Comment on a Future Approach to Health Equity in
the Expanded HHVBP Model
V. Home Infusion Therapy Services: Annual Payment Updates for CY
2023
A. Home Infusion Therapy Payment Categories
B. Payment Adjustments for CY 2023 Home Infusion Therapy
Services
C. CY 2023 Payment Amounts for Home Infusion Therapy Services
XI. Collection of Information Requirements and Waiver of Final
Rulemaking
A. Statutory Requirement for Solicitation of Comments
B. Collection of Information Requirements
C. Submission of PRA-Related Comments
D. Waiver of Final Rulemaking
XII. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Detailed Economic Analysis
D. Limitations of Our Analysis
E. Regulatory Review Cost Estimation
F. Alternatives Considered
G. Accounting Statement and Tables
H. Regulatory Flexibility Act (RFA)
I. Unfunded Mandates Reform Act (UMRA)
J. Federalism
K. Conclusion
Regulations Text
I. Executive Summary and Advancing Health Information Exchange
A. Executive Summary
1. Purpose and Legal Authority
a. Home Health Prospective Payment System (HH PPS)
As required under section 1895(b) of the Social Security Act (the
Act), this final rule updates the payment rates for HHAs for CY 2023.
In addition, the rule recalibrates the case-mix weights under section
1895(b)(4)(A)(i) and (b)(4)(B) of the Act for 30-day periods of care in
CY 2023; finalizes a methodology to determine the impact of differences
between assumed behavior changes and actual behavior changes on
estimated aggregate Medicare home health expenditures, in accordance
with section 1895(b)(3)(D)(i) of the Act; finalizes a permanent payment
adjustment to the CY 2023 30-day period payment rate; updates the case-
mix weights, LUPA thresholds, functional impairment levels, and
comorbidity subgroups for CY 2023; and updates the CY 2023 fixed-dollar
loss ratio (FDL) for outlier payments (so that outlier payments as a
percentage of estimated total payments are not to exceed 2.5 percent,
as required by section 1895(b)(5)(A) of the Act). This final rule also
discusses the comments received on the collection of data on the use of
telecommunications technology from home health claims.
b. Home Health (HH) Quality Reporting Program (QRP)
This final rule finalizes the end of the suspension of the
collection of Outcome and Assessment Information Set (OASIS) data from
non-Medicare/non-Medicaid patients pursuant to section 704 of the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
and requires HHAs to report all-payer OASIS data for purposes of the
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HH QRP. In response to concerns raised by commenters on the burden
associated with the proposed new data collection, we are finalizing
that the new OASIS data reporting for the HH QRP will begin with the CY
2027 program year, with two quarters of data required for that program
year. We are finalizing a phase-in period is in place for January 1,
2025 through June 30, 2025 in which failure to submit the data will not
result in a penalty. We are finalizing as proposed regulatory text
change that consolidates the statutory references to data submission.
We are also finalizing as proposed the codification of the measure
removal factors we adopted in the CY 2019 HH PPS final rule. Finally,
this rule summarizes the comments we received in response to our
Request for Information regarding health equity in the HH QRP.
c. Expanded Home Health Value Based Purchasing (HHVBP) Model
In accordance with the statutory authority at section 1115A of the
Act, we are finalizing proposed policy updates, new definitions and
modifications of existing definitions, conforming regulation text
changes for the expanded Home Health Value-Based Purchasing (HHVBP)
expanded Model. We also summarize the comments received on our request
for comment on a potential future approach to health equity in the
expanded HHVBP Model included in the proposed rule.
d. Medicare Coverage of Home Infusion Therapy
This final rule discusses updates to the home infusion therapy
services payment rates for CY 2023 under section 1834(u) of the Act.
2. Summary of the Provisions of This Rule
a. Home Health Prospective Payment System (HH PPS)
In section II.B.2. of this rule, we are finalizing our proposed
behavioral adjustment methodology to reflect the impact of differences
between assumed behavior changes and actual behavior changes on
estimated aggregate payment expenditures under the HH PPS. We are also
finalizing a -3.925 percent permanent payment adjustment for CY 2023
(half of the proposed -7.85 percent adjustment), as we recognize the
potential hardship of implementing the proposed full permanent
adjustment in a single year. In section II.B.3 of this rule, we are
finalizing the proposed reassignment of certain ICD-10-CM codes related
to the PDGM clinical groups and comorbidity subgroups.
In section II.B.4. of this rule, we are finalizing the proposed
recalibration of the PDGM case-mix weights, LUPA thresholds, functional
levels, and comorbidity adjustment subgroups for CY 2023.
In section II.B.5. of this rule, we are finalizing our proposals to
update the home health wage index, the CY 2023 national, standardized
30-day period payment rates, and the CY 2023 national per-visit payment
amounts by the home health payment update percentage. The final home
health payment update percentage for CY 2023 will be 4.0 percent. This
rule also finalizes a permanent 5-percent cap on wage index reductions
in order to smooth the impact of year-to-year changes in home health
payments related to changes in the home health wage index.
Additionally, this rule finalizes the FDL ratio to ensure that
aggregate outlier payments do not exceed 2.5 percent of the total
aggregate payments, as required by section 1895(b)(5)(A) of the Act.
In section II.B.6. of this final rule, we respond to the comment
solicitation on the collection of data on the use of telecommunications
technology from home health claims.
b. HH QRP
In section III.D. of this final rule, we are finalizing our
proposal to end the temporary suspension on our collection of non-
Medicare/non-Medicaid data, in accordance with section 704 of the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
and, in accordance with section 1895(b)(3)(B)(v) of the Act, to require
HHAs to submit all-payer OASIS data for purposes of the HH QRP. In
response to concerns raised by commenters on the burden associated with
the proposed new data collection, we are finalizing that the new OASIS
data reporting for the HH QRP will begin January 1, 2025 with a phase-
in period for January 1, 2025 through June 30, 2025 in which failure to
submit the data will not result in a penalty. In section III.E. of this
rule, we are finalizing technical changes to Sec. 484.245(b)(1). In
section III.F. of this rule, we are finalizing codification of the
factors we adopted in the CY 2019 HH PPS final rule as the factors we
will consider when determining whether to remove measures from the HH
QRP measure set. Lastly, in section III.G. of this rule, we are
summarizing the comments we received on our Request for Information
regarding health equity in the HH QRP.
c. Expanded Home Health Value Based Purchasing (HHVBP) Model
In section IV. of this final rule, we are finalizing as proposed
changes the HHA baseline year to CY 2022 for all HHAs that were
certified prior to January 1, 2022 starting in the CY 2023 performance
year. We are also making conforming regulation text changes at Sec.
484.350(b) and (c). In addition, we are finalizing proposed amendments
to the Model baseline year from CY 2019 to CY 2022 starting in the CY
2023 performance year to enable CMS to measure competing HHAs
performance on benchmarks and achievement thresholds that are more
current. We are finalizing conforming amendments to definitions in
Sec. 484.345. In section IV.C. of this final rule, we have included a
discussion of comments received in response to the RFI related to a
potential future approach to health equity in the expanded HHVBP Model
that was included in the proposed rule.
d. Medicare Coverage of Home Infusion Therapy
In section V. of this final rule, we discuss updates to the home
infusion therapy services payment rates for CY 2023, under section
1834(u) of the Act.
3. Summary of Costs, Transfers, and Benefits
BILLING CODE 4120-01-P
Table 1--Summary of Costs, Transfers, and Benefits
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B. Advancing Health Information Exchange
The Department of Health and Human Services (HHS) has a number of
initiatives designed to encourage and support the adoption of
interoperable health information technology and to promote nationwide
health information exchange to improve health care and patient access
to their digital health information.
To further the goal of data interoperability in post-acute care
settings, CMS and the Office of the National Coordinator for Health
Information Technology (ONC) participate in the Post-Acute Care
Interoperability Workgroup (PACIO) to facilitate collaboration with
industry stakeholders to develop Health Level Seven
International[supreg] (HL7) Fast Healthcare Interoperability
Resources[supreg] (FHIR) standards.\1\ These standards could support
the exchange and reuse of patient assessment data derived from the
Minimum Data Set (MDS), Inpatient Rehabilitation Facility-Patient
Assessment Instrument (IRF-PAI), LTCH Continuity Assessment Record and
Evaluation (CARE) Data Set (LCDS), Outcome and Assessment Information
Set (OASIS), and other sources. The PACIO Project has focused on HL7
FHIR implementation guides for functional status, cognitive status and
new use cases on advance directives, re-assessment timepoints, and
Speech, Language, Swallowing, Cognitive communication and Hearing
(SPLASCH) pathology. We encourage PAC provider and health IT vendor
participation as the efforts advance.
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\1\ http://pacioproject.org/.
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The CMS Data Element Library (DEL) continues to be updated and
serves as a resource for PAC assessment data elements and their
associated mappings to health IT standards, such as Logical Observation
Identifiers Names and Codes (LOINC) and Systematized Nomenclature of
Medicine Clinical Terms (SNOMED). The DEL furthers CMS' goal of data
standardization and interoperability. Standards in the DEL (https://del.cms.gov/DELWeb/pubHome) can be referenced on the CMS website and in
the ONC Interoperability Standards Advisory (ISA). The 2022 ISA is
available at https://www.healthit.gov/isa.
The 21st Century Cures Act (Cures Act) (Pub. L. 114-255, enacted
December 13, 2016) required HHS and ONC to take steps to further
interoperability for providers in settings across the care continuum.
Section 4003(b) of the Cures Act required ONC to take steps to advance
interoperability through the development of a trusted exchange
framework and common agreement aimed at establishing a universal floor
of interoperability across the country. On January 18, 2022, ONC
announced a significant milestone by releasing the Trusted Exchange
Framework \2\ and Common Agreement
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(TEFCA) Version 1.\3\ The Trusted Exchange Framework is a set of non-
binding principles for health information exchange, and the Common
Agreement is a contract that advances those principles. The Common
Agreement and the Qualified Health Information Network Technical
Framework Version 1 \4\ (incorporated by reference into the Common
Agreement) establish the technical infrastructure model and governing
approach for different health information networks and their users to
securely share clinical information with each other--all under commonly
agreed to terms. The technical and policy architecture of how exchange
occurs under the Trusted Exchange Framework and the Common Agreement
follows a network-of-networks structure, which allows for connections
at different levels and is inclusive of many different types of
entities at those different levels, such as health information
networks, healthcare practices, hospitals, public health agencies, and
Individual Access Services (IAS) Providers.\5\ For more information, we
refer readers to https://www.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement.
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\2\ The Trusted Exchange Framework (TEF): Principles for Trusted
Exchange (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-01/Trusted_Exchange_Framework_0122.pdf.
\3\ Common Agreement for Nationwide Health Information
Interoperability Version 1 (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf.
\4\ Qualified Health Information Network (QHIN) Technical
Framework (QTF) Version 1.0 (Jan. 2022), https://rce.sequoiaproject.org/wp-content/uploads/2022/01/QTF_0122.pdf.
\5\ The Common Agreement defines Individual Access Services
(IAS) as ``with respect to the Exchange Purposes definition, the
services provided utilizing the Connectivity Services, to the extent
consistent with Applicable Law, to an Individual with whom the QHIN,
Participant, or Subparticipant has a Direct Relationship to satisfy
that Individual's ability to access, inspect, or obtain a copy of
that Individual's Required Information that is then maintained by or
for any QHIN, Participant, or Subparticipant.'' The Common Agreement
defines ``IAS Provider'' as: ``Each QHIN, Participant, and
Subparticipant that offers Individual Access Services.'' See Common
Agreement for Nationwide Health Information Interoperability Version
1, at 7 (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf.
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We invite readers to learn more about these important developments
and how they are likely to affect HHAs.
II. Home Health Prospective Payment System
A. Overview of the Home Health Prospective Payment System
1. Statutory Background
Section 1895(b)(1) of the Act requires the Secretary to establish a
Home Health Prospective Payment System (HH PPS) for all costs of home
health services paid under Medicare. Section 1895(b)(2) of the Act
requires that, in defining a prospective payment amount, the Secretary
will consider an appropriate unit of service and the number, type, and
duration of visits provided within that unit, potential changes in the
mix of services provided within that unit and their cost, and a general
system design that provides for continued access to quality services.
In accordance with the statute, as amended by the Balanced Budget Act
of 1997 (BBA) (Pub. L. 105-33, enacted August 5, 1997), we published a
final rule in the July 3, 2000 Federal Register (65 FR 41128) to
implement the HH PPS legislation.
Section 5201(c) of the Deficit Reduction Act of 2005 (DRA) (Pub. L.
109-171, enacted February 8, 2006) added new section 1895(b)(3)(B)(v)
to the Act, requiring home health agencies (HHAs) to submit data for
purposes of measuring health care quality, and linking the quality data
submission to the annual applicable payment percentage increase. This
data submission requirement is applicable for CY 2007 and each
subsequent year. If an HHA does not submit quality data, the home
health market basket percentage increase is reduced by 2 percentage
points. In the November 9, 2006 Federal Register (71 FR 65935), we
published a final rule to implement the pay-for-reporting requirement
of the DRA, which was codified at Sec. 484.225(h) and (i) in
accordance with the statute. The pay-for-reporting requirement was
implemented on January 1, 2007.
Section 51001(a)(1)(B) of the Bipartisan Budget Act of 2018 (BBA of
2018) (Pub. L. 115-123) amended section 1895(b) of the Act to require a
change to the home health unit of payment to 30-day periods beginning
January 1, 2020. Section 51001(a)(2)(A) of the BBA of 2018 added a new
subclause (iv) under section 1895(b)(3)(A) of the Act, requiring the
Secretary to calculate a standard prospective payment amount (or
amounts) for 30-day units of service furnished that end during the 12-
month period beginning January 1, 2020, in a budget neutral manner,
such that estimated aggregate expenditures under the HH PPS during CY
2020 are equal to the estimated aggregate expenditures that otherwise
would have been made under the HH PPS during CY 2020 in the absence of
the change to a 30-day unit of service. Section 1895(b)(3)(A)(iv) of
the Act requires that the calculation of the standard prospective
payment amount (or amounts) for CY 2020 be made before the application
of the annual update to the standard prospective payment amount as
required by section 1895(b)(3)(B) of the Act.
Additionally, section 1895(b)(3)(A)(iv) of the Act requires that in
calculating the standard prospective payment amount (or amounts), the
Secretary must make assumptions about behavior changes that could occur
as a result of the implementation of the 30-day unit of service under
section 1895(b)(2)(B) of the Act and case-mix adjustment factors
established under section 1895(b)(4)(B) of the Act. Section
1895(b)(3)(A)(iv) of the Act further requires the Secretary to provide
a description of the behavior assumptions made in notice and comment
rulemaking. CMS finalized these behavior assumptions in the CY 2019 HH
PPS final rule with comment period (83 FR 56461).
Section 51001(a)(2)(B) of the BBA of 2018 also added a new
subparagraph (D) to section 1895(b)(3) of the Act. Section
1895(b)(3)(D)(i) of the Act requires the Secretary to annually
determine the impact of differences between assumed behavior changes,
as described in section 1895(b)(3)(A)(iv) of the Act, and actual
behavior changes on estimated aggregate expenditures under the HH PPS
with respect to years beginning with 2020 and ending with 2026. Section
1895(b)(3)(D)(ii) of the Act requires the Secretary, at a time and in a
manner determined appropriate, through notice and comment rulemaking,
to provide for one or more permanent increases or decreases to the
standard prospective payment amount (or amounts) for applicable years,
on a prospective basis, to offset for such increases or decreases in
estimated aggregate expenditures, as determined under section
1895(b)(3)(D)(i) of the Act. Additionally, 1895(b)(3)(D)(iii) of the
Act requires the Secretary, at a time and in a manner determined
appropriate, through notice and comment rulemaking, to provide for one
or more temporary increases or decreases to the payment amount for a
unit of home health services for applicable years, on a prospective
basis, to offset for such increases or decreases in estimated aggregate
expenditures, as determined under section 1895(b)(3)(D)(i) of the Act.
Such a temporary increase or decrease shall apply only with respect to
the year for which such temporary increase or decrease is made, and the
Secretary shall not take into account such a temporary increase or
decrease in computing the payment amount for a unit of home health
services for a subsequent year. Finally, section
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51001(a)(3) of the BBA of 2018 amends section 1895(b)(4)(B) of the Act
by adding a new clause (ii) to require the Secretary to eliminate the
use of therapy thresholds in the case-mix system for CY 2020 and
subsequent years.
2. Current System for Payment of Home Health Services
For home health periods of care beginning on or after January 1,
2020, Medicare makes payment under the HH PPS on the basis of a
national, standardized 30-day period payment rate that is adjusted for
case-mix and area wage differences in accordance with section
51001(a)(1)(B) of the BBA of 2018. The national, standardized 30-day
period payment rate includes payment for the six home health
disciplines (skilled nursing, home health aide, physical therapy,
speech-language pathology, occupational therapy, and medical social
services). Payment for non-routine supplies (NRS) is also part of the
national, standardized 30-day period rate. Durable medical equipment
(DME) provided as a home health service, as defined in section 1861(m)
of the Act, is paid the fee schedule amount or is paid through the
competitive bidding program and such payment is not included in the
national, standardized 30-day period payment amount. Additionally, the
30-day period payment rate does not include payment for certain
injectable osteoporosis drugs and negative pressure wound therapy
(NPWT) using a disposable device, but such drug and services must be
billed separately by the HHA and paid under Part B, while a patient is
under a home health plan of care, as the law requires consolidated
billing of osteoporosis drugs and NPWT using a disposable device.
To better align payment with patient care needs and to better
ensure that clinically complex and ill beneficiaries have adequate
access to home health care, in the CY 2019 HH PPS final rule with
comment period (83 FR 56406), we finalized case-mix methodology
refinements through the Patient-Driven Groupings Model (PDGM) for home
health periods of care beginning on or after January 1, 2020. The PDGM
did not change eligibility or coverage criteria for Medicare home
health services, and as long as the individual meets the criteria for
home health services as described at 42 CFR 409.42, the individual can
receive Medicare home health services, including therapy services. For
more information about the role of therapy services under the PDGM, we
refer readers to the Medicare Learning Network (MLN) Matters article
SE2000 available at https://www.cms.gov/regulations-and-guidanceguidancetransmittals2020-transmittals/se20005. To adjust for
case-mix for 30-day periods of care beginning on and after January 1,
2020, the HH PPS uses a 432-category case-mix classification system to
assign patients to a home health resource group (HHRG) using patient
characteristics and other clinical information from Medicare claims and
the Outcome and Assessment Information Set (OASIS) assessment
instrument. These 432 HHRGs represent the different payment groups
based on five main case-mix categories under the PDGM, as shown in
Figure 1. Each HHRG has an associated case-mix weight that is used in
calculating the payment for a 30-day period of care. For periods of
care with visits less than the low-utilization payment adjustment
(LUPA) threshold for the HHRG, Medicare pays national per-visit rates
based on the discipline(s) providing the services. Medicare also
adjusts the national standardized 30-day period payment rate for
certain intervening events that are subject to a partial payment
adjustment (PEP). For certain cases that exceed a specific cost
threshold, an outlier adjustment may also be available.
Under this case-mix methodology, case-mix weights are generated for
each of the different PDGM payment groups by regressing resource use
for each of the five categories (admission source, timing, clinical
grouping, functional impairment level, and comorbidity adjustment)
using a fixed effects model. A detailed description of each of the
case-mix variables under the PDGM have been described previously, and
we refer readers to the CY 2021 HH PPS final rule (85 FR 70303 through
70305).
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B. Provisions for CY 2023 Payment Under the HH PPS
1. Monitoring the Effects of the Implementation of PDGM
In the CY 2023 HH PPS proposed rule (87 FR 37605), CMS provided
data analysis on Medicare home health benefit utilization, including
overall total 30-day periods of care and average periods of care per
HHA user; distribution of the type of visits in a 30-day period of care
for all Medicare fee-for-service (FFS) claims; the percentage of
periods that receive the LUPA; estimated costs for 30-day periods of
care; the distribution, by percentage, of 30-day periods of care, using
the five clinical variables (clinical group, comorbidity adjustment,
admission source, timing, and functional impairment level); the OASIS
``GG'' functional items by response type; and the proportion of 30-day
periods of care with and without any therapy visits, nursing visits,
and/or aide/social worker visits.
We will continue to monitor and analyze home health trends and
vulnerabilities within the home health payment system.
2. PDGM Behavioral Assumptions and Adjustments Under the HH PPS
a. Background
As discussed in section II.A.1. of this rule, the Secretary was
statutorily required to change the unit of payment under the HH PPS
from a 60-day episode of care to a 30-day period of care, starting with
payments for services made on and after January 1, 2020. In determining
the CY 2020 standard prospective 30-day payment amount, CMS was also
required to make assumptions about behavior changes that could occur as
a result of the implementation of the 30-day unit of payment and
changes in case-mix adjustment factors, including the elimination of
therapy thresholds as a factor in determining case-mix adjustments. In
the CY 2019 HH PPS final rule with comment period (83 FR 56455), we
finalized the following three behavior assumptions:
Clinical Group Coding: The clinical group is
determined by the principal diagnosis code for the patient as
[[Page 66796]]
reported by the HHA on the home health claim. This behavior assumption
assumes that HHAs will change their documentation and coding practices
and put the highest paying diagnosis code as the principal diagnosis
code in order to have a 30-day period be placed into a higher-paying
clinical group.
Comorbidity Coding: The PDGM further adjusts
payments based on patients' secondary diagnoses as reported by the HHA
on the home health claim. The OASIS only allows HHAs to designate 1
principal diagnosis and 5 secondary diagnoses while the home health
claim allows HHAs to designate 1 principal diagnosis and up to 24
secondary diagnoses. This behavior assumption assumes that by
considering additional ICD-10-CM diagnosis codes listed on the home
health claim (beyond the 6 allowed on the OASIS), more 30-day periods
of care will receive a comorbidity adjustment.
LUPA Threshold: This behavior assumption assumes
that for one-third of LUPAs that are 1 to 2 visits away from the LUPA
threshold HHAs will provide 1 to 2 extra visits to receive a full 30-
day payment.
As described in the CY 2020 HH PPS final rule with comment period
(84 FR 60512), in order to calculate the CY 2020 30-day base payment
rates both with and without behavior assumptions, we first calculated
the total, aggregate amount of expenditures that would occur under the
pre-PDGM case-mix adjustment methodology (60-day episodes under 153
case-mix groups). We then calculated what the 30-day payment amount
would need to be set at in order for CMS to pay the estimated aggregate
expenditures in CY 2020 with the application of a 30-day unit of
payment under the PDGM.
We initially determined a -8.389 percent behavior change adjustment
to the base payment rate would be needed in order to ensure that the
payment rate in CY 2020 would be budget neutral, as required by law.
However, based on the comments received and reconsideration as to the
frequency of the assumed behaviors during the first year of the
transition to a new unit of payment and case-mix adjustment
methodology, we believed it was reasonable to apply the three behavior
change assumptions to only half of the 30-day periods in our analytic
file (randomly selected). Therefore, we finalized in the CY 2020 HH PPS
final rule with comment period (84 FR 60519), a -4.36 percent behavior
change assumption adjustment (``assumed behaviors'') in order to
calculate the 30-day payment rate in a budget-neutral manner for CY
2020. After applying the wage index budget neutrality factor and the
home health payment update, the CY 2020 30-day payment rate was set at
$1,864.03.
Our data analysis in section II.B.1. of the CY 2023 HH PPS proposed
rule compares the CY 2018 and CY 2019 simulated 30-day periods of care
with behavior assumptions applied and actual CY 2020 and CY 2021 30-day
periods of care. Specifically, Tables B4, B6, and B7 (87 FR 37607
through 37609) indicate that the three assumed behavior changes did
occur as a result of the implementation of the PDGM. Additionally, this
monitoring shows that other behaviors, such as changes in the provision
of therapy, also occurred. Overall, the CYs 2020 and 2021 actual 30-day
periods are similar to the simulated CYs 2018 and 2019 30-day periods
with the behavior assumptions applied, which is supporting evidence
that HHAs did make behavior changes. We reminded readers that, by law,
we are required to ensure that estimated aggregate expenditures under
the HH PPS are equal to our determination of estimated aggregate
expenditures that otherwise would have been made under the HH PPS in
the absence of the change to a 30-day unit of payment and changes in
case-mix adjustment factors. Regardless of the magnitude and frequency
of individual behavior change (for example, LUPAs, therapy, etc.), the
occurrence of any behavior change is captured by the methodology to
determine the impact on aggregate expenditures.
We also reminded readers that in the CY 2020 HH PPS final rule with
comment period (84 FR 60513), we stated that we interpret actual
behavior changes to encompass both the assumed behavior changes that
were previously identified by CMS, as well as other behavior changes
not identified at the time the budget-neutral 30-day payment rate for
CY 2020 was established. Subsequently, as noted previously, our
analysis resulted in the identification of other behavior changes that
occurred after the implementation of the PDGM. Although not originally
one of the three finalized behavior assumptions, a decline in therapy
utilization is indicative of an additional behavior change. For
example, Table B10 and Figure B3 in section II.B.1. of the CY 2023 HH
PPS proposed rule (87 FR 37612 through 37613) indicates the number of
therapy visits declined in CYs 2020 and 2021. However, the data, as
depicted in Figure B3, also indicates a slight decline in therapy
visits began in CY 2019 after the finalization of the removal of
therapy thresholds and the PDGM, but prior to implementation. This
suggests HHAs were already beginning to decrease their therapy
provision in anticipation of the new payment system.
Each Health Insurance Prospective Payment System (HIPPS) code is
assigned a case-mix weight which determines the base payment of non-
LUPA claims prior to any other adjustments (for example, outlier
payment adjustments). Prior to the PDGM, the first position of the
HIPPS code was a numeric value that represented the interaction of
episode timing and number of therapy visits (grouping step). The
second, third, and fourth positions of the pre-PDGM HIPPS code
reflected clinical severity, functional severity, and service
utilization respectively. Therefore, to evaluate how the decrease in
therapy visits related to payments, we compared the average case-mix
weights of CY 2018 actual 60-day episodes and updated CY 2021 simulated
60-day episodes. Prior to the PDGM, the average case-mix weight for CY
2018 actual 60-day episodes was 1.0176 and the average case-mix weight
for CY 2021 simulated 60-day episodes was 0.9682. Using the updated CY
2021 simulated 60-day episodes, we set therapy levels at the pre-PDGM
(that is, CY 2018) levels and kept the clinical and functional levels
at the PDGM levels (that is, CY 2021). This resulted in an average
case-mix weight of 1.0389, slightly higher than the actual CY 2018 60-
day episodes. Next, we kept therapy levels at the PDGM (that is, CY
2021) levels and set the clinical and functional levels at the pre-PDGM
levels (that is, CY 2018) and found the average case-mix weight was
0.9383, much lower than the CY 2018 actual 60-day episodes. By
controlling for therapy levels, we were able to determine the change in
60-day episode case-mix weights was largely driven by therapy
utilization. The decrease in therapy visits led to a decrease in case-
mix weight, and therefore, a decrease in aggregate expenditures under
the pre-PDGM HH PPS.
b. Method To Annually Determine the Impact of Differences Between
Assumed Behavior Changes and Actual Behavior Changes on Estimated
Aggregate Expenditures
To evaluate if the national, standardized 30-day payment rate and
resulting estimated aggregate expenditures maintained budget neutrality
after the implementation of the PDGM, we used actual 30-day period
claims data to simulate 60-day episodes and estimate what aggregate
expenditures would have been under the 153-group case-mix system and
60-day unit of payment. Using the
[[Page 66797]]
estimated aggregate expenditures under the 153-group case-mix system
(simulated 60-day episodes from 30-day periods) we are able to
calculate permanent and temporary adjustments as discussed in section
II.B.2.c of this final rule. We used the following steps:
The first step in repricing PDGM claims was to calculate estimated
aggregate expenditures under the pre-PDGM, 153-group case-mix system
and 60-day unit of payment, by determining which PDGM 30-day periods of
care could be grouped together to form simulated 60-day episodes of
care. To facilitate grouping, we made some exclusions and assumptions
as described later in this section prior to pricing out the simulated
60-day episodes of care. We note in the early months of CY 2020, there
were 60-day episodes which started in 2019 and ended in 2020 and
therefore, some of these exclusions and assumptions may be specific to
the first year of the PDGM. We identify, through footnotes, if an
exclusion or assumption is specific to CY 2020 only. The following
describes the steps in determining the annual estimated aggregate
expenditures including the exclusions and assumptions made when
simulating 60-day episodes from actual 30-day periods.
(1) Exclusions
Claims where the claim occurrence code 50 date (OASIS
assessment date) occurred on or after October 31 of that year. This
exclusion was applied to ensure the simulated 60-day episodes contained
both 30-day periods from the same year and would not overlap into the
following year (for example, 2021, 2022, 2023). This is done because
any 30-day periods with an OASIS assessment date in November or
December might be part of a simulated 60-day episode that would
continue into the following year and where payment would have been made
based on the ``through'' date. For CYs 2021 through 2026, we also
excluded claims with an OASIS assessment date before January 1 of that
year.\6\ Again, this is to ensure a simulated 60-day episode (simulated
from two 30-day periods) does not overlap years.
---------------------------------------------------------------------------
\6\ There are no 30-day PDGM claims which started in CY 2019 and
ended in CY 2020, and therefore this exclusion would not apply to
the CY 2020 dataset.
---------------------------------------------------------------------------
Beneficiaries and all of their claims if they have
overlapping claims from the same provider (as identified by CMS
Certification Number (CCN)). All of a beneficiary's claims are dropped
so as not to create problems with assigning episode timing if only a
subset of claims is dropped
Beneficiaries and all of their claims if three or more
claims from the same provider are linked to the same occurrence code 50
date. This is done because if three or more claims link to the same
OASIS it would not be clear which claims should be joined to simulate a
60-day episode.
(2) Assumptions
If two 30-day periods of care from the same provider
reference the same OASIS assessment date (using occurrence code 50),
then we assume those two 30-day periods of care would have been billed
as a 60-day episode of care under the 153-group system.
If two 30 day-periods of care reference different OASIS
assessment dates and each of those assessment dates is referenced by a
single 30-day period of care, and those two 30-day periods of care
occur together close in time (that is, the ``from'' date of the later
30-day period of care is between 0 to 14 days after the ``through''
date of the earlier 30-day period of care), then we assume those two
30-day periods of care also would have been billed as a 60-day episode
of care under the 153-group system.
For all other 30-day periods of care, we assume that they
would not be combined with another 30-day period of care and would have
been billed as a single 30-day period.
(3) Calculating Estimated Aggregate Expenditures--Pricing Simulated 60-
Day Episode Claims
After applying the exclusions and assumptions described previously,
we have the simulated 60-day episode dataset for each year.
Starting with CY 2020 claims, we assign each simulated 60-day
episode of care as a normal episode, PEP, LUPA, or outlier based on the
payment parameters established in the CY 2020 HH PPS final rule with
comment period (84 FR 60478) for 60-day episodes of care. Next, using
the October 2019 3M Home Health Grouper (v8219) \7\ we assign a HIPPS
code to each simulated 60-day episode of care using the 153-group
methodology. Finally, we price the CY 2020 simulated 60-day episodes of
care using the payment parameters described in the CY 2020 HH PPS final
rule with comment period (84 FR 60537) for 60-day episodes of care. For
CYs 2021 through 2026, we would adjust the simulated 60-day base
payment rate to align with current payments for the analysis year (that
is, wage index budget neutrality factor, home health payment update).
For example, to calculate the CY 2021 simulated 60-day episode base
payment rate, we started with the final CY 2020 60-day base payment
rate ($3,220.79) multiplied by the final CY 2021 wage index budget
neutrality factor (0.9999) and the CY 2021 home health payment update
(1.020) to get an adjusted 60-day base payment rate ($3,284.88) for CY
2021. We used the adjusted 60-day base payment rate ($3,284.88) to
price the CY 2021 simulated 60-day claims under the pre-PDGM HH PPS
(60-day episodes under 153 case-mix groups).
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\7\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/CaseMixGrouperSoftware.
---------------------------------------------------------------------------
Once each simulated 60-day claim is priced under the pre-PDGM HH
PPS, we calculate the estimated aggregate expenditures for all
simulated 60-day episodes. That is, using actual behavior (using the
most current year of PDGM claims) we determine what the aggregate
expenditures would have been under the prior 153 group case-mix system.
Next, to control for utilization, we calculate the PDGM aggregate
expenditures using those specific 30-day periods that were used to
create the simulated 60-day episodes. That is, both the actual PDGM
aggregate expenditures and the simulated pre-PDGM aggregate
expenditures are based on the same number of claims. We received 770
comments on the methodology and implementation of a permanent
prospective behavior change adjustment on the CY 2023 home health
payment rate.
Comment: A few commenters stated that CMS' proposal would violate
three separate statutory requirements. The commenters stated that: (1)
the proposal uses therapy thresholds to determine payment despite the
statute's mandate to eliminate this practice; (2) ignores the statutory
provision by failing to correct its assumptions about how home health
agencies would change behaviors in response to the new payment system;
and (3) violates the statute's budget-neutrality requirement by
reducing overall aggregate expenditures.
Response: The BBA of 2018 tasked CMS with ensuring that Medicare
spending under the new 30-day payment system is the same as the
estimated spending under the old 60-day home health payment system.
Section 1895(b)(3)(A)(iv) of the Act directed the Secretary to
calculate a standard prospective payment amount for CY 2020,
incorporating assumptions about behavior changes, that could occur as a
result of the implementation of a 30-day unit of payment and changes in
case-mix adjustment factors. In other
[[Page 66798]]
words, using the data available at the time of rulemaking, we were
required to estimate a national, standardized payment rate so that
estimated aggregate expenditures with assumed behavior changes
(clinical group coding, comorbidity coding, and LUPA thresholds) for CY
2020 would be the same under the PDGM as they would have been under the
prior payment system (153 group). In the CY 2020 HH PPS final rule with
comment period (84 FR 60513), we estimated that this would mean a -
8.389 percent payment adjustment to the base payment rate in order to
avoid overestimating payments under the 30-day system. In response to
commenter concerns that the pervasiveness of expected behavioral
changes among HHAs was overestimated, we stated that given the scale of
the payment system changes, we agree that it might take HHAs more time
before they fully changed their behaviors in ways expected by CMS.
Therefore, we finalized a policy that applied the three behavioral
assumptions only to half (randomly selected) of the simulated 30-day
periods of care. This reduction in the application of the assumptions
resulted in a -4.36 percent behavior assumption adjustment. Therefore,
we met the initial requirement of section 1895(b)(3)(A)(iv) by setting
the CY 2020 national, standardized 30-day payment rate ($1,864.03) in a
budget-neutral manner, based on available data (simulated 30-day
periods) at the time of rulemaking.
Following the implementation of the new payment system, the BBA of
2018 tasks CMS with determining the impact of the difference between
our assumed behavior changes and actual behavior changes on estimated
aggregate expenditures beginning with CY 2020 through CY 2026, as set
out in section 1895(b)(3)(D)(i) of the Act.
As the Act requires CMS to look at actual behavior, the methodology
uses actual claims data for 30-day periods under the 432-group case-mix
model (PDGM claims) to simulate 60-day episodes under the 153-group
case-mix model (representing pre-PDGM HH PPS claims) in order to
estimate what the aggregate expenditures would have been in the absence
of the PDGM. In other words, CMS used the same claims (actual PDGM 30-
day periods and simulated 60-day episodes from the 30-day periods) to
compare estimated aggregate expenditures under both systems in order to
determine the estimated aggregate impact of behavior change. This
allows us to control for actual utilization, not predicted utilization,
to determine the impact of differences between what we estimate
aggregate expenditures would have been in the absence of the PDGM using
actual data and what the expenditures actually were under the PDGM.
As stated previously, CMS is not required to correct each of its
original assumptions regarding home health agency behavior changes or
itemize each behavior change for which its methodology accounts, as
commenters asserted. For example, while paragraph (3)(D)(i) clarifies
that the ``assumed behavior changes'' CMS must use in its calculations
are those ``described in paragraph (3)(A)(iv),'' it contains no such
qualification for the ``actual behavior changes'' to which CMS compares
the assumed behavior. CMS accordingly ensured that the payment rate
accurately accounts for all ``actual behavior changes'', in the
aggregate, that occurred in a given year.
Neither this provision, nor section 1895(b)(3)(A)(iv) of the Act,
requires CMS to ensure that it actually spends the amount of the
original estimated aggregate expenditures (that is, $16.2 billion)
based on simulated 30-day periods for CY 2020. Rather, section
1895(b)(3)(D)(i) of the Act requires that CMS compare the estimated
aggregate expenditures resulting from the 30-day payment rate with
estimated assumed behavior changes (resulting in a $1,864.03
standardized rate) to the new estimated aggregate expenditures derived
from actual data--incorporating actual behavior changes--that would
have occurred under the prior 60-day system. In other words, we are not
required to compare our original estimated aggregate expenditures
(estimated at $16.2 billion) to actual expenditures (that is, $15.1
billion), and make up the difference. Rather, under the statute, we re-
estimate aggregate expenditures under the pre-PDGM based on actual
behavior changes, as derived from actual claims. This is because, the
original estimated aggregate expenditures ($16.2 billion) were based on
predicted utilization, not actual utilization.
With regard to therapy, CMS received comments in the CY 2022 HH PPS
final rule (86 FR 62247) and in response to the CY 2023 HH PPS proposed
rule that the decrease in therapy utilization, including termination of
therapy staff, is related to the removal of the therapy payment
incentive. In their comment letter, a leading industry association
detailed how HHAs have responded to changes in the benefit structure
and have altered their operations, affecting the level of care received
by patients. For instance, prior to the PDGM, the industry notes that
HHAs were incentivized to provide the highest volume of therapy visits
possible, and a low volume of other services. The industry association
goes on to note that under the PDGM, the elimination of the therapy
volume adjustment as a case mix measure will likely lead to a reduction
in therapy services to patients. In an article published in February
2020,\8\ the National Association for Home Care and Hospice (NAHC) was
quoted as saying ``categorically, across the board, we're going to
reduce our therapy services'' as a result of the PDGM. More recently in
an article in April 2022,\9\ it was estimated that nearly half of HHAs
had planned to decrease therapy utilization after the implementation of
the PDGM. In that article, NAHC was quoted as saying ``There was a
precipitous drop in therapy visits in January and February of 2020
before the pandemic hit.'' In addition, their consulting firm stated,
``Importantly, note that the reduction in therapy visits began before
COVID-19 PHE started in March 2020--indicating that HHA providers were
already experiencing significant declines in therapy visits as a result
of PDGM, even before the onset of the pandemic. Thus, the PDGM effect
on therapy is not a COVID effect, but rather a PDGM effect.'' These
comments from interested parties confirm that the decrease in therapy
is a concerted provider behavior change in response to a financial
incentive rather than the COVID-19 PHE. Anecdotal evidence and the data
presented in the CY 2023 HH PPS proposed rule (87 FR 37612 through
37613) supports the conclusion there has been a significant change
(decline) in therapy visits due to the implementation of the PDGM.
---------------------------------------------------------------------------
\8\ Why Home Health Care Is Suddenly Harder to Come by For
Medicare Patients. https://khn.org/news/why-home-health-care-is-suddenly-harder-to-come-by-for-medicare-patients/.
\9\ Home Health Agencies Should Brace for PDGM Battle Later This
Year. https://homehealthcarenews.com/2022/04/home-health-agencies-should-brace-for-pdgm-battle-later-this-year/.
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If we were to artificially inflate aggregate expenditures in CYs
2020 and 2021 by including payments for therapy visits that may have
occurred under the old thresholds, but that were in fact not provided
under the new system (as shown by actual data), we would be setting
payment based on how providers would have presumably behaved under the
old system rather than actual behaviors under the new system, which we
believe is not the best reading of the law. It would be inappropriate
to manipulate the data so that old behaviors (in this case, inflated
therapy visits to reach payment thresholds)
[[Page 66799]]
would change the resulting payment adjustment for assumed versus actual
behavior changes under the PDGM. It would be inappropriate for CMS to
continue to pay for therapy as if HHAs were still inflating therapy
provision based on the former therapy thresholds, when the number of
therapy visits after the implementation of the PDGM has actually
declined. Despite the commenters' argument that CMS cannot use the
reduction in therapy to determine payment because the BBA of 2018
mandated the elimination of therapy thresholds, the law did not mandate
a reduction in the provision of therapy or even decrease the payment
rates for therapy disciplines. It simply removed a payment incentive
structured around the quantity of therapy visits, which had resulted in
provider behavior to maximize payment, exactly the type of actual
behavior change that CMS is tasked to consider when setting the base
payment rate.
We disagree with commenters who read sections 1895(b)(3)(A)(iv) and
1895(b)(3)(D) of the Act to require payments based on earlier, higher
therapy utilization rates instead of permitting us to re-run the
calculations we used to predict aggregated expenditures with actual
2020 data. Subparagraph (A)(iv) required CMS, in determining budget
neutrality for 2020, to estimate a payment amount so that the
``estimated aggregate amount of expenditures'' under the new 30-day
case-mix system--after including ``assumptions about behavior changes
that could occur'' because of the changed methodology--was ``equal to
the estimated aggregate amount of expenditures that otherwise would
have been made'' if the new 30-day case-mix system ``had not been
enacted.'' And subparagraph (D) requires CMS, for years 2020-2026, to
adjust payments based on how differences between the ``assumed''
behavior changes that CMS originally predicted and the ``actual''
behavior changes CMS now observes impact original ``estimated aggregate
expenditures.'' CMS followed subparagraph (A)(iv) by estimating
aggregate expenditures for CY 2020 using simulated 30-day case-mix
system claims (as this was the only data available at the time of CY
2020 rulemaking) to calculate a 30-day base payment rate as if the 30-
day case-mix system ``had not been enacted''. CMS followed subparagraph
(D) by determining the impact of assumed behavior changes to actual
behavior changes by comparing the 30-day base payment rate and
aggregate expenditures (based on assumed behaviors) to what the 30-day
base payment rate and aggregate expenditures should have been (based on
actual behaviors).
Some commenters read the requirement in subparagraph (A)(iv) to
calculate estimated aggregate expenditures as if one of Congress'
payment reforms ``had not been enacted'' to require payments based on
pre-2020 therapy utilization rates--pointing also to subparagraph
(A)(iv)'s title of ``budget neutrality for 2020.'' But that reading
ignores the requirement in subparagraph (D) to adjust estimated
aggregate expenditures based on ``actual behavior changes,'' as well as
its instruction in subparagraph (A)(iv) to incorporate into CMS's
estimated aggregate expenditures ``assumptions about behavior changes
that could occur as a result of'' implementing these payment reforms.
These provisions authorize CMS to account for how behavior changes,
like therapy utilization, would have affected payments under the old
60-day system and do not require CMS to pay for therapy that never
actually occurred. This ensures that HHAs were still paid the same
amount they would have been under the old system for services they
actually did provide--thus achieving budget neutrality.
We also disagree with the commenter who suggests that subparagraph
(D) prohibits CMS from recalculating estimated aggregate expenditures
and instead requires CMS to compare the aggregate expenditures CMS
estimated in 2019 to actual expenditures CMS observed in 2020.
Subparagraph (D) requires CMS to evaluate how using actual behavior
changes rather than assumed behavior changes affects predicted
expenditures.
Comment: Multiple commenters stated that CMS' proposed rule
violates notice and comment rulemaking because ``an agency must provide
the public with the relevant data and technical studies on which it
relies to form decisions''. Commenters indicated that CMS did not
disclose to the public both the data model and the post-manipulation
data and they were therefore unable to replicate and test the CMS'
findings and conclusions. Specifically, commenters requested the
baseline payments at the claim level used by CMS to calculate the CY
2023 impacts, any additional adjustments to the CY 2021 data to roll it
forward to CY 2022, home health agency level impacts, the dataset CMS
used to determine budget neutrality and the adjustment factors for CYs
2020 and 2021, a spreadsheet analogue to the SNF parity-adjustment, and
the input data supporting its calculations. In addition, a few
commenters stated that the methodology was not clear and did not
provide the specific claims to use in analysis. Some commenters stated
that agency-level impacts should have been provided and that they could
not fully analyze the methodology without such agency-level impacts.
Response: We disagree with commenters that we violated notice and
comment rulemaking by not providing the public with relevant data and
technical studies. We also remind commenters that this methodology, the
corresponding data files and step-by-step instructions also were
detailed in the CY 2022 HH PPS proposed rule (86 FR 35889) and CMS
solicited comments on this methodology in that proposed rule.
Interested parties did not state that the data and instructions
provided at that time were insufficient to provide comments on the
methodology. Moreover, in the CY 2023 HH PPS proposed rule, we made
available sufficient data and methodological descriptions for
interested commenters to replicate our calculations to provide comments
on this rule. These are further described below.
First, in the CY 2023 HH PPS proposed rule (87 FR 37616 through
37620), CMS provided a detailed methodology and described the results
of applying that methodology, citing the year and the source of the
home health claims data obtained from the Chronic Conditions Warehouse
(CCW) and the Home Health Claims--OASIS limited data set (LDS) file.
The CY 2022 HH PPS proposed rule (86 FR 35889 through 35892) also
included a comment solicitation on this same detailed methodology,
citing the LDS file, a publicly-available claims database. The OASIS
LDS includes the same data as the CCW, except de-identified for public
release. CMS repeatedly states that at the HH PPS LDS web page \10\
such raw data are available, and agency records reflect that multiple
commenters in fact received the CY 2021 Home Health Claims--OASIS LDS
data at issue in this rule. That file provides the variables and their
descriptions for the CY 2023 HH PPS proposed rule as well as
diagnostics that provide basic statistics for each variable CMS
considered.
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\10\ https://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/LimitedDataSets/Home_Health_PPS_LDS.
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Second, CMS detailed each methodological step it took in the rules,
including the exclusions and assumptions that CMS used to calculate
estimated aggregate expenditures. As such, commenters had access to
both
[[Page 66800]]
the dataset (including baseline payments at the claim level, and the
exact number of claims and the payment rates used in calculating the CY
2020 and CY 2021 proposed permanent and temporary adjustments) they
requested, as well as how CMS used that data to calculate the
adjustments. Interested parties were thus able to replicate CMS'
calculations with the information that CMS made available to them.
Commenters' requests for additional information go beyond the
critical factual material needed to comment on CMS' proposals. CMS did
not adjust the data to ``roll'' the CY 2021 data to CY 2022, and so
information about CY 2022 data is irrelevant to CMS's calculations. Nor
did CMS need to generate an analog to the SNF parity adjustment
spreadsheet, which was not part of the critical factual materials the
agency considered when making the calculations in the rule. Similarly,
commenters did not need home health agency level impacts data, because
impacts estimate how the national payment rate may affect HHAs overall,
which was not a metric CMS used to calculate the adjustments. Finally,
CMS did not need to release the simulated 60-day episodes because CMS
provided the detailed instructions on how commenters could simulate
those claims themselves based on the data CMS provided. We are aware
that some courts have read a procedural requirement into the
Administrative Procedure Act (Pub. L. 89-554) mandating that agencies
provide for public comment the critical factual materials on which they
rely.\11\ By releasing sufficient raw data files and methodological
descriptions that allowed commenters to replicate CMS's process, CMS
has more than satisfied any legal requirements to disclose factual
materials.
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\11\ See, for example, Am. Radio Relay League, Inc. v. F.C.C.,
524 F.3d 227, 236 (DC Cir. 2008); but cf. id. at 246 (Kavanaugh, J.,
concurring in the judgment in relevant part) (noting critical
factual material doctrine ``stands on a shaky legal foundation'').
---------------------------------------------------------------------------
Comment: Multiple commenters expressed concerns that the COVID-19
PHE may have impacted CY 2020 and 2021 data. Commenters stated the
COVID-19 PHE required a shift in priorities, thereby changing
utilization patterns.
Response: The proposed methodology controls for changes in
utilization as a result of exogenous factors such as the COVID-19 PHE
by using the same claims dataset, that is the same basket of services,
under both payment systems. This ensures any difference in aggregate
expenditures is not related to the COVID-19 PHE or other exogenous
factors. It may be helpful to review the comments received from MedPAC
on the proposed rule.\12\ MedPAC stated in its comments that the
methodology presented in the proposed rule was reasonable because
applying the case-mix system in effect prior to 2020 reflects how
Medicare would have paid in the absence of the BBA 2018 changes. MedPAC
explained that any effect of the COVID-19 PHE is included in both
estimated aggregate expenditures (that is, 60-day episodes and 30-day
periods). Therefore, they noted that methodology presented ensures that
any differences between the two calculated spending amounts would not
be attributable to the COVID-19 PHE.
---------------------------------------------------------------------------
\12\ https://www.medpac.gov/wp-content/uploads/2022/08/08152022_HomeHealth_MedPAC_COMMENT_SEC.pdf.
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In addition, while the initial onset of the COVID-19 PHE in the
early months of CY 2020 may have had an impact on home health
utilization, the healthcare system has since begun to return to normal
and stabilize. For example, studies have shown that elective surgeries
and other medical treatments have resumed to pre-pandemic capacity.\13\
As shown in the CY 2023 HH PPS proposed rule (87 FR 37605 through
37614), many aspects of home health utilization (volume, visits,
clinical groups, comorbidity adjustment, admission source, timing, and
functional impairment level) are similar throughout CYs 2020 and 2021.
Furthermore, in the CY 2023 HH PPS proposed rule, we solicited data
from interested parties showing how COVID-19 affected these aspects of
home health utilization and we did not receive any empirical
information on this issue specifically. Therefore, we find the CYs 2020
and 2021 data are sufficient and complete, for the purpose of this
methodology, and we believe the data are not significantly impacted as
a result of the COVID-19 PHE.
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\13\ Aviva S. Mattingly, BA; Liam Rose, Ph.D.; Hyrum S.
Eddington, BS; Amber W. Trickey, Ph.D.; Mark R. Cullen, MD; Arden M.
Morris, MD, MPH; Sherry M. Wren, MD. Trends in US Surgical
Procedures and Health Care System Response to Policies Curtailing
Elective Surgical Operations During the COVID-19. December 8, 2021.
JAMA Network Open. 2021;4(12):e2138038. doi:10.1001/
jamanetworkopen.2021.38038.
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Comment: A commenter stated CMS' data shows that after
implementation of the PDGM, HHAs continued to provide therapy, but the
pattern of therapy provision changed. For example, they noted the most
significant decline was for episodes with 13 or more therapy visits. In
addition, several commenters stated there has been a decline in therapy
visits since the implementation of the PDGM. However, several
commenters stated that even if therapy visits were reduced in CYs 2020
and 2021, but outcomes (for example, hospitalizations, meeting goals of
the plan of care) did not worsen, then payment reductions should not be
made.
Response: We appreciate the commenters' recommendation. However,
CMS does not have the authority to tie this payment adjustment to
outcomes or other quality measures, or to modify this adjustment on an
agency level.
Comment: A commenter suggested using Hierarchical Condition
Categories (HCC) scores within the behavioral assumptions.
Response: We appreciate the commenter's recommendation; however, we
note that the HCC scores are dependent on beneficiaries having a claims
history (which may be limited for those newly enrolled in Medicare),
and therefore, do not think they would be appropriate to use in this
methodology as it may limit our ability to capture beneficiary
characteristics needed for case-mix adjustment.
Comment: A few commenters questioned why CMS did not include
therapy utilization as one of the original three behavior change
assumptions when setting the CY 2020 payment rate.
Response: We have noted in past rules that we use the functional
impairment level case-mix adjustment, developed as part of the PDGM
case-mix, to provide the necessary payment adjustments to ensure that
functional care needs necessitating therapy, are met based on actual
patient characteristics (84 FR 60497). The functional impairment case-
mix factor was not meant to be a direct proxy for the therapy
thresholds; however, we expected that functional impairment along with
other case-mix factors (for example, admission source), would
appropriately compensate HHAs for therapy.
Likewise, we expected the functional impairment adjustment, along
with other case-mix factors (for example, admission source), to not
only alleviate concerns that removal of the therapy thresholds would
dissuade providers from delivering needed therapy, but to assure
providers that patients can and should still receive the necessary type
and amount of therapy based on patient characteristics. In this
respect, while we did note that we were aware of how payment may affect
practice patterns and that visits vary in response to financial
incentives, we also stated that the therapy thresholds promoted the
provision of care based on increased payment associated with each of
these
[[Page 66801]]
thresholds as opposed to actual patient needs (83 FR 56485). It was our
belief, when setting the original behavior change assumptions, that the
functional impairment adjustment would effectively offset reductions in
therapy visits that could result from the elimination of the therapy
thresholds, especially those patients requiring multiple therapy
disciplines or patients with significant functional impairment. As a
result, we did not initially contend that removal of the therapy
thresholds would significantly alter provider behavior, as we were
still compensating therapy through the functional impairment case-mix
adjustment. Our expectation was that therapy utilization would reflect
actual patient acuity.
Comment: Commenters stated they support the structure of the PDGM,
but the budget neutrality adjustment methodology is inconsistent with
other methodologies applied to other health care providers and would
result in a loss of access to care.
Response: We thank interested parties for their comments. However,
the commenters did not clarify what they meant by ``inconsistent with
other methodologies applied to other health care providers''. We
believe that the proposed methodology satisfies the budget neutrality
requirements at section 1895(b)(3)(A)(iv) of the Act, as well as the
requirements at section 1895(b)(3)(D)(i) of the Act, to determine the
impact of differences between assumed behavior changes and actual
behavior changes on estimated aggregate expenditures for home health
periods of care. Furthermore, MedPAC stated in their March, 2022 report
\14\ that the Commission found positive access, quality, and financial
indicators for the sector. As such, we do not believe that this
methodology and its resulting payment adjustment would result in a loss
of access to care.
---------------------------------------------------------------------------
\14\ https://www.medpac.gov/wp-content/uploads/2022/03/Mar22_MedPAC_ReportToCongress_v2_SEC.pdf.
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Comment: Several commenters recommended CMS hold a Technical Expert
Panel (TEP) to determine a methodology for calculating the budget
neutrality adjustment.
Response: We thank commenters for their suggestion. However, CMS
solicited comments on the CY 2022 HH PPS proposed rule (86 FR 35892)
for alternative methodologies, and interested parties were able to
submit comments on the CY 2023 HH PPS proposed rule. We received 75
comments on the CY 2022 proposed rule and 770 comments on the CY 2023
proposed rule. We also note that a TEP is not required by statute, and
there is insufficient time to obtain such input.
Comment: Many commenters stated the proposed methodology was
``technically flawed'' because the methodology does not compare
behaviors assumed by CMS in establishing the CY 2020 rate to actual
behaviors observed on aggregate expenditures. A commenter stated the
methodology was based on faulty data and that the methodology uses an
outdated logic, therefore the behavioral adjustment is based on ``poor
logic''.
Response: As stated previously, CMS is not required to correct or
quantify each original assumption regarding home health agency behavior
change, but rather, ensure that the payment rate is accurately
accounting for all behaviors that actually occurred in a given year. As
required by law, CMS determined the base payment rate for CY 2020
incorporating assumptions about behavior changes that could occur as a
result of the PDGM. It is unclear why the commenter believes the data
were faulty or how the methodology was outdated. The proposed
methodology for adjusting for behavioral changes compares the payment
rate and aggregate expenditures based on assumed behaviors to the what
the payment rate and estimated aggregate expenditures would have been
using actual behaviors. Therefore, CMS' proposed methodology is
comparing assumed behaviors to actual behaviors on estimated aggregate
expenditures, as required by law. Further, as stated in the CY 2023 HH
PPS proposed rule (87 FR 37616), we continue to assert that the best
reading of the law requires us to retrospectively determine if the 30-
day payment amount in CY 2020 resulted in the same estimated aggregate
expenditures that would have been made if the change in the unit of
payment and the PDGM case-mix adjustment methodology had not been
implemented. It does not require that our rates be retrospectively
adjusted to mirror estimated aggregate spending.
Comment: Several commenters recommended including changes that
affect other aspects of Medicare home health spending such as Medicare
enrollment; modification/improvement of enforcement of coverage
standards (for example, maintenance therapy, home infusion therapy);
behavior changes in other PAC services that affect home health
utilization; technological advances; and other factors that may
contribute to Medicare spending changes not specifically related to the
implementation of the PDGM. Some commenters suggesting adjusting for
nominal versus real case-mix change. A commenter recommended replacing
the proposed methodology, which they stated focused on a change in
average case-mix weight, to a methodology which focuses on behavior
changes.
Response: We thank the commenters for their suggestions. While we
recognize other factors affect the utilization of home health services,
we believe the statute is best read to instruct us to consider only
changes related to provider behavior in response to the 30-day unit of
payment and case-mix changes. As stated in the CY 2023 HH PPS proposed
rule (87 FR 37616), while changes in nominal case-mix may be
supplemental to our findings, the law requires CMS to determine the
impact of differences between assumed versus actual behavioral changes
on estimated aggregate expenditures, which are not factored into our
calculations of case-mix adjustment authority. Section
1895(b)(3)(B)(iv) of the Act states that CMS has the authority to
adjust for case-mix changes that are a result of changes in the coding
or classification of different units of services that do not reflect
real changes in case mix. Therefore, at this time we believe analyses
of nominal case-mix change are provided under a separate authority than
the statutory requirement to evaluate what aggregate expenditures would
have been in absence of the PDGM and the elimination of therapy
thresholds.
We disagree the methodology focuses on the change in average case-
mix weight. Instead, the methodology compares assumed behavior to
actual behavior and determines the impact of those differences on
estimated aggregate expenditures, as required by law. Our discussion of
case-mix in section II.B.2. of this final rule is only used as
supporting evidence in the decrease of therapy utilization.
Comment: A commenter stated the proposed methodology fails to
account for the reduction in average per-episode therapy services under
the PDGM, which would have substantially reduced payments under the
prior case-mix system. The commenter stated that this resulted in a
behavioral offset in CY 2020 that was too high and would carry over
into subsequent years.
Response: We recognize commenters are concerned that the
methodology does not control for therapy. However, as stated
previously, we believe it would be inappropriate to manipulate the data
to assume that behaviors (that is, therapy provision) remain the same
between both payment systems, when calculating the behavior change
adjustment. The commenter is correct that the same methodology will be
used
[[Page 66802]]
in subsequent years, meaning we will not control for therapy in
subsequent years either; however, we remind commenters that the law
requires we annually determine the impact of the assumed versus actual
behavior changes on estimated aggregate expenditures for CY 2020
through CY 2026 and adjust the payment rate to offset for such
increases or decreases in a time and manner determined appropriate.
Keeping behaviors constant when they changed in between payment systems
is inconsistent with this instruction.
It is unclear what the commenter suggested by a ``carry over''
effect. To clarify, the methodology analyzes each year of data
independently and captures any behavior changes which occurred in that
year, including any changes in therapy provision. As such, if any
behaviors continue into subsequent years, these will be captured in the
methodology. We also remind readers the permanent adjustment is based
on the percent change between the actual 30-day base payment rate and
the repriced 30-day base payment rate for the same year of data (for
example, CY 2021).
Comment: Multiple commenters recommended modifying the proposed
methodology to account for changes in therapy utilization and the onset
of the COVID-19 PHE. Specifically, many commenters stated that the
therapy provision under the prior 153-group payment system would be
higher than seen under the PDGM and that CMS should control for the
change in therapy utilization. Many commenters recommended that CMS
adopt the methodology presented by a consulting firm hired by several
interested parties. The consulting firm recommended applying the
Patient Driven Payment Model (PDPM) parity adjustment methodology used
in the CY 2023 Skilled Nursing Facility (SNF) PPS proposed \15\ and
final rule (87 FR 47502) \16\ to CY 2020 PDGM data. The consulting firm
stated ``based on this approach, we found that CY 2020 PDGM payments
were approximately 2.5 percent below budget neutrality (with COVID-19
cases included) and 2.4 percent below budget neutrality with COVID-19
cases excluded.''
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\15\ https://www.federalregister.gov/documents/2022/04/15/2022-07906/medicare-program-prospective-payment-system-and-consolidated-billing-for-skilled-nursing-facilities.
\16\ https://www.govinfo.gov/content/pkg/FR-2022-08-03/pdf/2022-16457.pdf.
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Response: We appreciate the commenters' recommendation to modify
the proposed methodology to control for therapy utilization in
alignment with the SNF parity adjustment methodology. However, the SNF
PPS and HH PPS are fundamentally different; SNFs are paid a per-diem
payment with different case-mix variables, and HHAs are paid under a
bundled payment system. In addition, unlike the requirements of the SNF
PPS parity adjustment, CMS is required, by law, to account for behavior
changes related to the implementation of the PDGM, which CMS did by
comparing actual PDGM claims to what the same utilization (for example,
visits, OASIS responses, etc.) would look like under a 60-day unit of
payment.
Section 1895(b)(4)(B)(ii) of the Act statutorily required the
removal of therapy thresholds in establishing payment, but CMS stated
multiple times (83 FR 56481, 84 FR 60497, 86 FR 62247, and 87 FR 37615)
that therapy must be provided in accordance with the plan of care and
that the PDGM is not limiting or prohibiting the provision of therapy
services. As the data, as well as commenters, indicate that HHAs are
decreasing therapy utilization in response to the removal of a payment
incentive, and not the COVID-19 PHE, we disagree with commenters who
suggest adjusting attributing decreased therapy to the COVID-19 PHE.
Given CMS has not directed HHAs to modify the amount of services
provided, but rather continue providing services in accordance with the
plan of care, then any changes (operational or otherwise) by HHAs are
actual behavior changes due to the implementation of the PDGM. As
stated earlier, this type of response to a new payment system is what
CMS is required by law to evaluate and account for with subsequent
payment rate adjustments. If CMS were to implement the method presented
by the consulting firm, we would need to artificially inflate the
number of therapy visits in CYs 2020 and 2021. As noted above, doing so
is inconsistent with how we read the statute. Instead, the methodology
presented by the consulting firm would be comparing the payment rate
and aggregate expenditures based on the previous assumed behavior
assumptions to a payment rate and aggregate expenditures based on new
assumed behavior assumptions. In other words, any method which controls
for therapy provision (or other behaviors) would result in CMS
comparing assumed versus assumed behavior, which would be inconsistent
with what the statute requires.
Comment: Several commenters stated the proposed methodology does
not compare the behaviors assumed by CMS in establishing the initial
payment rate, but rather creates an artificial target amount to reduce
payments as an attempt to rebase the 30-day payment amount. As such,
many commenters also recommended the alternative methodology presented
by the consulting firm. This methodology recommended comparing the
average CY 2020 30-day episode payments to the estimated average CY
2020 payments with behavioral assumptions used by CMS to set CY 2020
payment rates (based on data from CY 2018 60-day episodes converted to
30-day episodes).
Response: We appreciate the commenters' recommendation; however,
the law requires us to determine the difference between assumed versus
actual behaviors on estimated aggregate expenditures. Therefore, we
continue to believe that the best reading of the law requires us to
retrospectively determine if the 30-day payment amount in CY 2020 and
CY 2021 resulted in the same estimated aggregate expenditures if the
change in the unit of payment and the PDGM case-mix adjustment had not
been implemented and the visits and OASIS responses did not change. As
stated previously, the proposed methodology compares the payment rate
and aggregate expenditures based on assumed behaviors to what the
payment rate and estimated aggregate expenditures would have been using
actual behaviors, which we believe is what the law requires.
Comment: Several commenters stated the PDGM claims cannot be
reasonably regrouped under an alternative payment system.
Response: We disagree with this comment, as both payment systems
(153-group and PDGM) group claims into case-mix groups based on
information available on the claim, the OASIS, and other accessible
administrative data. While the PDGM removed the payment incentive for
excess therapy, it is not only reasonable, but required by law, to
compare the same claims under two different case-mix systems.
Additionally, the proposed methodology is consistent with the original
methodology used in establishing the PDGM. As stated in the CY 2020 HH
PPS final rule with comment period (84 FR 60512), we divided actual 60-
day episodes from the 153-group payment system into two 30-day periods
in order to calculate the 30-day payment amounts. Specifically, we
simulated 9,336,898 30-day periods from 5,471,454 60-day episodes and
using estimated aggregate expenditures we calculated what we thought
the CY 2020 payment rate would need to be, based on assumed behavior
changes. We are replicating this method in reverse to
[[Page 66803]]
evaluate what the CY 2020 base payment rate should have been based on
actual behavior changes and actual utilization.
Comment: Several commenters indicated that CMS did not provide
enough information, specifically the OASIS assessments, to replicate
the methodology. In addition, a commenter stated certain OASIS items
used to group the 60-day episodes are optional in CYs 2020 and 2021,
which may impact the adjustment calculations.
Response: CMS provided a detailed explanation of the methodology in
the CY 2023 HH PPS proposed rule (87 FR 37616) and data that can be
used to carry out the methodology is made available via the Home Health
Claims--OASIS LDS. The LDS file contains all necessary information,
including OASIS, and the proposed rule described the necessary steps
and the methodology used to allow interested parties the ability to
replicate the 60-day simulated episodes. Those replicated 60-day
simulated episodes and the actual 30-day periods would have resulted in
the ability to calculate estimated aggregate expenditures, a repriced
base payment rate, and the permanent and temporary adjustments. If a
particular OASIS item did not have a response, then that item would not
contribute to the functional or clinical score under the 153-group
payment system. If there were certain OASIS items missing on claims,
those items may not have affected the overall functional or clinical
score and corresponding level. Additionally, based on the analysis
shown in the CY 2023 HH PPS proposed rule (87 FR 37615), the data
showed the difference in case-mix weights was largely driven by therapy
utilization and not functional or clinical score. Therefore, if a small
subset of claims had missing OASIS items, it would not significantly
change the overall aggregate expenditures and resulting adjustments.
Comment: A commenter noted approximately 40 percent of diagnosis
codes, which were previously allowed under the 153 case-mix group
system, are no longer accepted as a principal diagnosis under the PDGM.
This commenter stated that this systematic change may have impacted a
provider's coding behavior and could have potentially led to the
simulated 60-day episodes being inaccurately assigned a ``clinical
domain.''
Response: We thank this commenter for their review of the diagnosis
codes. While we acknowledge 41 percent (29,948) of all the diagnosis
codes are not assigned a clinical group under the PDGM,\17\ we disagree
that those unassigned codes would have created any significant
difference in assigning the clinical level in the 153-group case-mix
system. For example, out of all the diagnosis codes available in the
final grouper for the 153-group case mix system, only 22 percent
(15,936) of the diagnosis codes could potentially contribute to the
clinical score. Of those codes which could have contributed to the
clinical score, only 6.99 percent (1,114) of the diagnosis codes are
not accepted as a principal diagnosis under the PDGM. In addition,
there are only three clinical dimensions (Diabetes, Skin 1, and Neuro
1) under the 153-group system which produced a different score when the
diagnosis was counted as a principal diagnosis instead of a secondary
diagnosis. The other clinical dimensions awarded the same points with
either a primary or other diagnosis listed on the OASIS. Therefore,
while approximately 7 percent of the diagnosis codes that contributed
to the clinical score under the 153 case-mix group system are no longer
accepted as principal under the PDGM, many of these codes could still
be used as a secondary diagnosis code and counted towards the clinical
score. Additionally, there were thresholds for the clinical level, and
even if the diagnosis code was accepted as principal, it would not
automatically increase the clinical score to the point where it would
have triggered a new clinical level. In the CY 2023 HH PPS proposed
rule (87 FR 37615), we described an analysis that shows the decline in
the average case-mix weight for simulated 60-day episodes were largely
driven by reductions in therapy utilization instead of the clinical
score (which may be impacted by diagnoses). That means, even if all the
diagnosis codes were accepted under the PDGM, we find it would be
unlikely for the case-mix weight to have increased enough to counteract
the reduction in therapy.
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\17\ Using V03.2.22 of the home health grouper.
---------------------------------------------------------------------------
Comment: A few commenters detailed their interpretation of our
proposed methodology for CY 2020 describing a calculation that uses the
number of 30-day periods (7,618,061) multiplied by the 30-day base
payment rate ($1.936.38) subtracted from actual expenditures ($14.2
million) multiplied by the number of 30-day periods. They stated that
this calculation resulted in a different payment adjustment and
expressed concern that CMS inaccurately calculated the adjustment or
did not provide sufficient detail to allow commenters to accurately
replicate the methodology.
Response: The calculations presented by commenters make several
incorrect assumptions and do not accurately replicate the detailed
methodology described in the CY 2023 HH PPS proposed rule. As stated in
the CY 2023 HH PPS proposed rule (87 FR 37617), after all exclusions
and assumptions were applied, we designated each 60-day episode of care
as a normal episode, PEP, LUPA, or outlier based on the payment
parameters established in the CY 2020 HH PPS final rule with comment
period (84 FR 60478) for 60-day episodes of care. Next, using the
October 2019 3M Home Health Grouper (v8219), we assigned a HIPPS code
to each simulated 60-day episode of care using the 153-group
methodology. Finally, we priced the CY 2020 simulated 60-day episodes
of care using the payment parameters described in the CY 2020 HH PPS
final rule with comment period (84 FR 60537) for 60-day episodes of
care.\18\ The CY 2023 HH PPS proposed rule states that each claim is
paid based on the type of claim (that is, normal, PEP, LUPA, outlier)
and assigned a HIPPS code, which would result in a specific case-mix
weight for each claim. Next, each claim (determined by claim type,
HIPPS) was priced based on the parameters previously described in the
CY 2020 rule for 60-day episodes. CMS did not simply multiply each
claim by the base payment rate, as the commenters suggested, as this
would miscalculate aggregate expenditures. As stated earlier, the
available Home Health Claims--OASIS LDS dataset included all
information for interested parties to determine the claim type and the
associated HIPPS code to accurately estimate aggregate expenditures.
---------------------------------------------------------------------------
\18\ Note, we also performed similar calculations using CY2021
data. When doing this calculation for CY2021 data, we updated the
C2020 payment rates by the payment parameters used to establish the
CY2021 PDGM payment.
---------------------------------------------------------------------------
In addition, the commenters referenced two unrelated numbers. As
stated in the CY 2023 HH PPS proposed rule (87 FR 37618), the 7,618,061
claims were the actual 30-day periods after all exclusions and
assumptions were applied to create the 4,463,549 simulated 60-day
episodes. We then determined what the payment rate should have been to
equal the aggregate expenditures that we calculated from the simulated
CY 2020 60-day episodes. We stated to determine the difference in
aggregate expenditures, we calculated the ``aggregate expenditures for
all CY 2020 PDGM 30-day claims'' using both payment rates (87 FR
37618). In other
[[Page 66804]]
words, the $14.2 billion referenced by the commenter was determined
using the $1,742.52 PDGM payment rate for all 8,423,688 30-day periods,
rather than pricing the 7,618,061 claims at their adjusted (for
example, wage index, case-mix) rate.
Comment: A few commenters stated it was unclear how episode timing
and LUPA thresholds were assigned to the simulated 60-day episodes.
Response: As described in the CY 2023 HH PPS proposed rule, we used
the October 2019 3M Home Health Grouper (v8219) to group 60-day
episodes (87 FR 37617). Episode timing, early and late, were based on
the number of 60-day episodes that occur within a sequence of 60-day
episodes. Additionally, under the 153-group system, any 60-day episode
with 4 or fewer visits was classified as a LUPA (84 FR 60519).
Comment: A commenter recommended recalibrating the regression
coefficients for the 153-group payment model using the simulated 60-day
episodes from the CY 2020 and 2021 data to create an equivalent
approach to compare PDGM to the hypothetical pre-PDGM. The commenter
stated that this would be consistent with CMS's policy to annually
recalibrate and control for changes in home health resource use and
changes in utilization patterns.
Response: Any change in the average case-mix weight is counteracted
through a corresponding change in the payment rate so that aggregate
expenditures are budget neutral regardless of whether recalibration is
applied. Recalibration ensures that payment incentives for future
utilization are aligned with the design of the payment system (for
example, recalibration ensures roughly a third of periods and episodes
are in a particular functional level). While we currently do not
believe there would be any benefit in recalibrating the case-mix
weights for the simulated 60-day episodes, we may consider it in future
rulemaking.
Comment: A few commenters were concerned the exclusions of certain
categories of claim used in the proposed methodology may have biased
the results.
Response: As stated in the CY 2023 HH PPS proposed rule, exclusions
were made to the CY 2020 and 2021 claims data in order to simulate 60-
day episodes of care (87 FR 37617). These exclusions included
overlapping claims, three or more claims linked to the same OASIS, and
whether it was unclear if there would have been a prior or subsequent
30-day period that would have been a part of a simulated 60-day
episode. All of these exclusions were thoroughly discussed in previous
rulemaking cycles. Without these exclusions, we would not be confident
we were appropriately grouping 30-day periods into simulated 60-day
episodes. It is also important to note, for CY 2020 we excluded 9.5
percent of 30-day periods and for CY 2021 we excluded 16.3 percent of
30-day periods. That is, we kept the majority of 30-day periods in each
year (over 90 percent for CY 2020 and over 83 percent for CY 2021). The
excluded 30-day periods would need to show large differences compared
to the episodes that were not excluded in order to significantly change
the estimated aggregate expenditures from the 60-day episodes to
produce significant revisions to our calculations. As we showed in the
monitoring section of the CY 2023 HH PPS proposed rule, utilization
patterns look largely the same in both CYs 2020 and 2021 (87 FR 37605).
Additionally, the permanent adjustment is based on the percent change
between the payment rates (which utilizes the same claims) and the
temporary adjustment is based on the aggregate expenditures of all
claims (that is, no exclusions) using the two payment rates (that is,
the actual payment rate and the budget neutral payment rate with the
permanent adjustment applied). Therefore, we do not expect the small
portion of excluded claims significantly biased our results.
Comment: A commenter stated that in their own analysis of CMS data
they excluded 30-day claims with a primary diagnosis of COVID-19
because they were unable to assign it a HIPPS code.
Response: We appreciate the diligence of the commenter, and are
grateful that they were able to make full analytical use of the
publicly available data. However, simulated 60-day episodes with a
primary diagnosis of COVID-19 would still be assigned a HIPPS under the
V8219 Home Health Grouper from 3M and would not have been excluded from
the repricing analysis unless there was another unrelated issue with
the claim that prevented grouping.
Final Decision: After consideration of all the comments received
and thorough review of section 1895(b) of the Act, we are finalizing
the proposed methodology to evaluate the impact of the differences of
assumed versus actual behavior changes on estimated aggregate
expenditures.
c. Calculating Permanent and Temporary Payment Adjustments
To offset for such increases or decreases in estimated aggregate
expenditures as a result of the impact of differences between assumed
behavior changes and actual behavior changes, in any given year, we
calculate a permanent prospective adjustment by determining what the
30-day base payment amount should have been in order to achieve the
same estimated aggregate expenditures as obtained from the simulated
60-day episodes. This would be our recalculated base payment rate. The
percent change between the actual 30-day base payment rate and the
recalculated 30-day base payment rate would be the permanent
prospective adjustment.
To calculate a temporary retrospective adjustment for each year we
would determine the dollar amount difference between the estimated
aggregate expenditures from all 30-day periods using the recalculated
30-day base payment rate, and the aggregate expenditures for all 30-day
periods using the actual 30-day base payment rate for the same year. In
determining the temporary retrospective dollar amount, we use the full
dataset of actual 30-day periods using both the actual and recalculated
base payment rates to ensure utilization and distribution of claims are
the same. In accordance with section 1895(b)(3)(D)(iii) of the Act, the
temporary adjustment is to be applied on a prospective basis and shall
apply only with respect to the year for which such temporary increase
or decrease is made. Therefore, after we determine the dollar amount to
be reconciled in any given year, we calculate a temporary adjustment
factor to be applied to the base payment rate. The temporary adjustment
factor is based on an estimated number of 30-day periods in the next
year using historical data trends, and as applicable, we control for a
permanent adjustment factor, case-mix weight recalibration neutrality
factor, wage index budget neutrality factor, and the home health
payment update. The temporary adjustment factor is applied last.
d. CY 2020 Results
Using the methodology described previously, we simulated 60-day
episodes using actual CY 2020 30-day periods to determine what the CY
2020 permanent and temporary payment adjustments should be to offset
for such increases or decreases in estimated aggregate expenditures.
For CY 2020, we began with 8,423,688 30-day periods and dropped 603,157
30-day periods that had a claim occurrence code 50 date after October
31, 2020. We also eliminated 79,328 30-day periods that didn't appear
to group with another 30-day period to form a 60-day episode if the 30-
day period had a ``from date'' before January 15, 2020 or a ``through
[[Page 66805]]
date'' after November 30, 2020. This was done to ensure a 30-day period
would not have been part of a 60-day episode that would have overlapped
into CY 2021. Applying the additional exclusions and assumptions as
described previously, an additional 14,062 30-day periods were excluded
from this analysis. Additionally, we excluded 66,469 simulated 60-day
episodes of care where no OASIS information was available in the CCW
VRDC or could not be grouped to a HIPPS due to a missing primary
diagnosis or other reason. Our simulated 60-day episodes of care
produced a distribution of two 30-day periods of care (70.6 percent)
and single 30-day periods of care (29.4 percent). This distribution is
similar to what we found when we simulated 30-day periods of care for
implementation of the PDGM. After all exclusions and assumptions were
applied, the final dataset included 7,618,061 actual 30-day periods of
care and 4,463,549 simulated 60-day episodes of care for CY 2020.
Using the final dataset for CY 2020 (7,618,061 actual 30-day
periods which made up the 4,463,549 simulated 60-day episodes) we
determined the estimated aggregate expenditures using the pre-PDGM HH
PPS data were lower than the estimated aggregate expenditures using the
PDGM HH PPS data (see Table 2). This indicates that actual aggregate
expenditures under the PDGM were higher than if the 153-group payment
system was still in place in CY 2020. As described previously, we
recalculated what the CY 2020 30-day base payment rate should have been
to equal aggregate expenditures that we calculated using the simulated
CY 2020 60-day episodes. The percent change between the two payment
rates would be the permanent adjustment. To calculate the temporary
adjustment for CY 2020, we calculated the difference in aggregate
expenditures for all CY 2020 PDGM 30-day claims using the actual and
recalculated payment rates. This difference between these two aggregate
expenditures, based on actual and recalculated payment rates, is the
retrospective dollar amount needed to offset any increase or decrease
in the estimated aggregate expenditures. Our results are shown in Table
2.
Table 2--CY 2020 Proposed Permanent and Temporary Adjustments
[GRAPHIC] [TIFF OMITTED] TR04NO22.002
As shown in Table 2, a permanent prospective adjustment of -6.52
percent to the CY 2023 30-day payment rate would be required to offset
for such increases in estimated aggregate expenditures in future years.
Additionally, we determined that our initial estimate of base payment
rates required to achieve budget neutrality resulted in excess payments
to HHAs of approximately $873 million in CY 2020. This would require a
temporary adjustment to offset for such increase in estimated aggregate
expenditures for CY 2020.
e. CY 2021 Results
We will continue the practice of using the most recent complete
home health claims data at the time of rulemaking. The CY 2021 analysis
presented in the CY 2023 HH PPS proposed rule was considered
``preliminary'' and as more data became available from the latter half
of CY 2021, we updated our results. Using the methodology described
previously, we simulated 60-day episodes using actual CY 2021 30-day
periods to determine what the permanent and temporary payment
adjustments should be to offset for such increases or decreases in
estimated aggregate expenditures as a result of the impact of
differences between assumed behavior changes and actual behavior
changes. For CY 2021, we began with 9,269,971 30-day periods of care
and dropped 570,882 30-day periods of care that had claim occurrence
code 50 date after October 31, 2021. We also excluded 968,434 30-day
periods of care that had claim occurrence code 50 date before January
1, 2021 to ensure the 30-day period would not be part of a simulated
60-day episode that began in CY 2020. Applying the additional
exclusions and assumptions as described previously, an additional 5,868
30-day periods were excluded.
Additionally, we excluded 14,302 simulated 60-day episodes of care
where no OASIS information was available in the CCW VRDC or could not
be grouped to a HIPPS due to a missing primary diagnosis or other
reason. Our simulated 60-day episodes of care produced a distribution
of two 30-day periods of care (70.0 percent) and single 30-day periods
of care (30.0 percent) that was similar to what we found when we
simulated two 30-day periods of care for implementation of the PDGM.
After all exclusions and assumptions were applied, the final dataset
included 7,703,261 actual 30-day periods of care and 4,529,498
simulated 60-day episodes of care for CY 2021.
Using the final dataset for CY 2021 (7,703,261 actual 30-day
periods which made up the 4,529,498 simulated 60-day episodes) we
determined the estimated aggregate expenditures under the pre-PDGM HH
PPS was lower than the actual estimated aggregate expenditures under
the PDGM HH PPS. This indicates that aggregate expenditures under the
PDGM were higher than if the 153-group payment system was still in
place in CY 2021. As described previously, we recalculated what the CY
2021 30-day base payment rate should have been to equal aggregate
expenditures that we calculated using the simulated CY 2021 60-day
episodes. We note, the actual CY 2021 base payment rate of $1,901.12
does not account for any adjustments previously made for CY 2020 and
therefore, to evaluate changes for only CY 2021 we need to control for
the -6.52 percent prospective adjustment that we determined for CY
2020. Therefore, using the recalculated CY 2020 base
[[Page 66806]]
payment rate of $1,742.52, multiplied by the CY 2021 wage index budget
neutrality factor (0.9999) and the CY 2021 home health payment update
(1.020), the CY 2021 base payment rate for assumed behavior would have
been $1,777.19. The percent change between the two payment rates would
be the permanent adjustment (assuming the -6.52 percent adjustment was
already taken). Next, we calculated the difference in aggregate
expenditures for all CY 2021 PDGM 30-day claims using the actual
($1,901.12) and recalculated ($1,751.90) payment rates. This difference
is the retrospective dollar amount needed to offset payment. Our
results are shown in Table 3.
Table 3--CY 2021 Proposed Permanent and Temporary Adjustments
[GRAPHIC] [TIFF OMITTED] TR04NO22.003
As shown in Table 3, an additional permanent prospective adjustment
of -1.42 percent (assuming the -6.52 percent adjustment was already
taken) would be required to offset for such increases in estimated
aggregate expenditures in future years. Additionally, we determined
that our initial estimate of the base payment rates required to achieve
budget neutrality resulted in excess expenditures of approximately $1.2
billion in CY 2021. This would require a temporary adjustment factor to
offset for such increases in estimated aggregate expenditures for CY
2021.
f. CY 2023 Permanent and Temporary Adjustments
The percent change between the actual CY 2021 base payment rate of
$1,901.12 and the CY 2021 recalculated base payment rate of $1,751.90
is the total permanent adjustment for CYs 2020 and 2021, because no
previous adjustments were applied to the CY 2020 rate to reset the CY
2021 rate. The summation of the dollar amount for CYs 2020 and 2021 is
the amount that represents the temporary payment adjustment to offset
for increased aggregate expenditures in both CYs 2020 and 2021. Our
results are shown in Table 4 and 5.
Table 4--Total Permanent Adjustment for CYs 2020 and 2021
[GRAPHIC] [TIFF OMITTED] TR04NO22.004
Table 5--Total Temporary Adjustment for CYs 2020 and 2021
[GRAPHIC] [TIFF OMITTED] TR04NO22.005
To offset the increase in estimated aggregate expenditures for CYs
2020 and 2021 based on the impact of the differences between assumed
and actual behavior changes, CMS would need to apply a -7.85 percent
permanent adjustment to the CY 2023 base payment rate as well as
implement a temporary adjustment of approximately $2.1 billion to
reconcile retrospective overpayments in CYs 2020 and 2021. We recognize
that applying the full permanent and temporary adjustment immediately
would result in a significant negative adjustment in a single year.
However, if the PDGM base 30-day payment rate remains higher than it
should be, then there would likely be a compounding effect, potentially
creating the need for an even larger reduction to adjust for behavioral
[[Page 66807]]
changes in future years. Therefore, we proposed to apply only the
permanent adjustment to the CY 2023 base payment rate. We believed this
could mitigate the need for a larger permanent adjustment and could
reduce the amount of any additional temporary adjustments in future
years. We solicited comments on the application of only the permanent
payment adjustment to the CY 2023 30-day payment rate. Additionally, we
solicited comments on how best to collect the temporary payment
adjustment of approximately $2.0 billion for CYs 2020 and 2021.
Comment: MedPAC supported the proposed payment reduction and stated
it is consistent with their recommendation of a five percent reduction
to the base payment rate in the March 2022 report to Congress.\19\
MedPAC commented CMS should decrease home health payments to better
align payments with actual incurred costs, as they found that Medicare
margins for freestanding agencies averaged more than 20 percent from
2001 to 2020.
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\19\ https://www.medpac.gov/wp-content/uploads/2022/03/Mar22_MedPAC_ReportToCongress_v2_SEC.pdf.
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Response: We appreciate the supportive comment by MedPAC.
Comment: Several commenters expressed concern that the proposed
permanent behavior assumption adjustment would negatively impact home
health providers' business operations. These commenters stated that the
negative adjustment does not consider operational and financial
challenges providers are currently experiencing related to inflation,
staffing shortages, rising costs of gasoline, and medical supplies,
including personal protective equipment (PPE). Commenters also stated
that staffing shortages could be the reason for the decline in visits.
They stated that a negative 7.69 percent behavior assumption adjustment
will cause many agencies to operate with negative margins. Commenters
also expressed concerns that the proposed behavior assumption
adjustment penalizes HHAs and would put access to home health in
jeopardy and impact the quality of care given to home health
beneficiaries. Other commenters stated that CMS should utilize the
existing program integrity measures to identify and target specific
agencies that have excess profit margins rather than impose an across
the board reduction for all agencies, and that CMS should use its
enforcement authority to target HHAs that are cutting utilization or
engaged in other payment-driven behaviors to the detriment of patients.
Another commenter stated that CMS should look for ways to reward ``good
provider behavior.''
Response: We recognize concerns around staffing and appreciate the
commenters' recommendation. However, the statutorily required permanent
and temporary adjustments due to behavior changes is neither to
``reward'' nor ``penalize'' providers. The proposed methodology
controls for overall utilization by using a single year of utilization
data priced under two payment systems to estimate aggregate
expenditures. As such, any effects of staffing issues would be present
in the data under both systems. The payment adjustment is solely to
offset for any increase or decrease in estimated aggregate expenditures
between the two payment systems.
We also recognize the impact inflation and the COVID-19 PHE has had
on healthcare providers, however, we note that in its March 2022 Report
to the Congress,\20\ MedPAC states that Medicare margins increased
under the PDGM, from 15.4 percent in 2019 to 20.2 percent in 2020.
Additionally, they projected margins for home health agencies in 2022
will be roughly 17.0 percent. Furthermore, MedPAC stated in their
report that the Commission found positive access, quality, and
financial indicators for the sector, with average margins of 20.2
percent for freestanding HHAs in 2020, even though the cost per 30-day
period increased by 3.1 percent in this year. We believe that these
margins, despite economic challenges, demonstrate that the payment
rate, along with the market basket update, are more than adequate to
support business operations. Finally, while we appreciate the
commenters' suggestion regarding targeted claim review for specific
home health agencies, we do not believe targeted program integrity
efforts would mitigate behavioral changes resulting from a case-mix
system. We previously addressed this suggestion in the CY 2016 HH PPS
and CY 2019 HH PPS final rules (80 FR 68421 and 83 FR 56455,
respectively). As we previously noted, this strategy is not viable,
given the widespread nature of coding changes and improvements, small
sample sizes of agencies with significant nominal case-mix across
different classes of agencies, and difficulty in precisely
distinguishing the agencies that engage in abusive coding from all
others. Additionally, we reiterate that we are required to make
temporary and permanent payment adjustments to the national,
standardized 30-day period payment rate based on the impact of
differences between assumed versus actual behavior change, in
accordance with sections 1895(b)(3)(D)(ii) and (iii) to offset for such
increases or decreases in estimated aggregate expenditures. These
adjustments are not intended to account for coding abuses, but rather
behavior changes CMS observes across the system. As such, we do not
believe that reducing the 30-day payment rate only for agencies with
high margins is the best way to implement the by statute.
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\20\ https://www.medpac.gov/wp-content/uploads/2022/03/Mar22_MedPAC_ReportToCongress_v2_SEC.pdf.
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Comment: A few commenters also stated that reduced payment from the
permanent behavior assumption adjustment would exacerbate the already
reduced payment that home health agencies receive from Medicare
Advantage and Medicaid. A commenter stated that CMS fails to consider
that the margins associated with a traditional Medicare beneficiary
subsidize the care of managed Medicare Advantage and Medicaid patients.
Response: While industry representatives contend that Medicare
payments should subsidize payments from other payers (Medicare
Advantage and Medicaid), we disagree. Medicare has never set payments
in order to cross-subsidize other payers. Section 1861(v)(1)(A) of the
Act states ``under the methods of determining costs, the necessary
costs of efficiently delivering covered services to individuals covered
by the insurance programs established by this title will not be borne
by individuals not so covered, and the costs with respect to
individuals not so covered will not be borne by such insurance
programs.'' There is no statutory authority to take the payment rates
of other payers into account when setting Medicare fee-for-service
payment rates.
Comment: Many commenters recommended a phased-in approach over
several years for the permanent and temporary adjustments.
Specifically, a commenter indicated that a phase-in should reduce
payments by no more than 2 percent annually until the adjustment is
achieved. Another commenter recommended the temporary adjustment
starting no earlier than 2026. A few commenters recommended postponing
any adjustments until more data are made available.
Response: We thank the commenters for their recommendations. We
recognize the desire to reduce the payment adjustment; however, note
that any delay in the permanent adjustment
[[Page 66808]]
through a phase-in approach may require larger temporary and permanent
adjustments in the future. While we didn't propose a temporary
adjustment in CY 2023, we will consider the best approach, including a
phase-in, when we do propose the temporary adjustment in future rule-
making.
Final Decision: We stand by the methodology as described previously
and maintain our authority to finalize the adjustment as proposed. But
we recognize the potential hardship of implementing the full -7.85
percent permanent adjustment in a single year. As we have the
discretion to implement any adjustment in a time and manner determined
appropriate, we are finalizing only a -3.925 percent (half of the -7.85
percent) permanent adjustment for CY 2023. However, we note the
permanent adjustment to account for actual behavior changes in CYs 2020
and 2021 should be -7.85 percent. Therefore, applying a -3.925 percent
permanent adjustment to the CY 2023 30-day payment rate would not
adjust the rate fully to account for differences in behavior changes on
estimated aggregate expenditures during those years, as well as in CYs
2022 and 2023. We would have to account for that difference, and any
other potential adjustments needed to the base payment rate, to account
for behavior change based on data analysis in future rulemaking.
While we did not propose to adjust the CY 2023 payment rate using
our temporary adjustment authority for CYs 2020 and 2021, we did
solicit comments on how best to implement the temporary adjustment.
Comment: MedPAC recommended CMS adjust temporary payment rates over
several years, such as adjusting the aggregate rate by $502.5 million
per year for CYs 2023 through 2026. MedPAC strongly recommended
beginning these reductions immediately to avoid potential larger
reductions in future years.
Response: We thank MedPAC for their recommendation. However, while
CMS proposed the methodology for calculating both the permanent and
temporary adjustments, in the CY 2023 HH PPS proposed rule we did not
propose collecting the $2.0 billion temporary adjustment for CYs 2020
and 2021 beginning in CY 2023. We did solicit comments on how best to
collect the temporary payment adjustment and will take these comments
into consideration when we propose any temporary adjustments in future
rulemaking.
Comment: Many commenters recommended a phase-in over several years
for the temporary adjustment and another year delay before recovering
any overpayments. Another commenter stated the recoupment should not be
applied equally to all HHAs, but rather CMS should target recoupment
based on agency level analyses to determine those HHAs who had high
margins, egregious behavior changes, and ``cherry pick'' patients.
Response: We appreciate the commenters recommendation. We note that
this is not a recoupment in the legal sense, but, as the statute
specifies at section 1895(b)(3)(D)(iii) of the Act, a temporary
adjustment to account for retrospective behavior. While there may be
different business models between HHAs, those practices are outside the
scope of this policy. Specifically, we believe the best way to
interpret the statute is to apply any adjustments (permanent and
temporary) to the national, standardized 30-day period payment rate on
a prospective basis.
Final Decision: We thank commenters for their suggestions about how
to implement the temporary payment adjustments and will consider them
in future rulemaking.
3. Reassignment of Specific ICD-10-CM Codes Under the PDGM
a. Background
The 2009 final rule, ``HIPAA Administrative Simplification:
Modifications to Medical Data Code Set Standards To Adopt ICD-10-CM and
ICD-10-PCS'' \21\ (74 FR 3328, January 16, 2009), set October 1, 2013,
as the compliance date for all covered entities under the Health
Insurance Portability and Accountability Act of 1996 (HIPAA) to use the
International Classification of Diseases, 10th Revision, Clinical
Modification (ICD-10-CM) and the International Classification of
Diseases, 10th Revision, Procedure Coding System (ICD-10-PCS) medical
data code sets. The ICD-10-CM diagnosis codes are granular and
specific, and provide HHAs a better opportunity to report codes that
best reflect the patient's conditions that support the need for home
health services. However, as stated in the CY 2019 HH PPS final rule
with comment period (83 FR 56473), because the ICD-10-CM is
comprehensive, it also contains many codes that may not support the
need for home health services. For example, diagnosis codes that
indicate death as the outcome are Medicare covered codes, but are not
relevant to home health. In addition, diagnosis and procedure coding
guidelines may specify the sequence of ICD-10-CM coding conventions.
For example, the underlying condition must be listed first (for
example, Parkinson's disease must be listed prior to Dementia if both
codes were listed on a claim). Therefore, not all the ICD-10-CM
diagnosis codes are appropriate as principal diagnosis codes for
grouping home health periods into clinical groups or to be placed into
a comorbidity subgroup when listed as a secondary diagnosis. As such,
each ICD-10-CM diagnosis code is assigned, including those diagnosis
codes designated as ``not assigned'' (NA), to a clinical group and
comorbidity subgroup within the HH PPS grouper software (HHGS). We
reminded commenters the ICD-10-CM diagnosis code list is updated each
fiscal year with an effective date of October 1st and therefore, the HH
PPS is generally subject to a minimum of two HHGS releases, one in
October and one in January of each year, to ensure that claims are
submitted with the most current code set available. Likewise, there may
be new ICD-10-CM diagnosis codes created (for example, codes for
emergency use) or a new or revised edit in the Medicare Code Editor
(MCE) so an update to the HHGS may occur on the first of each quarter
(January, April, July, October).
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\21\ https://www.federalregister.gov/documents/2009/01/16/E9-743/hipaa-administrative-simplification-modifications-to-medical-data-code-set-standards-to-adopt.
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b. Methodology for ICD-10-CM Diagnosis Code Assignments
Although it is not our intent to review all ICD-10-CM diagnosis
codes each year, we recognize that occasionally some ICD-10-CM
diagnosis codes may require changes to their assigned clinical group
and/or comorbidity subgroup. For example, there may be an update to the
MCE unacceptable principal diagnosis list, or we receive public
comments from interested parties requesting specific changes. Any
addition or removal of a specific diagnosis code to the ICD-10-CM code
set (for example, three new diagnosis codes, Z28.310, Z28.311 and
Z28.39, for reporting COVID-19 vaccination status were effective April
1, 2022) or minor tweaks to a descriptor of an existing ICD-10-CM
diagnosis code generally would not require rulemaking and may occur at
any time. However, if an ICD-10-CM diagnosis code is to be reassigned
from one clinical group and/or a comorbidity subgroup to another, which
may affect payment, then we believe it is appropriate to propose these
changes through notice and comment rulemaking.
We rely on the expert opinion of our clinical reviewers (for
example, nurse
[[Page 66809]]
consultants and medical officers) and current ICD-10-CM coding
guidelines to determine if the ICD-10-CM diagnosis codes under review
for reassignment are significantly similar or different to the existing
clinical group and/or comorbidity subgroup assignment. As we stated in
the CY 2018 HH PPS proposed rule (82 FR 35313), the intent of the
clinical groups is to reflect the reported principal diagnosis,
clinical relevance, and coding guidelines and conventions. Therefore,
for the purposes of assignment of ICD-10-CM diagnosis codes into the
PDGM clinical groups we would not conduct additional statistical
analysis as such decisions are clinically based and the clinical groups
are part of the overall case-mix weights.
As we noted in the CY 2019 HH PPS final rule with comment period
(83 FR 56486), the home health-specific comorbidity list is based on
the principles of patient assessment by body systems and their
associated diseases, conditions, and injuries to develop larger
categories of conditions that identified clinically relevant
relationships associated with increased resource use meaning the
diagnoses have at least as high as the median resource use and are
reported in more than 0.1 percent of 30-day periods of care. If
specific ICD-10-CM diagnosis codes are to be reassigned to a different
comorbidity subgroup (including NA), we will first evaluate the
clinical characteristics (as discussed previously for clinical groups)
and if the ICD-10-CM diagnosis code does not meet the clinical
criteria, then no reassignment will occur. However, if an ICD-10-CM
diagnosis code does meet the clinical criteria for a comorbidity
subgroup reassignment, then we will evaluate the resource consumption
associated with the ICD-10-CM diagnosis codes, the current assigned
comorbidity subgroup, and the proposed (reassigned) comorbidity
subgroup. This analysis is to ensure that any reassignment of an ICD-
10-CM diagnosis code (if reported as secondary) in any given year would
not significantly alter the overall resource use of a specific
comorbidity subgroup. For resource consumption, we use non-LUPA 30-day
periods to evaluate the total number of 30-day periods for the
comorbidity subgroup(s) and the ICD-10-CM diagnosis code, the average
number of visits per 30-day periods for the comorbidity subgroup(s) and
the ICD-10-CM diagnosis code, and the average resource use for the
comorbidity subgroup(s) and the ICD-10-CM diagnosis code. The average
resource use measures the costs associated with visits performed during
a home health period, and was previously described in the CY 2019 HH
PPS final rule with comment period (83 FR 56450).
c. ICD-10-CM Diagnosis Code Reassignments to a PDGM Clinical Group or
Comorbidity Subgroup
The following section proposed reassignment of 320 diagnosis codes
to a different clinical group when listed as a principal diagnosis,
reassignment of 37 diagnosis codes to a different comorbidity subgroup
when listed as a secondary diagnosis, and the establishment of a new
comorbidity subgroup for certain neurological conditions and disorders.
Due to the amount of diagnosis codes proposed for reassignment this
year, we posted the ``CY 2023 Proposed Reassignment of ICD-10-CM
Diagnosis Codes for HH PDGM Clinical Groups and Comorbidity Subgroups''
supplemental file on the Home Health Prospective Payment System
Regulations and Notices web page.\22\
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\22\ Home Health Prospective Payment System Regulations and
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Comment: Several commenters supported the general refinement of
coding assignments, including all the proposed coding changes. A
commenter stated that the changes will help to more accurately reflect
patients' needs and why they need home health services, rather than
using ``pain'' as a diagnosis.
Response: We thank these commenters for their support and agree
that the changes will provide more specific information related to the
needs of the patient under a home health plan of care.
Comment: Several commenters expressed concern that reassignment of
clinical groups for principal diagnosis codes would result in an access
to care issue. For example, commenters were concerned that a
reassignment of principal diagnosis codes from a clinical group to no
clinical group, would change the case-mix weight and reimbursement, and
that the HHA may refuse the patient, thus restricting access to care.
There was also concern that if the clinical group changed (for example,
MS-Rehab to Wounds), the HHA would restrict the type of services
provided, such as physical therapy, also restricting access to care.
Response: It is unclear why commenters believe any reassignments
would restrict access to care, and note that the CoPs at Sec. 484.60
state that the individualized plan of care must specify the care and
services necessary to meet the patient-specific needs as identified in
the comprehensive assessment, including identification of the
responsible discipline(s), and the measurable outcomes that the HHA
anticipates will occur as a result of implementing and coordinating the
plan of care. Services must be furnished in accordance with accepted
standards of practice. The purpose of any reassignment is to ensure
that diagnoses are assigned to the appropriate clinical group or
comorbidity subgroup and to align as closely as possible to ICD-10-CM
coding conventions and MCE edits. These edits may have payment effects
but should not result in any change in clinical practice or
availability of services, unless the agency is failing to act in
accordance with the plan of care.
Comment: A few commenters requested that CMS modify the clinical
groups to accept and include diagnosis codes which may drive a home
health need. Specifically, commenters requested allowing R29.6
(repeated falls), R54 (age-related physical debility), R26.89 (other
abnormalities of gait and mobility), R42.82 (altered mental status,
unspecified), and M62.81(muscle weakness (generalized)) to be accepted
as a principal diagnosis and placed into a clinical group for payment.
Response: We thank the commenters for their coding recommendations.
However, we did not propose to assign any of the R-codes to a clinical
group and therefore, such suggestions are out of scope for this rule.
We remind commenters that R-codes are codes describing symptoms, signs,
and abnormal clinical and laboratory findings, not elsewhere
classified) and are generally not allowed as a principal diagnosis
(except for a few) in accordance with ICD-10-CM coding guidelines. Any
changes to the acceptable principal diagnosis list for home health,
including the addition of new ICD-10 codes, would have to go through
notice and comment rulemaking.
(1) Clinical Group Reassignment of Certain Unspecified Diagnosis Codes
We reminded readers that in the CY 2019 HH PPS final rule with
comment period (83 FR 56473) we stated that whenever possible, the most
specific code that describes a medical disease, condition, or injury
should be used. Generally, ``unspecified'' codes are used when there is
lack of information about location or severity of medical conditions in
the medical record. However, we would expect a provider to
[[Page 66810]]
use a precise code whenever more specific codes are available.
Furthermore, if additional information regarding the diagnosis is
needed, we would expect the HHA to follow-up with the referring
provider in order to ensure the care plan is sufficient in meeting the
needs of the patient. For example, T14.90 ``Injury, unspecified'' does
not provide sufficient information (for example, the type and extent of
the injury) that would be necessary in care planning for home health
services. The ICD-10-CM code set also includes laterality. We believe a
home health clinician should not report an ``unspecified'' code if that
clinician can identify the side or site of a condition. For example, a
home health clinician should be able to state whether a fracture of the
arm is on the right or left arm. In the FY 2022 Inpatient Prospective
Payment System/Long-Term Care Hospital Prospective Payment System
(IPPS/LTCH PPS) final rule (86 FR 44940 through 44943), CMS finalized
the implementation of a new MCE to expand the list of unacceptable
principal diagnoses for ``unspecified'' ICD-10-CM diagnosis codes when
there are other diagnosis codes available in that diagnosis code
subcategory that further specify the anatomic site. As such, we
reviewed all the ICD-10-CM diagnosis codes where ``unspecified'' is
used and not just the ones listed on the new MCE edit. We identified
159 ICD-10-CM diagnosis codes that are currently accepted as a
principal diagnosis that have more specific codes available for such
medical conditions that would more accurately identify the primary
reason for home health services. For example, S59.109A (Unspecified
physeal fracture of upper end of radius, unspecified arm, initial
encounter for closed fracture) does not specify which arm has the
fracture; whereas, S59.101A (Unspecified physeal fracture of upper end
of radius, right arm, initial encounter for closed fracture) does
indicate the fracture is on the right arm and therefore more accurately
identifies the primary reason for home health services. Therefore, in
accordance with our expectation that the most precise code be used, we
stated that we believe these 159 ICD-10 CM diagnosis codes are not
acceptable as principal diagnoses and we proposed to reassign them to
``no clinical group'' (NA). We refer readers to Table 1.A of the CY
2023 Proposed Reassignment of ICD-10-CM Diagnosis Codes supplemental
file \23\ for the list of the 159 unspecified diagnosis codes.
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\23\ Home Health Prospective Payment System Regulations and
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We also determined that B78.9 strongyloidiasis, unspecified was
assigned to clinical group C (Wounds), and should be reassigned to
clinical group K (MMTA--Infectious Disease, Neoplasms, and Blood-
Forming Diseases) because it would be consistent with the assignment of
the other strongyloidiasis codes. We also identified that N83.201
unspecified ovarian cyst, right side was assigned to clinical group A
(MMTA--Other) and should be reassigned to clinical group J (MMTA--
Gastrointestinal Tract and Genitourinary System) because it would be
consistent with the assignment of other ovarian cyst codes. We proposed
to reassign these two ICD-10-CM diagnosis codes' clinical groups as
shown in Table 6.
Table 6--Reassignment of Clinical Group for ``Unspecified'' ICD-10-CM
Diagnosis Codes
[GRAPHIC] [TIFF OMITTED] TR04NO22.006
Comment: Several commenters were concerned about the proposal to
reassign the 159 ICD-10-CM codes to no clinical group (NA) when listed
as a principal diagnosis. Commenters stated that only 45 of the 159
ICD-10-CM codes were listed on the MCE 20 list of unacceptable
principal diagnoses and that the home health Grouper would be
inconsistent with the other MCE edits. While commenters agreed the most
specific documentation should be reflected in medical records to assign
the most specific code available, they noted that there are certain
circumstances in which an unspecified code should be accepted as a
principal diagnosis according to the MCE manual and ICD-10-CM Official
Guidelines for Coding and Reporting.\24\ In addition, commenters stated
that obtaining additional information may be burdensome to certain
HHAs.
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\24\ https://www.cms.gov/files/document/fy-2022-icd-10-cm-coding-guidelines-updated-02012022.pdf.
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Response: We thank interested parties for their comments. As we
noted in the CY 2023 HH PPS proposed rule and previously in this final
rule, we did not limit our review of unspecified codes only to those on
the MCE edit list. Instead, the release of the MCE 20 edit prompted our
review of all unspecified codes currently assigned to a clinical group
when listed as a principal diagnosis.
We also recognize the desire for a consistent unspecified edit for
all health care entities; however, this is not feasible given the vast
differences across Medicare benefits and their associated payment
systems. As such, CMS has created different groupers to institute edits
to a specific program. For example, home health uses the Home Health
Resource Group (HHRG), while inpatient rehabilitation facilities use
Case Mix Group (CMG), both of which are different from the inpatient
and outpatient grouper software.
We acknowledge the ICD-10-CM Official Guidelines for Coding and
Reporting Section I.B.18 states ``If a definitive diagnosis has not
been established by the end of the encounter, it is appropriate to
report codes for sign(s) and/or symptom(s) in lieu of a definitive
diagnosis. When sufficient clinical information is not known or
available about a particular health condition to assign a more specific
code, it is acceptable to report the appropriate ``unspecified'' code
(for example, a diagnosis of pneumonia has been determined, but not the
specific type). Unspecified codes should be reported when they are the
codes that most accurately reflect what is known about the patient's
condition at the time of that particular encounter.'' However, as
previously stated in the CY 2019 HH PPS final rule with comment period
(83
[[Page 66811]]
FR 56473) and the CY 2023 HH PPS proposed rule, ``unspecified'' codes
are used when the record lacks information about location or severity
of medical conditions if additional information regarding the diagnosis
is needed, we would expect the HHA to follow-up with the referring
provider in order to ensure the care plan is sufficient in meeting the
needs of the patient. Of the proposed 159 ICD-10-CM diagnosis codes, 85
percent (136 codes) lacked information about location (that is,
laterality) while the remaining 15 percent (23 codes) lacked
information about severity. We understand commenters concerns that many
home health visits may be subsequent to the initial injury or disease
and the medical record may lack information. However, we still believe
this supports the need for more specific codes in order for the
provider to appropriately provide services in alignment with the plan
of care.
In addition, per the FY 2022 IPPS/LTCH final rule (86 FR 44943),
if, upon review, additional information to identify the laterality from
the available medical record documentation by any other clinical
provider is unable to be obtained, or there is documentation in the
record indicating that the physician is clinically unable to determine
the laterality because of the nature of the disease/condition, then the
provider must enter that information into the remarks section. If there
is no language entered into the remarks section as to the availability
of additional information to specify laterality and the provider
submits the claim for processing, the claim would then be returned to
the provider. While Medicare systems may allow an edit to be bypassable
(for example, the NOA timelines extension), it does not currently allow
an unacceptable home health principal diagnosis to be bypassable. We
may consider adding certain additional edits as bypassable in future
rulemaking.
In response to the 15 codes where more specific codes identify
severity, rather than laterality, we further evaluated if a more
specific code would be appropriate in determining the plan of care and
home health services required. We determined that 11 of the codes not
only had more specific codes, but there are similar unspecified codes
in the same subchapter which we do not accept as a principal diagnosis.
For example, for pregnancy-related codes, we expect the trimester to be
specified. However, based on comments and further review we determined
the four codes listed in Table 7 below should remain with their current
assigned clinical group when listed as a principal diagnosis as we
believe the information in these codes is sufficient to establish a
home health plan of care to address such conditions.
Table 7--Unspecified Diagnosis Codes Remaining in Clinical Groups
[GRAPHIC] [TIFF OMITTED] TR04NO22.007
Final Decision: After consideration of the public comments
received, we are modifying our proposal of the 159 ICD-10 CM
``unspecified'' diagnosis codes to be reassigned to N/A by excluding
the four codes listed in Table 7. Instead we are finalizing the
reassignment of the remaining 155 ICD-10 CM diagnosis codes from their
current assigned clinical group to NA when the codes are listed as a
principal diagnosis. We remind readers that if a claim cannot be
assigned a clinical group, the claim will be returned to the provider
for further information. We are also finalizing the reassignment of
B78.9 (strongyloidiasis, unspecified) from clinical group C (Wounds) to
clinical group K (MMTA--Infectious Disease, Neoplasms, and Blood-
Forming Diseases) and the reassignment of N83.201 (unspecified ovarian
cyst, right side) from clinical group A (MMTA-Other) to clinical group
J (MMTA--Gastrointestinal Tract and Genitourinary System) when listed
as the principal diagnoses. We urge interested parties to review the
final HH Clinical Group and Comorbidity Adjustment Diagnosis list
released with this final rule, as well as the 3M Grouper January 2023
HH PPS Grouper Software HH PDGM v04.0.23, when determining if an ICD-10
CM diagnosis code is accepted as a principal diagnosis and assigned a
clinical group.
(2) Clinical Group Reassignment of Gout-Related Codes
We identified that certain groups of gout-related ICD-10-CM
diagnosis codes, such as idiopathic gout and drug-induced gout, were
assigned to clinical group E (musculoskeletal rehabilitation) when
listed as a principal diagnosis. However, other groups of gout related
ICD-10-CM diagnosis codes, such as gout due to renal impairment, were
assigned to ``no clinical group'' (NA). Therefore, we reviewed all
gout-related codes and determined there are 144 gout related codes with
an anatomical site specified, not currently assigned to a clinical
group that should be moved to clinical group E (musculoskeletal
rehabilitation) for consistency with the aforementioned gout codes. In
the ICD-10-CM code set, gout codes and osteoarthritis codes are found
in chapter 13 Diseases of the Musculoskeletal System and Connective
Tissue (M00-M99). Gout and osteoarthritis affect similar joints such as
the fingers, toes, and knees and they can initially be treated with
medications. However, generally, as a part of a treatment program, once
the initial inflammation
[[Page 66812]]
is reduced, physical therapy can be started to stretch and strengthen
the affected joint to restore flexibility and joint function. Because
those cases may require therapy, we believe gout codes are more
appropriately placed into MS rehab along with other codes affecting the
musculoskeletal system. We refer readers to Table 1.B of the CY 2023
Proposed Reassignment of ICD-10-CM Diagnosis Codes supplemental file
for the list of the 144 gout related codes. We did not receive comments
on this proposal and therefore are finalizing the reassignment of these
144 gout-related ICD-10-CM diagnosis codes to clinical group E
(musculoskeletal rehabilitation) without modification.
(3) Clinical Group Reassignment of Crushing Injury-Related Codes
We identified 12 ICD-10-CM diagnosis codes related to crushing
injury of the face, skull, and head that warrant reassignment. These
codes are listed in Table 8.
Table 8--ICD-10-CM Diagnosis Codes Related to Crushing Injury of Face,
Skull, and Head
[GRAPHIC] [TIFF OMITTED] TR04NO22.008
Our clinical advisors reviewed the 12 ICD-10-CM diagnosis codes
related to crushing injury of the face, skull, and head and determined
that reassignment of these codes to clinical group B (Neurological
Rehabilitation) is clinically appropriate because they are consistent
with other diagnosis codes in clinical group B that describe injuries
requiring neurological rehabilitation. We did not receive comments on
this proposal and therefore are finalizing the reassignment of the ICD-
10-CM diagnosis codes listed in Table 8 from clinical group A (MMTA-
Other) to clinical group B (Neurological Rehabilitation) without
modification.
(4) Clinical Group Reassignment of Lymphedema-Related Codes
We received questions from interested parties regarding three
lymphedema codes with conflicting clinical group assignments when
listed as a principal diagnosis. These codes are listed in Table 9.
Table 9--ICD-10-CM Diagnosis Code Related to Lymphedema
[GRAPHIC] [TIFF OMITTED] TR04NO22.009
Our clinical advisors reviewed the three ICD-10-CM diagnosis codes
related to lymphedema and determined that assessing and treating
lymphedema is similar to the assessment and staging of wounds. It
requires the assessment of pulses, evaluation of the color and amount
of drainage, and measurement. In addition, some lymphedema can require
compression bandaging, similar to wound care. Because of these
similarities, we determined the reassignment of the three ICD-10-CM
diagnosis codes related to lymphedema to clinical group C (Wounds) is
clinically appropriate. Therefore, we proposed to reassign the ICD-10-
CM diagnosis codes listed in Table 9 from clinical group E
(Musculoskeletal Rehabilitation) and clinical group A (MMTA-Other) to
clinical group C (Wounds).
Comment: Several commenters questioned whether the reassignment of
lymphedema to clinical group C (wounds) would impact the type of
practitioner who would be able to treat the wound or limit patient
access to resources such as complete decongestive therapy including
manual lymph drain
Response: We thank the commenters for their concern. The
reassignment of lymphedema, or any other code, would not impact the
type of practitioner providing services, as long as the allowed
practitioner can perform the care under their scope of practice. In
addition, per the CoPs, HHAs should continue to provide services in
accordance with the plan of care.
[[Page 66813]]
Comment: A commenter questioned if CMS considers lymphedema a wound
type and if we believe lymphedema is correlated to venous disease/
wounds.
Response: Although CMS does not consider lymphedema to be a wound
type, we believe clinically that the home health services needed to
treat and manage lymphedema are equivalent to the time and services
needed for managing an open wound regardless of the precipitating
condition that resulted in lymphedema. Treatment for lymphedema focuses
on reducing swelling and minimizing complications. As such, treatment
could involve exercises, manual lymphatic drainage, compression
bandages or garments, sequential pneumatic compression, and even wound
care for any skin breakdown. Because the home health treatments can be
similar in terms of care and intensity of care, we believe lymphedema
and wounds are appropriate to be grouped together for clinical
groupings.
Final Decision: After consideration of the public comments we
received, we are finalizing the reassignment of the ICD-10-CM diagnosis
codes listed in Table B19 from clinical group E (Musculoskeletal
Rehabilitation) and clinical group A (MMTA-Other) to clinical group C
(Wounds).
(5) Behavioral Health Comorbidity Subgroups
Our clinical advisors reviewed the ICD-10-CM diagnosis code F60.5
(obsessive-compulsive personality disorder) which is currently assigned
to the comorbidity subgroup behavioral 6 (Schizotypal, Persistent Mood,
and Adult Personality Disorders). However, they noted that behavioral 5
(Phobias, Other Anxiety and Obsessive-Compulsive Disorders) contains
other obsessive-compulsive disorders (for example, F42.8 and F42.9) and
clinically F60.5 should be reassigned to the comorbidity subgroup
behavioral 5. In addition, we evaluated resource consumption related to
the comorbidity subgroup behavioral 5, the comorbidity subgroup
behavioral 6, and F60.5 and found no significant variations negating a
reassignment, meaning the reassignment is still in alignment with the
actual costs of providing care. We did not receive comments on this
proposal, and therefore are finalizing the reassignment of diagnosis
code F60.5 to behavioral 5 when listed as a secondary diagnosis.
(6) Circulatory Comorbidity Subgroups
We reviewed Q82.0 (hereditary lymphedema) for clinical group
reassignment, as described in section II.B.3.4. of this rule. During
this review, we discovered Q82.0 is not currently assigned to a
comorbidity subgroup when listed as a secondary diagnosis. The
comorbidity subgroup circulatory 10 includes ICD-10-CM diagnosis codes
related to varicose veins and lymphedema. Therefore, our clinical
advisors determined that Q82.0 should be assigned to the comorbidity
subgroup circulatory 10 similar to other lymphedema diagnosis codes. In
addition, we evaluated resource consumption related to the comorbidity
subgroup circulatory 10 and Q82.0 and found no significant variations
negating a reassignment. Therefore, we proposed to assign diagnosis
code Q82.0 to circulatory 10 (varicose veins and lymphedema) when
listed as a secondary diagnosis.
Final Decision: We received a comment in support of this
assignment; therefore, we are finalizing the assignment of Q82.0
(hereditary lymphedema) from ``NA'' to circulatory 10 (varicose veins
and lymphedema) when listed as a secondary diagnosis.
(7) Neoplasm Comorbidity Subgroups
(i) Malignant Neoplasm of Upper Respiratory
In response to interested parties' questions regarding upper
respiratory malignant neoplasms, we reviewed 14 ICD-10-CM diagnosis
codes related to malignant neoplasms of the upper respiratory tract
currently assigned to the comorbidity subgroup neoplasm 6 (malignant
neoplasms of trachea, bronchus, lung, and mediastinum). These 14 codes
are listed in Table 10.
Table 10--ICD-10-CM Diagnosis Code Related to Malignant Neoplasms of
Upper Respiratory Tract
[GRAPHIC] [TIFF OMITTED] TR04NO22.010
Our clinical advisors reviewed the codes listed in Table 10 and
determined that C32.3, C32.8, and C32.9 are currently assigned to the
most clinically appropriate neoplasm comorbidity subgroup (neoplasm 6),
and therefore no further analysis was conducted for these three ICD-10
CM diagnosis codes. However, upon review of all the neoplasm
comorbidity subgroups, they determined that the remaining 11 codes
listed in Table 10 should be reassigned
[[Page 66814]]
to neoplasm 1 (malignant neoplasms of lip, oral cavity, and pharynx,
including head and neck cancers) in alignment with clinically similar
diagnosis codes already assigned (for example, C11.0 malignant neoplasm
of superior wall of nasopharynx). In addition, we evaluated resource
consumption related to the comorbidity subgroup, neoplasm 1, as well as
diagnosis codes, C30.0, C30.1, C31.0, C31.1, C31.2, C31.3, C31.8,
C31.9, C32.0, C32.1, or C32.2 and found no significant variations
negating a reassignment.
We did not receive comments on this proposal and therefore are
finalizing the reassignment of diagnosis codes C30.0, C30.1, C31.0,
C31.1, C31.2, C31.3, C31.8, C31.9, C32.0, C32.1, or C32.2 from neoplasm
6 to neoplasm 1 when listed as a secondary diagnosis.
(ii) Malignant Neoplasm of Unspecified Adrenal Gland
While reviewing unspecified codes for a change in clinical group,
we noticed that ICD-10-CM diagnosis codes C74.00 (malignant neoplasm of
cortex of unspecified adrenal gland) and C74.90 (malignant neoplasm of
unspecified part of unspecified adrenal gland) were coded as ``N/A''
instead of placed in a comorbidity subgroup. The comorbidity subgroup
neoplasm 15 currently includes ICD-10-CM diagnosis codes related to
malignant neoplasm of adrenal gland, endocrine glands and related
structures; specifically, C74.10 (malignant neoplasm of medulla of
unspecified adrenal gland). At this time, we believe that C74.00 and
C74.90 should be reassigned to neoplasm 15 based on clinical
similarities of other codes currently assigned. In addition, we
evaluated resource consumption related to the comorbidity subgroup
neoplasm 15, as well as diagnosis codes C74.00, and C74.90 and found no
significant variations negating a reassignment. We did not receive
comments on this proposal and therefore are finalizing the reassignment
of diagnosis codes C74.00 and C74.90 from ``NA'' to neoplasm 15
(malignant neoplasm of adrenal gland, endocrine glands and related
structures) when listed as secondary diagnoses.
(8) New Neurological Comorbidity Subgroup
In response to a comment received, we discussed in the CY 2022
final rule (86 FR 62263, 62264) our review of ICD-10-CM diagnosis codes
related to specified neuropathy or unspecified polyneuropathy. These
include specific ICD-10-CM G-codes. We stated that the codes were
assigned to the most clinically appropriate subgroup at the time.
However, upon further clinical review we believe a new neurological
comorbidity subgroup to include ICD-10-CM diagnosis codes related to
nondiabetic neuropathy is warranted. We identified 18 ICD-10-CM
diagnosis codes for potential reassignment to a proposed new
comorbidity subgroup, neurological 12. We refer readers to Table 1.C of
the CY 2023 Proposed Reassignment of ICD-10-CM Diagnosis Codes
supplemental file for a list of the G-codes related to specified
neuropathy or unspecified polyneuropathy. Of the 18 codes, 11 diagnosis
codes were not currently assigned a comorbidity group and seven
diagnosis codes were assigned to neurological 11 comorbidity subgroup.
Using claims data from the CY 2021 HH PPS analytical file, we
identified that the 18 diagnosis G-codes related to specified
neuropathy or unspecified polyneuropathy would have sufficient claims
(>400,000) for a new comorbidity subgroup. The removal of the seven
codes from the neurological 11 comorbidity subgroup, would still allow
for sufficient claims (>250,000) and include the remaining 146
diagnosis codes currently listed in the neurological 11 comorbidity
subgroup. We evaluated resource consumption related to the comorbidity
subgroup neurological 11, the 18 diagnosis G-codes, and the proposed
comorbidity subgroup neurological 12 and found no significant
variations negating a reassignment. A new neurological comorbidity
subgroup allows more clinically similar codes, nondiabetic neuropathy,
to be grouped together. Therefore, we proposed to reassign the 18
diagnosis codes listed in Table 1.C of the CY 2023 Proposed
Reassignment of ICD-10 CM Diagnosis Codes supplemental file, to the new
comorbidity subgroup neurological 12 (nondiabetic neuropathy) when
listed as secondary diagnoses. In conjunction with the proposed new
comorbidity subgroup, we proposed to change the description of the
current comorbidity subgroup, neurological 11, from ``Diabetic
Retinopathy and Macular Edema'' to ``Disease of the Macula and
Blindness/Low Vision''.
Comment: A few commenters supported the creation of the
neurological subgroup for nondiabetic neuropathy.
Response: We thank the commenters for their support.
Final Decision: After consideration of the public comments we
received, we are finalizing a new neurological comorbidity subgroup,
neurological 12 (nondiabetic neuropathy), and reassigning the 18
diagnosis codes listed in Table 1.C of the CY 2023 Proposed
Reassignment of ICD-10 CM Diagnosis Codes supplemental file to the
neurological 12 (nondiabetic neuropathy). We did not receive comments
on the proposal to change the description of the comorbidity subgroup,
neurological 11, and are therefore finalizing neurological 11, from
``Diabetic Retinopathy and Macular Edema'' to ``Disease of the Macula
and Blindness/Low Vision''.
(9) Respiratory Comorbidity Subgroups
(i) J18.2 Hypostatic Pneumonia, Unspecified Organism
Our clinical advisors reviewed the ICD-10-CM diagnosis code J18.2
(hypostatic pneumonia, unspecified organism) which is currently
assigned to the comorbidity subgroup respiratory 4 (bronchitis,
emphysema, and interstitial lung disease). However, respiratory 2
(whooping cough and pneumonia) contains other pneumonia with
unspecified organism (for example, J18.1 and J18.8). Clinically, J18.2
is similar to the other pneumonias in respiratory 2 and therefore,
should be reassigned from comorbidity subgroup respiratory 4 to
comorbidity subgroup respiratory 2. In addition, we evaluated resource
consumption related to the comorbidity subgroups respiratory 2 and
respiratory 4, and J18.2 and found no significant variations negating a
reassignment.
We did not receive comments on this proposal and therefore are
finalizing the reassignment of diagnosis code J18.2 (hypostatic
pneumonia, unspecified organism) to respiratory 2 when listed as a
secondary diagnosis.
(ii) J98.2 Interstitial Emphysema and J98.3 Compensatory Emphysema
Our clinical advisors reviewed the ICD-10-CM diagnosis codes J98.2
(interstitial emphysema) and J98.3 (compensatory emphysema), which are
currently assigned to the comorbidity subgroup respiratory 9
(respiratory failure and atelectasis). However, respiratory 4
(bronchitis, emphysema, and interstitial lung disease) contains other
emphysema codes (for example, J43.0 through J43.9) and therefore
clinically we believe it is appropriate to reassign J98.2 and J98.3 to
the comorbidity subgroup respiratory 9. In addition, we evaluated
resource consumption related to the comorbidity subgroups respiratory 4
and respiratory 9, as well as diagnosis codes J98.2, and J98.3 and
found no significant variations negating a reassignment. We did not
receive comments on this proposal and therefore are finalizing the
reassignment
[[Page 66815]]
of diagnosis codes J98.2 and J98.3 to respiratory 4 when listed as a
secondary diagnosis.
(iii) U09.9 Post COVID-19 Condition, Unspecified
Our clinical advisors reviewed the ICD-10-CM diagnosis code U09.9
(post COVID-19 condition, unspecified), which is currently assigned to
the comorbidity subgroup, respiratory 2 (whooping cough and pneumonia).
However, respiratory 10 (2019 novel Coronavirus) contains other COVID-
19 codes (for example, U07.1). Therefore, we believe clinically that
U09.9 should be reassigned to the comorbidity subgroup, respiratory 10.
In addition, we evaluated resource consumption related to the
comorbidity subgroups respiratory 2 and respiratory 10, and diagnosis
codes U09.9 and found no significant variations negating a
reassignment. We did not receive comments on this proposal and
therefore are finalizing the reassignment of diagnosis code U09.9 to
respiratory 10 when listed as a secondary diagnosis.
4. CY 2023 PDGM LUPA Thresholds and PDGM Case-Mix Weights
a. CY 2023 PDGM LUPA Thresholds
Under the HH PPS, LUPAs are paid when a certain visit threshold for
a payment group during a 30-day period of care is not met. In the CY
2019 HH PPS final rule with comment period (83 FR 56492), we finalized
setting the LUPA thresholds at the 10th percentile of visits or 2
visits, whichever is higher, for each payment group. This means the
LUPA threshold for each 30-day period of care varies depending on the
PDGM payment group to which it is assigned. If the LUPA threshold for
the payment group is met under the PDGM, the 30-day period of care will
be paid the full 30-day period case-mix adjusted payment amount
(subject to any PEP or outlier adjustments). If a 30-day period of care
does not meet the PDGM LUPA visit threshold, then payment will be made
using the CY 2023 per-visit payment amounts as described in section
II.B.5.c. of this final rule. For example, if the LUPA visit threshold
is four, and a 30-day period of care has four or more visits, it is
paid the full 30-day period payment amount; if the period of care has
three or less visits, payment is made using the per-visit payment
amounts.
In the CY 2019 HH PPS final rule with comment period (83 FR 56492),
we finalized our policy that the LUPA thresholds for each PDGM payment
group would be reevaluated every year based on the most current
utilization data available at the time of rulemaking. However, as CY
2020 was the first year of the new case-mix adjustment methodology, we
stated in the CY 2021 HH PPS final rule (85 FR 70305 through 70306)
that we would maintain the LUPA thresholds that were finalized and
shown in Table 17 of the CY 2020 HH PPS final rule with comment period
(84 FR 60522) for CY 2021 payment purposes. We stated that at that
time; we did not have sufficient CY 2020 data to reevaluate the LUPA
thresholds for CY 2021.
In the CY 2022 HH PPS final rule (86 FR 62249), we finalized the
proposal to recalibrate the PDGM case-mix weights, functional
impairment levels, and comorbidity subgroups while maintaining the LUPA
thresholds for CY 2022. We stated that because there are several
factors that contribute to how the case-mix weight is set for a
particular case-mix group (such as the number of visits, length of
visits, types of disciplines providing visits, and non-routine
supplies) and the case-mix weight is derived by comparing the average
resource use for the case-mix group relative to the average resource
use across all groups, we believe the COVID-19 PHE would have impacted
utilization within all case-mix groups similarly. Therefore, the impact
of any reduction in resource use caused by the COVID-19 PHE on the
calculation of the case-mix weight would be minimized since the impact
would be accounted for both in the numerator and denominator of the
formula used to calculate the case-mix weight. However, in contrast,
the LUPA thresholds are based on the number of overall visits in a
particular case-mix group (the threshold is the 10th percentile of
visits or 2 visits, whichever is greater) instead of a relative value
(like what is used to generate the case-mix weight) that would control
for the impacts of the PHE. We noted that visit patterns and some of
the decrease in overall visits in CY 2020 may not be representative of
visit patterns in CY 2022. Therefore, to mitigate any potential future
and significant short-term variability in the LUPA thresholds due to
the COVID-19 PHE, we finalized the proposal to maintain the LUPA
thresholds finalized and displayed in Table 17 in the CY 2020 HH PPS
final rule with comment period (84 FR 60522) for CY 2022 payment
purposes.
For CY 2023, we proposed to update the LUPA thresholds using CY
2021 Medicare home health claims (as of March 21, 2022) linked to OASIS
assessment data. After reviewing the CY 2021 home health claims
utilization data we determined that visit patterns have stabilized. Our
data analysis indicates that visits in 2021 were similar to visits in
2020. We believe that CY 2021 data will be more indicative of visit
patterns in CY 2023 rather than continuing to use the LUPA thresholds
derived from the CY 2018 data pre-PDGM. Therefore, we proposed to
update the LUPA thresholds for CY 2023 using data from CY 2021.
The final LUPA thresholds for the CY 2023 PDGM payment groups with
the corresponding Health Insurance Prospective Payment System (HIPPS)
codes and the case-mix weights are listed in Table B26. We solicited
public comments on the proposed updates to the LUPA thresholds for CY
2023. The public comments on our proposal to recalibrate the LUPA
thresholds for CY 2023 payment purposes and our responses are
summarized in this section of the rule.
Comment: A commenter expressed concern regarding the proposal to
recalibrate the LUPA thresholds using CY 2021 utilization data. This
commenter stated that while the observed changes in the recalibrated
thresholds may not seem large, they could serve as evidence that visits
during 2020 and 2021 may well be reduced (when compared to pre-PDGM
levels) due to pandemic influence.
Response: We acknowledge the commenter's statement and concerns
regarding the potential impact of the COVID-19 PHE on home health
utilization in CYs 2020 and 2021. However, we continue to believe that
it is important to base the LUPA thresholds on actual PDGM utilization
data and shift away from the use of data prior to the implementation of
the PDGM. Using the most recent data ensures that payment aligns with
the most recent cost of providing home health care services.
Comment: A commenter recommended that CMS reduce the LUPA threshold
in CY 2023 for all case-mix groups to two visits and reassess the
impact using CY 2023 data before making any further adjustments.
Response: We thank the commenter for this recommendation; however,
this recommendation is out of scope for the CY 2023 HH PPS proposed
rule. In the CY 2019 HH PPS final rule with comment period (83 FR
56492), we finalized setting the LUPA thresholds at the 10th percentile
of visits or 2 visits, whichever is higher, for each payment group. Any
changes to the LUPA threshold policy beyond the proposal to recalibrate
the thresholds using the CY 2021 utilization data would need to go
through notice and comment rulemaking.
[[Page 66816]]
Final Decision: We are finalizing the proposal to update the LUPA
thresholds for CY 2023. The LUPA thresholds for CY 2023 are located in
table 16 and will also be available on the HHA Center web page.
b. CY 2023 Functional Impairment Levels
Under the PDGM, the functional impairment level is determined by
responses to certain OASIS items associated with activities of daily
living and risk of hospitalization; that is, responses to OASIS items
M1800-M1860 and M1033. A home health period of care receives points
based on each of the responses associated with these functional OASIS
items, which are then converted into a table of points corresponding to
increased resource use. The sum of all of these points results in a
functional score which is used to group home health periods into a
functional level with similar resource use. That is, the higher the
points, the higher the response is associated with increased resource
use. The sum of all of these points results in a functional impairment
score which is used to group home health periods into one of three
functional impairment levels with similar resource use. The three
functional impairment levels of low, medium, and high were designed so
that approximately one-third of home health periods from each of the
clinical groups fall within each level. This means home health periods
in the low impairment level have responses for the functional OASIS
items that are associated with the lowest resource use, on average.
Home health periods in the high impairment level have responses for the
functional OASIS items that are associated with the highest resource
use on average.
For CY 2023, we proposed to use CY 2021 claims data to update the
functional points and functional impairment levels by clinical group.
The CY 2018 HH PPS proposed rule (82 FR 35320) and the technical report
from December 2016, posted on the Home Health PPS Archive web page
located at: https://www.cms.gov/medicare/home-health-pps/home-health-pps-archive, provide a more detailed explanation as to the construction
of these functional impairment levels using the OASIS items. We
proposed to use this same methodology previously finalized to update
the functional impairment levels for CY 2023. The updated OASIS
functional points table and the table of functional impairment levels
by clinical group for CY 2023 are listed in Tables 11 and 12,
respectively. We solicited public comments on the updates to functional
points and the functional impairment levels by clinical group.
BILLING CODE 4120-01-P
Table 11--Final Oasis Points Table for CY 2023
[[Page 66817]]
[GRAPHIC] [TIFF OMITTED] TR04NO22.011
[[Page 66818]]
[GRAPHIC] [TIFF OMITTED] TR04NO22.012
Table 12--Final Thresholds for Functional Levels by Clinical Group, for
CY 2023
[[Page 66819]]
[GRAPHIC] [TIFF OMITTED] TR04NO22.013
[GRAPHIC] [TIFF OMITTED] TR04NO22.014
[[Page 66820]]
BILLING CODE 4120-01-C
Comment: Some commenters were concerned that changes caused by
recalibration were reducing resources to home health agencies.
Commenters argued that since the CY 2022 rates were recalibrated, it
should not be done again prior to the availability of the CY 2022 data.
Commenters were particularly concerned that changes to the functional
impairment points and thresholds did not account for the higher acuity
patients they have treated in recent years.
Response: It is important to note that recalibration is calculated
so that changes to case-mix and related items (for example, functional
points) are budget neutral. The adjustments made to functional points,
functional threshold levels, comorbidities, LUPA thresholds, and case-
mix weights are made so that after the application of the case-mix
budget neutrality factor, recalibration does not have any impact on
aggregate payments when using data from CY 2021. Recalibration ensures
there is variation in payment between the 432 case-mix groups so that
those groups with lower resource use get paid less than those with
higher resource use. If we did not adjust the functional points,
functional threshold levels, comorbidities, LUPA thresholds, and case-
mix weights to reflect resource utilization, then payments would be
less accurate. Specifically, if we did not account for changes in
functional points, we could potentially pay the same for the low
functional impairment patients and the high functional impairments
patients (who have more resources associated with their visits). If
that occurred, and since payment would be adjusted in a budget neutral
way, this could mean we would be overpaying for low functional
impairment and underpaying for high functional impairment.
Functional points, functional threshold levels, comorbidities, LUPA
thresholds and case-mix weights can be impacted even if there are no
changes in coding patterns but there are changes in resource use. In
the CY 2019 HH PPS final rule with comment period (83 FR 56486), we
stated that after implementation of the PDGM in CY 2020, we would
continue to analyze the impact of all of the PDGM case mix variables to
determine if any additional refinements need to made. We continue to
believe that updating the functional impairment levels using current
data ensures that all variables used as part of the overall case-mix
adjustment appropriately align home health payment with the actual cost
of providing home health care services. Performing a yearly
recalibration allows us to be as accurate and up-to-date as possible
when measuring relationship between resource use and functional points,
functional threshold levels, comorbidities, LUPA thresholds and case-
mix weights. The most recent year of data that we have is CY 2021. We
feel that relationships seen in the CY 2021 data are going to be more
similar to the relationships that we will eventually in see in CY 2023
data versus if we continued to use the relationships we see in the CY
2020 data. Commenters should note that although functional points did
decrease for many items, the functional thresholds also decreased
(meaning fewer points are needed to qualify for the higher functional
impairment levels).
Comment: Some commenters were concerned that CMS grouped patients
into one of three functional impairment levels even if it meant
potentially reducing resources to patients who previously would have
been classified as medium or high functional impairment.
Response: We remind commenters that the recalibration is
implemented in a budget neutral manner. We set the functional levels so
roughly a third of periods within each clinical group are assigned to
low, medium, and high. This is done to ensure that the case-mix system
pays appropriately for differences in functional impairment level. If
all 30-day periods ended up in one functional impairment level then
we'd be paying the same for the low functional impairment patients and
the high functional impairment patients (who have more resources
associated with their visits). We believe that the functional
impairment level adjustment adequately captures the level of functional
impairment based on patient characteristics reported on the OASIS. The
PDGM not only uses the same five OASIS items used under the previous HH
PPS to determine the functional case-mix adjustment (M1810, M1820,
M1830, M1830, M1850, and M1860), but also adds two additional OASIS
items (M1800 and M1033) to determine the level of functional
impairment. The structure of categorizing functional impairment into
low, medium, and high levels has been part of the home health payment
structure since the implementation of the HH PPS. The previous HH PPS
grouped home health episodes using functional scores based on
functional OASIS items with similar average resource use within the
same functional level, with approximately a third of episodes
classified as low functional score, a third of episodes classified as
medium functional score, and a third of episodes classified as high
functional score. Likewise, the PDGM groups home health periods of care
using functional impairment scores based on functional OASIS items with
similar resource use and has three levels of functional impairment
severity: low, medium, and high. However, the PDGM differs from the
current HH PPS functional variable in that the three functional
impairment level thresholds in the PDGM vary between the clinical
groups. The PDGM functional impairment level structure accounts for the
patient characteristics within that clinical group associated with
increased resource costs affected by functional impairment. This is to
further ensure that payment is more accurately aligned with actual
patient characteristics and resource needs.
Comment: A commenter indicated that Table B21 in the CY 2023 HH PPS
proposed rule (87 FR 37627) showed that a lower functional impairment
response was associated with more points than a higher functional
impairment response (M1860 responses 2 and 3).
Response: For recalibration, we use the data as they are submitted.
Home health agencies should consider the appropriateness of their OASIS
responses in relation to the level of resources that should be required
for certain functional impairments. CMS would expect to find, on
average, that patients who are more functionally impaired would have
higher resource use. However, as noted by the commenter, this
correlation does not always occur when looking at individual OASIS
items and responses.
Final Decision: We are finalizing to update the functional points
and functional impairment levels for CY 2023 as proposed, using CY 2021
claims data. Table 11 includes the final functional points based on the
most available data.
c. CY 2023 Comorbidity Subgroups
Thirty-day periods of care receive a comorbidity adjustment
category based on the presence of certain secondary diagnoses reported
on home health claims. These diagnoses are based on a home-health
specific list of clinically and statistically significant secondary
diagnosis subgroups with similar resource use, meaning the diagnoses
have at least as high as the median resource use and are reported in
more than 0.1 percent of 30-day periods of care. Home health 30-day
periods of care can receive a comorbidity adjustment under the
following circumstances:
[[Page 66821]]
Low comorbidity adjustment: There is a reported secondary
diagnosis on the home health-specific comorbidity subgroup list that is
associated with higher resource use.
High comorbidity adjustment: There are two or more
secondary diagnoses on the home health-specific comorbidity subgroup
interaction list that are associated with higher resource use when both
are reported together compared to when they are reported separately.
That is, the two diagnoses may interact with one another, resulting in
higher resource use.
No comorbidity adjustment: A 30-day period of care
receives no comorbidity adjustment if no secondary diagnoses exist or
do not meet the criteria for a low or high comorbidity adjustment.
In the CY 2019 HH PPS final rule with comment period (83 FR 56406),
we stated that we would continue to examine the relationship of
reported comorbidities on resource utilization and make the appropriate
payment refinements to help ensure that payment is in alignment with
the actual costs of providing care. For CY 2023, we proposed to use the
same methodology used to establish the comorbidity subgroups to update
the comorbidity subgroups using CY 2021 home health data.
For CY 2023, we proposed to update the comorbidity subgroups to
include 23 low comorbidity adjustment subgroups and 94 high comorbidity
adjustment interaction subgroups. The final update to the comorbidity
adjustment subgroups includes 22 low comorbidity adjustment subgroups
as identified in table 13 and 91 high comorbidity adjustment
interaction subgroups as identified in table 14. The final 22 low
comorbidity adjustment subgroups and 91 high comorbidity adjustment
interactions reflect the final coding changes detailed in section
II.B.3.c. of this final rule. The final CY 2023 low comorbidity
adjustment subgroups and the high comorbidity adjustment interaction
subgroups including those diagnoses within each of these comorbidity
adjustments will also be posted on the HHA Center web page at https://www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center.
We invited comments on the proposed updates to the low comorbidity
adjustment subgroups and the high comorbidity adjustment interactions
for CY 2023.
BILLING CODE 4120-01-P
Table 13--Low Comorbidity Adjustment Subgroups for CY 2023
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Table 14--High Comorbidity Adjustment Interactions for CY 2023
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BILLING CODE 4120-01-C
Comment: A commenter expressed support for the proposed updates to
the low and high comorbidity subgroups. This commenter stated that the
changes achieve the stated goal of ensuring that payment is in
alignment with the actual costs of providing care and that the high
comorbidity adjustment interaction subgroups acknowledge the impact of
multiple diagnoses on care delivery complexity and cost.
Response: We thank the commenter for their support.
Final Decision: We are finalizing the proposal to use the same
methodology used to establish the comorbidity subgroups to update the
comorbidity subgroups using CY 2021 home health data. For CY 2023, the
final update to the comorbidity adjustment subgroups includes 22 low
comorbidity adjustment subgroups as identified in Table 13 and 91 high
comorbidity adjustment interaction subgroups as identified in Table 14.
The final 22 low comorbidity adjustment subgroups and 91 high
comorbidity adjustment interactions reflect the final coding changes
detailed in section II.B.3.c. of this final rule.
d. CY 2023 PDGM Case-Mix Weights
As finalized in the CY 2019 HH PPS final rule with comment period
(83 FR 56502), the PDGM places patients into meaningful payment
categories based on patient and other characteristics, such as timing,
admission source, clinical grouping using the reported principal
diagnosis, functional impairment level, and comorbid conditions. The
PDGM case-mix methodology results in 432 unique case-mix groups called
HHRGs. We also finalized a policy in the CY 2019 HH PPS final rule with
comment period (83 FR 56515) to recalibrate annually the PDGM case-mix
weights using a fixed effects model, as outlined in that rule, with the
most recent and complete utilization data available at the time of
annual rulemaking. Annual recalibration of the PDGM case-mix weights
ensures that the case-mix weights reflect, as accurately as possible,
current home health resource use and changes in utilization patterns.
To generate the proposed recalibrated CY 2023 case-mix weights, we used
CY 2021 home health claims data with linked OASIS data (as of March 21,
2021). These data are the most current and complete data available at
this time. We believe that recalibrating the case-mix weights using
data from CY 2021 would be reflective of PDGM utilization and patient
resource use for CY 2023. The proposed recalibrated case-mix weights
were updated based on more complete CY 2021 claims data for this final
rule.
The claims data provide visit-level data and data on whether non-
routine supplies (NRS) were provided during the period and the total
charges of NRS. We determine the case-mix weight for each of the 432
different PDGM payment groups by regressing resource use on a series of
indicator variables for each of the categories using a fixed effects
model as described in the following steps:
Step 1: Estimate a regression model to assign a functional
impairment level to each 30-day period. The regression model estimates
the relationship between a 30-day period's resource use and the
functional status and risk of hospitalization items included in the
PDGM, which are obtained from certain OASIS items. We refer readers to
Table B21 for further information on the OASIS items used for the
functional impairment level under the PDGM. We measure resource use
with the cost-per-minute + NRS approach that uses
[[Page 66829]]
information from 2020 home health cost reports. We use 2020 home health
cost report data because it is the most complete cost report data
available at the time of rulemaking. Other variables in the regression
model include the 30-day period's admission source, clinical group, and
30-day period timing. We also include home health agency level fixed
effects in the regression model. After estimating the regression model
using 30-day periods, we divide the coefficients that correspond to the
functional status and risk of hospitalization items by 10 and round to
the nearest whole number. Those rounded numbers are used to compute a
functional score for each 30-day period by summing together the rounded
numbers for the functional status and risk of hospitalization items
that are applicable to each 30-day period. Next, each 30-day period is
assigned to a functional impairment level (low, medium, or high)
depending on the 30-day period's total functional score. Each clinical
group has a separate set of functional thresholds used to assign 30-day
periods into a low, medium or high functional impairment level. We set
those thresholds so that we assign roughly a third of 30-day periods
within each clinical group to each functional impairment level (low,
medium, or high).
Step 2: A second regression model estimates the relationship
between a 30-day period's resource use and indicator variables for the
presence of any of the comorbidities and comorbidity interactions that
were originally examined for inclusion in the PDGM. Like the first
regression model, this model also includes home health agency level
fixed effects and includes control variables for each 30-day period's
admission source, clinical group, timing, and functional impairment
level. After we estimate the model, we assign comorbidities to the low
comorbidity adjustment if any comorbidities have a coefficient that is
statistically significant (p-value of 0.05 or less) and which have a
coefficient that is larger than the 50th percentile of positive and
statistically significant comorbidity coefficients. If two
comorbidities in the model and their interaction term have coefficients
that sum together to exceed $150 and the interaction term is
statistically significant (p-value of 0.05 or less), we assign the two
comorbidities together to the high comorbidity adjustment.
Step 3: After Step 2, each 30-day period is assigned to a clinical
group, admission source category, episode timing category, functional
impairment level, and comorbidity adjustment category. For each
combination of those variables (which represent the 432 different
payment groups that comprise the PDGM), we then calculate the 10th
percentile of visits across all 30-day periods within a particular
payment group. If a 30-day period's number of visits is less than the
10th percentile for their payment group, the 30-day period is
classified as a Low Utilization Payment Adjustment (LUPA). If a payment
group has a 10th percentile of visits that is less than two, we set the
LUPA threshold for that payment group to be equal to two. That means if
a 30- day period has one visit, it is classified as a LUPA and if it
has two or more visits, it is not classified as a LUPA.
Step 4: Take all non-LUPA 30-day periods and regress resource use
on the 30-day period's clinical group, admission source category,
episode timing category, functional impairment level, and comorbidity
adjustment category. The regression includes fixed effects at the level
of the home health agency. After we estimate the model, the model
coefficients are used to predict each 30-day period's resource use. To
create the case-mix weight for each 30- day period, the predicted
resource use is divided by the overall resource use of the 30-day
periods used to estimate the regression.
The case-mix weight is then used to adjust the base payment rate to
determine each 30-day period's payment. Table 15 shows the coefficients
of the payment regression used to generate the weights, and the
coefficients divided by average resource use.
BILLING CODE 4120-01-P
Table 15--Coefficient of Payment Regression and Coefficient Divided by
Average Resource Use
[[Page 66830]]
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[[Page 66831]]
[GRAPHIC] [TIFF OMITTED] TR04NO22.024
The case-mix weights proposed for CY 2023 are listed in Table 16
and will also be posted on the HHA Center web page \25\ upon display of
this final rule.
---------------------------------------------------------------------------
\25\ HHA Center web page: https://www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center.
---------------------------------------------------------------------------
Table 16--Final Case-Mix Weights and LUPA Thresholds for Each HHRG
Payment Group
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BILLING CODE 4120-01-C
Changes to the PDGM case-mix weights are implemented in a budget
neutral manner by multiplying the CY 2023 national standardized 30-day
period payment rate by a case-mix budget neutrality factor. Typically,
the case-mix weight budget neutrality factor is also calculated using
the most recent, complete home health claims data available. However,
in the CY 2022 HH PPS proposed rule (86 FR 35908), due to the COVID-19
PHE, we discussed using the previous calendar year's home health claims
data (CY 2019) to determine if there were significant differences
between utilizing CY 2019 and CY 2020 claims data. We noted that CY
2020 was the first year of actual PDGM utilization data, therefore, if
we were to use CY 2019 data due to the COVID-19 PHE we would need to
simulate 30-day periods from 60-day episodes under the old system. We
determined that using CY 2020 utilization data was more appropriate
than using CY 2019 utilization data, as it is actual PDGM utilization
data. For CY 2023, we will continue the practice of using the most
recent complete home health claims data at the time of rulemaking,
which is CY 2021 data. The case-mix budget neutrality factor is
calculated as the ratio of 30-day base payment rates such that total
payments when the CY 2023 PDGM case-mix
[[Page 66846]]
weights (developed using CY 2021 home health claims data) are applied
to CY 2021 utilization (claims) data are equal to total payments when
CY 2022 PDGM case-mix weights (developed using CY 2020 home health
claims data) are applied to CY 2021 utilization data. This produces a
case-mix budget neutrality factor for CY 2023 of 0.9904.
We invited comments on the CY 2023 proposed case-mix weights and
proposed case-mix weight budget neutrality factor and these are
summarized below.
Comment: A few commenters expressed support for the proposal to
recalibrate the PDGM case-mix weights for CY 2023 using CY 2021
utilization data.
Response: We thank the commenters for their support.
Comment: Several commenters were opposed to the proposal to
recalibrate the PDGM case-mix weights for CY 2023. A commenter
expressed concerns about the influence of the COVID-19 surges and its
overall effects on the types of patients being served. This commenter
recommended not updating the case-mix weights at this time and resuming
this practice once the pandemic is over.
Response: CMS appreciates the comments received regarding CY 2021
utilization trends and the impact of the COVID-19 PHE on the provision
of home health services. We recognize that commenters have concerns
regarding how the COVID-19 PHE affected the type of home health
patients served as well as care practices. However, as stated in the CY
2023 HH PPS proposed rule (87 FR 37626), we believe that visit patterns
have stabilized as our data analysis indicates that visits in 2021 were
similar to visits in 2020. As such, we believe that CY 2021 data will
be indicative of visit patterns in CY 2023. In the CY 2019 HH PPS final
rule, we finalized our proposal to annually recalibrate the PDGM case-
mix weights (83 FR 56515) to reflect the most recent utilization data
available at the time of rulemaking. We continue to believe that the
annual recalibration of the HH PPS case-mix weights ensures that the
case-mix weights reflect, as accurately as possible, current home
health resource use, changes in utilization patterns, and reflects the
types of patients currently receiving home health services. We believe
that prolonging recalibration could lead to more significant variation
in the case-mix weights than what is observed using CY 2021 utilization
data. Therefore, we believe that utilizing CY 2021 data to recalibrate
the CY 2023 case-mix weights is appropriate.
Comment: A commenter recommended that any recalibration should be
done in a non-budget-neutral manner given the higher-acuity patients,
increasing expenses, increased demand for care, and increased shortage
of labor.
Response: We thank the commenter for this recommendation; however,
consistent with our established policy, we apply a case-mix budget
neutrality factor to the CY 2023 national, standardized 30-day period
payment rate to ensure that there are no changes in aggregate payments
due to the recalibration.
Final Decision: We are finalizing the recalibration of the HH PPS
case-mix weights as proposed for CY 2023. We are also finalizing the
proposal to implement the changes to the PDGM case-mix weights in a
budget neutral manner by applying a case-mix budget neutrality factor
to the CY 2023 national, standardized 30-day period payment rate. As
stated previously, the final case-mix budget neutrality factor for CY
2023 will be 0.9904.
5. CY 2023 Home Health Payment Rate Updates
a. CY 2023 Home Health Market Basket Update for HHAs
Section 1895(b)(3)(B) of the Act requires that the standard
prospective payment amounts for home health be increased by a factor
equal to the applicable home health market basket update for those HHAs
that submit quality data as required by the Secretary. In the CY 2019
HH PPS final rule with comment period (83 FR 56425), we finalized a
rebasing of the home health market basket to reflect 2016 cost report
data. A detailed description of how we rebased the home health market
basket is available in the CY 2019 HH PPS final rule with comment
period (83 FR 56425 through 56436).
Section 1895(b)(3)(B) of the Act requires that in CY 2015 and in
subsequent calendar years, except CY 2018 (under section 411(c) of the
Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L.
114-10, enacted April 16, 2015)), and CY 2020 (under section 53110 of
the Bipartisan Budget Act of 2018 (BBA) (Pub. L. 115-123, enacted
February 9, 2018)), the market basket percentage under the HHA
prospective payment system, as described in section 1895(b)(3)(B) of
the Act, be annually adjusted by changes in economy-wide productivity.
Section 1886(b)(3)(B)(xi)(II) of the Act defines the productivity
adjustment to be equal to the 10-year moving average of changes in
annual economy-wide private nonfarm business multifactor productivity
(MFP) (as projected by the Secretary for the 10-year period ending with
the applicable fiscal year, calendar year, cost reporting period, or
other annual period). The United States Department of Labor's Bureau of
Labor Statistics (BLS) publishes the official measures of productivity
for the United States economy. We note that previously the productivity
measure referenced in section 1886(b)(3)(B)(xi)(II) was published by
BLS as private nonfarm business multifactor productivity. Beginning
with the November 18, 2021 release of productivity data, BLS replaced
the term ``multifactor productivity'' with ``total factor
productivity'' (TFP). BLS noted that this is a change in terminology
only and will not affect the data or methodology. As a result of the
BLS name change, the productivity measure referenced in section
1886(b)(3)(B)(xi)(II) of the Act is now published by BLS as ``private
nonfarm business total factor productivity''. We refer readers to
https://www.bls.gov for the BLS historical published TFP data. A
complete description of IGI's TFP projection methodology is available
on the CMS website at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch.
The proposed home health update percentage for CY 2023 was based on
the estimated home health market basket update, specified at section
1895(b)(3)(B)(iii) of the Act, of 3.3 percent (based on IHS Global
Inc.'s first-quarter 2022 forecast with historical data through fourth-
quarter 2021). The estimated proposed CY 2023 home health market basket
update of 3.3 percent was then reduced by a productivity adjustment, as
mandated by the section 3401 of the Affordable Care Act, which at the
time of the proposed rule was estimated to be 0.4 percentage point for
CY 2023. In effect, the proposed home health payment update percentage
for CY 2023 was a 2.9 percent increase. Section 1895(b)(3)(B)(v) of the
Act requires that the home health update be decreased by 2 percentage
points for those HHAs that do not submit quality data as required by
the Secretary. For HHAs that do not submit the required quality data
for CY 2023, the home health payment update was proposed to be 0.9
percent (2.9 percent minus 2 percentage points). In the CY 2023 HH PPS
proposed rule we stated that if more recent data became available after
the publication of the
[[Page 66847]]
proposed rule and before the publication of the final rule (for
example, more recent estimates of the home health market basket update
and productivity adjustment), we would use such data, if appropriate,
to determine the home health payment update percentage for CY 2023 in
the final rule.
The following is a summary of the public comments received on the
CY 2023 annual payment update and our responses.
Comment: A few commenters supported the positive market basket
payment update of 2.9 percent. Several commenters opposed the proposed
update of 3.3 percent reduced by 0.4 percent productivity adjustment
stating it falls short of real-life cost inflation and is insufficient
to cover their costs. Commenters noted that home health agencies are
struggling with recruitment and retention of staffing and increased
costs of staffing due to tight labor markets and paying for sick leave
for COVID-19, as well as with increased costs of supplies and equipment
(as a result of supply chain shortages), and overall higher inflation.
Commenters also noted that home health agencies are struggling to
compete for staffing with hospitals that received large amounts of
relief funding for COVID-19 and offer large sign-on bonuses. A few
commenters noted that there are changes impacting the home health PPS
that will require additional resources such as OASIS and EVV monitoring
and suggested that payment increases are not keeping pace with
inflation.
Several commenters stated cost inflation is at a 40-year high and
HHAs report continuing labor cost increases in second quarter 2022 and
third quarter 2022 that range from 7 to 12 percent. A commenter noted
that a recent survey conducted by Dobson & Davanzo found higher labor
cost growth than is reflected in the proposed market basket index,
along with a significantly greater nurse labor cost increase as
determined by the U.S. Department of Labor, Bureau of Labor Statistics
(BLS) average hourly earnings for home health industry, which showed
year-over-year growth in the first quarter of 2022 of 5.2 percent.
With labor representing 75 percent of home health costs, commenters
stated the proposed market basket index is less than half of actual
labor cost increases. In addition, they noted HHAs, unlike many other
health care sectors, are hard hit with transportation cost increases--
either directly due to vehicle acquisition and gasoline costs or by
higher reimbursement rates. With an estimated 7.8 billion miles driven
each year, they noted that HHAs face transportation cost increases
alone that may exceed the proposed market basket index increase. They
stated CMS has the authority to modify its market basket index
calculation methodology, stating section 1895(b)(3)(B)(iii) of the Act
offers significant discretion to the Secretary to account for cost
increases specifically related to ``the mix of goods and services
included in home health service.'' They noted that labor and
transportation costs are within the scope of home health services.
The commenters stated that the recent market basket index increases
for hospitals, SNFs, and hospices is a positive indication that CMS
will raise the market basket index in the final rule. However, they
stated the increases seen in the other sectors remain short of what
HHAs report as actual cost increases in 2022. Several commenters
requested that CMS use the most recent BLS data, and where sector
specific data is not recent, use CPI data to determine the market
basket increase. Commenters urged CMS to provide a home health market
basket update comparable to what was finalized in the fiscal year
payment rules, which used IHS Global Inc.'s second quarter forecast. A
commenter requested that CMS exercise any additional authorities to
ensure market basket updates are based on data that is consistent with
what is occurring in the overall economy.
A few commenters noted that they believe home health agencies
should be getting a 6 percent increase for inflation. A commenter
requested that CMS propose an inflation adjustment to enable best
practices and allow agencies to continue to provide a high level of
care. Commenters stated that the low reimbursement rates would be
detrimental to patient care and may cause HHA closures.
Response: We believe the 2016-based home health market basket
increase adequately reflects the average change in the price of goods
and services hospitals purchase in order to provide HHA medical
services, and is appropriate to use as the HHA payment update factor.
As described in the CY 2019 HH PPS final rule with comment period (83
FR 56425 through 56436), the home health market basket (similar to the
other CMS market baskets) is a fixed-weight, Laspeyres-type index that
measures price changes over time and would not reflect increases in
costs associated with changes in the volume or intensity of input goods
and services. As such, the home health market basket update would
reflect the prospective price pressures for the types of inputs
described by the commenters (such as labor or wage growth and
transportation costs), but would inherently not reflect other factors
that might increase the level of costs, such as the quantity of labor
used or any changes in occupation (such as the decreased use of home
health aides). We note that cost changes (that is, the product of price
and quantities) would only be reflected when a market basket is rebased
and the base year weights are updated to a more recent time period.
At the time of the CY 2023 HH PPS proposed rule, based on IHS
Global Inc.'s first quarter 2022 forecast with historical data through
the fourth quarter of 2021, IGI forecasted the 2016-based home health
market basket update of 3.3 percent for CY 2023 reflecting forecasted
compensation price growth of 3.8 percent (by comparison, compensation
price growth in the home health market basket averaged 2.3 percent from
2012-2021). In the CY 2023 HH PPS proposed rule, we proposed that if
more recent data became available, we would use such data, if
appropriate, to derive the final CY 2023 home health market basket
update for the final rule. For this final rule, we now have an updated
forecast of the price proxies underlying the market basket that
incorporates more recent historical data and reflects a revised outlook
regarding the United States economy and expected price inflation for CY
2023 for HHAs (including upward revision to the price growth as
compared to the proposed rule for compensation and transportation).
Based on IHS Global Inc.'s third quarter 2022 forecast with historical
data through the second quarter of 2022 (and reflecting forecasted data
for the third quarter of 2022 through fourth quarter of 2023), the
final CY 2023 home health market basket update is 4.1 percent
(reflecting forecasted compensation price growth of 4.4 percent) and
the final CY 2023 productivity adjustment is 0.1 percentage point.
Therefore, for CY 2023, the final home health productivity-adjusted
market basket update of 4.0 percent (4.1 percent less 0.1 percentage
point) will be applicable, compared to the 2.9 percent productivity-
adjusted market basket update that was proposed. We note that the final
CY 2023 home health market basket growth rate of 4.1 percent would be
the highest market basket increase we have implemented in a final rule
since the beginning of the HH PPS.
We acknowledge the commenters' concern regarding the tight labor
market and competing with hospitals and skilled nursing facilities for
labor. For the compensation cost weight in the 2016-based home health
market basket (which includes salaried and contract
[[Page 66848]]
labor employees), we use a blend of Employment Cost Indexes (ECI) for
wages and salaries and benefits to proxy the price increases of labor
for HHAs. The blend of ECIs reflects the occupational composition of
HHA staff as measured by the National Industry-Specific Occupational
Employment and Wage estimates for North American Industrial
Classification System (NAICS) 621600, Home Health Care Services,
published by the BLS Office of Occupational Employment Statistics
(OES). A more detailed discussion can be found in the CY 2019 HH PPS
final rule with comment period (83 FR 56429). For the Health-Related
Professional and Technical workers compensation costs (accounting for
26 percent of the 2016-based home health market basket and including,
but not limited to, registered nurses and therapists) we use the ECIs
for All Civilian workers in Hospitals as the price proxies. For the
Health and Social Assistance Services workers compensation costs
(accounting for 27 percent of the 2016-based home health market basket
and including, but not limited to, home health aides and licensed
practical nurses) we use the ECIs for All Civilian workers in Health
Care and Social Assistance. Each of these price proxies reflects the
forecasted price factors affecting the labor occupations across the
health sector, including those for hospital workers and others that are
in high demand.
While we appreciate the commenter's recommendation for CMS to
exercise any additional authorities to ensure market basket updates are
based on data that is consistent with what is occurring in the overall
economy, we note that section 1895(b)(3)(B) of the Act requires that
the standard prospective payment amounts for home health be increased
by a factor equal to the applicable home health market basket update
for those HHAs that submit quality data as required by the Secretary.
Additionally, section 1895(b)(3)(B) of the Act requires that in CY 2015
and in subsequent calendar years, the market basket percentage under
the HHA prospective payment system, as described in section
1895(b)(3)(B) of the Act, be annually adjusted by changes in economy-
wide productivity. Therefore, we do not have additional authority to
apply an update to the home health payments beyond what is set out in
statute.
Comment: Several commenters expressed concerns over the final CY
2022 home health market basket update and the latest CY 2022 market
basket forecast. Commenters noted that with more recent data, the
market basket for CY 2022 is trending toward 5.0 percent, well above
the 3.1 percent HH PPS update implemented in the CY 2022 HH PPS final
rule. Several commenters requested CMS adjust 2022 base rates to
conform to actual cost inflation in 2022 that exceeds the 2022 market
basket index as was done for SNFs.
Response: The commenter seems to be referring to the market basket
forecast error adjustment that was implemented in the FY 2023 SNF PPS
final rule. However, that forecast error adjustment was to adjust for
the difference between actual SNF market basket increase for FY 2021
and the final SNF market basket increase for FY 2021. However, as the
commenter is referring to 2022 inflation and not 2021 inflation, it is
not clear what the commenter is suggesting. The HH PPS market basket
updates are required by law to be set prospectively, which means that
the update relies on a mix of both historical data for part of the
period for which the update is calculated and forecasted data for the
remainder. There is currently no mechanism to adjust for market basket
forecast error in the HH PPS payment update.
Comment: A commenter stated the market basket update of 3.3 percent
was inadequate due to use of the ECI to update labor costs. They stated
the ECI does not include the costs of contracted health care providers
which was a key driver of surging input costs. The commenter stated
that by excluding costs related to contracted labor, CMS has
dramatically underestimated the true cost of providing care and urged
CMS to conduct a one-time forecast error correction to the market
basket to adequately capture the true costs of providing care. A
commenter stated that they have to rely on more contract labor, which
has resulted in increased costs per visit as their contractors charged
more per visit.
Response: For the compensation cost weight in the 2016-based home
health market basket (which includes salaried and contract labor
employees), we use a blend of ECIs for wages and salaries and benefits
to proxy the price increases of labor for HHAs (for more details see
the CY 2019 HH PPS final rule (83 FR 56429). The ECIs (published by the
BLS) measure the change in the hourly labor cost to employers,
independent of the influence of employment shifts among occupations and
industry categories. We note that the Medicare cost report data shows
contract labor costs account for about 7 percent of total compensation
for HHAs in 2020, compared to about 10 percent in the 2016-based home
health market basket. Data through 2021 are incomplete at this time.
Therefore, while we acknowledge that the ECI only reflects price
changes for employed staff, we believe that the blended ECIs used in
the home health market basket are accurately reflecting the price
change associated with the labor used to provide home health services
(as employed workers' costs account for 93 percent of HHA compensation
costs) and appropriately does not reflect other factors that might
affect labor costs. Therefore, we believe it continues to be an
appropriate measure to use in the home health market basket. We also
note that based on IGI's third quarter 2022 forecast with historical
data through second quarter 2022, compensation price growth (using the
ECIs) for CY 2023 is now projected to be 4.4 percent, which is 0.6
percentage point higher than projected price growth at the time of the
CY 2023 HH PPS proposed rule (3.8 percent) and 2.1 percentage points
higher than the historical average from 2012 through 2021.
Comment: Several commenters were concerned about the proposed
reduction for productivity. A commenter requested that CMS also
elaborate in the final rule on the specific productivity gains that are
the basis for the proposed 0.4 percent productivity offset as the
latest data actually indicate decreases in productivity, not gains.
Another commenter stated that they believe the assumptions underpinning
the productivity adjustment are fundamentally flawed as it assumes that
HHAs can increase overall productivity--producing more goods with the
same or fewer units of labor input--at the same rate as increases in
the broader economy. However, the commenters stated that providing
home-based care to patients is highly labor intensive and therefore,
they strongly disagreed with the continuation of this punitive policy--
particularly during the PHE. They stated that given that CMS is
required by statute to implement a productivity adjustment to the
market basket update, they ask the agency to work with Congress to
permanently eliminate this unjustified reduction in home health
payments.
Response: Section 1895(b)(3)(B) of the Act requires the market
basket percentage under the HH PPS, as described in section
1895(b)(3)(B) of the Act, be annually adjusted by changes in economy-
wide productivity. Section 1886(b)(3)(B)(xi)(II) of the Act defines the
productivity adjustment to be equal to the 10-year moving average of
changes in annual economy-wide private nonfarm business multifactor
productivity (as projected by the Secretary for the 10-year period
ending
[[Page 66849]]
with the applicable fiscal year, year, cost reporting period, or other
annual period). Therefore, we do not have the authority to eliminate
the productivity adjustment. For the CY 2023 HH PPS proposed rule,
based on IGI's first quarter 2022 forecast, the productivity adjustment
was projected to be 0.4 percentage point for CY 2023. For this final
rule, based on IGI's third quarter 2022 forecast, we are incorporating
a revised productivity adjustment that reflects more recent historical
total factor productivity data as published by BLS through 2021
(previously published by BLS as multifactor productivity) as well as a
revised economic outlook for CY 2022 and CY 2023 (including the
negative labor productivity quarterly growth rates in the first half of
2022). Using this more recent forecast, the CY 2023 productivity
adjustment based on the 10-year moving average growth in economy-wide
total factor productivity for the period ending CY 2023 is currently
estimated to be 0.1 percent.
Comment: A commenter stated that while some of the increased costs
due to the pandemic, structural changes in staffing costs and general
inflation, may be captured in the proposed market basket update, it
does not track with the realized increase of costs of providing quality
healthcare. This commenter also noted that the most recent annual
inflation rate for the United States is 9.1 percent. The commenter
stated that the proposed home health market basket update for CY 2023
is not keeping pace with the national rate of inflation and is woefully
inadequate. They urged CMS to discuss the impact of this disparity in
the final rule.
Response: As required in section 1895(b)(4)(B)(iii) of the Act, the
home health market basket reflects the average change in the price of
goods and services HHAs purchase in order to provide medical services.
While the Consumer Price Index (CPI) All Items Urban (BLS' measure of
overall inflation for the U.S. referenced by the commenter) is also a
fixed-weight, Laspeyres-type index that measures price changes over
time, it reflects a market basket of consumer goods and services
purchased by urban consumers. Thus, it is a measure of price change
that does not reflect the mix of goods and services included in a home
health service but instead reflects a mix of goods and services
specific to consumers such as Shelter (33 percent), Food (13 percent),
New and used vehicles (9 percent), and energy (7 percent), where the
weights are based on relative importance for December 2021. Thus, there
is not a direct one-to-one relationship between these two price indices
and any disparity would appropriately reflect their different purposes.
Comment: A commenter stated the proposed market basket update does
not reflect the increased cost of giving care, but also breaks from
longstanding economic policy from the Department of Health and Human
Services, citing that the last time that inflation was at this level,
from 1979-1982, the then-Health Care Financing Administration,
forerunners of CMS, provided a price index update of 11.5 percent in
1980, 11.5 percent in 1981, and 10 percent in 1983. The commenter
suggested that CMS provide a home health full market basket adjustment
that recognizes the dramatic increases in the cost of care.
Response: As stated previously, the home health market basket
measures price changes (similar to other CMS market baskets) over time
and would not reflect increases in costs associated with changes in the
volume or intensity of input goods and services. The price index
updates cited by the commenter were implemented when CMS (formerly
Health Care Financing Administration) reimbursed HHAs on a cost basis
prior to the HH PPS. Beginning in 2001, CMS implemented the HH PPS with
annual updates being equal to the home health market basket percentage
increase as stated in section 1895(b)(4)(B)(iii) of the Act, and
effective beginning with 2015, reduced by the productivity adjustment
described in section 1886(b)(3)(B)(xi)(II) of the Act. As noted
previously, the final CY 2023 home health market basket growth rate of
4.1 percent would be the highest market basket increase we have
implemented in a final rule since the beginning of the HH PPS.
Final Decision: As proposed, we are finalizing our policy to use
the most recent data to determine the home health payment update
percentage for CY 2023 in this final rule. Based on IHS Global Inc.'s
third-quarter 2022 forecast with historical data through second-quarter
2022, the home health market basket update is 4.1 percent. The CY 2023
home health market basket update of 4.1 percent is then reduced by a
productivity adjustment of 0.1 percentage point for CY 2023. For HHAs
that submit the required quality data for CY 2022, the home health
payment update is a 4.0 percent increase. For HHAs that do not submit
the required quality data for CY 2023, the home health payment update
is 2.0 percent (4.0 percent minus 2 percentage points).
b. CY 2023 Home Health Wage Index
(1) CY 2023 Home Health Wage Index
Sections 1895(b)(4)(A)(ii) and (b)(4)(C) of the Act require the
Secretary to provide appropriate adjustments to the proportion of the
payment amount under the HH PPS that account for area wage differences,
using adjustment factors that reflect the relative level of wages and
wage-related costs applicable to the furnishing of home health
services. Since the inception of the HH PPS, we have used inpatient
hospital wage data in developing a wage index to be applied to home
payments. We proposed to continue this practice for CY 2023, as we
continue to believe that, in the absence of home health-specific wage
data that accounts for area differences, using inpatient hospital wage
data is appropriate and reasonable for the HH PPS.
In the CY 2021 HH PPS final rule (85 FR 70298), we finalized our
proposal to adopt the revised Office of Management and Budget (OMB)
delineations with a 5-percent cap on wage index decreases, where the
estimated reduction in a geographic area's wage index would be capped
at 5-percent in CY 2021 only, meaning no cap would be applied to wage
index decreases for the second year (CY 2022). Therefore, we proposed
and finalized the use of the FY 2022 pre-floor, pre-reclassified
hospital wage index with no 5-percent cap on decreases as the CY 2022
wage adjustment to the labor portion of the HH PPS rates (86 FR 62285).
For CY 2023, we proposed to base the HH PPS wage index on the FY 2023
hospital pre-floor, pre-reclassified wage index for hospital cost
reporting periods beginning on or after October 1, 2018, and before
October 1, 2019 (FY 2019 cost report data). The proposed CY 2023 HH PPS
wage index would not take into account any geographic reclassification
of hospitals, including those in accordance with section 1886(d)(8)(B)
or 1886(d)(10) of the Act. We also proposed that the CY 2023 HH PPS
wage index would include a 5-percent cap on wage index decreases as
discussed later in this section. If finalized, we will apply the
appropriate wage index value to the labor portion of the HH PPS rates
based on the site of service for the beneficiary (defined by section
1861(m) of the Act as the beneficiary's place of residence).
To address those geographic areas in which there are no inpatient
hospitals, and thus, no hospital wage data on which to base the
calculation of the CY 2023 HH PPS wage index, we proposed to continue
to use the same methodology discussed in the CY 2007
[[Page 66850]]
HH PPS final rule (71 FR 65884) to address those geographic areas in
which there are no inpatient hospitals. For rural areas that do not
have inpatient hospitals, we proposed to use the average wage index
from all contiguous Core Based Statistical Areas (CBSAs) as a
reasonable proxy. Currently, the only rural area without a hospital
from which hospital wage data could be derived is Puerto Rico. However,
for rural Puerto Rico, we do not apply this methodology due to the
distinct economic circumstances that exist there (for example, due to
the close proximity of the majority of Puerto Rico's various urban and
non-urban areas, this methodology would produce a wage index for rural
Puerto Rico that is higher than that in half of its urban areas).
Instead, we proposed to continue to use the most recent wage index
previously available for that area. The most recent wage index
previously available for rural Puerto Rico is 0.4047, which is what we
proposed to use. For urban areas without inpatient hospitals, we use
the average wage index of all urban areas within the State as a
reasonable proxy for the wage index for that CBSA. For CY 2023, the
only urban area without inpatient hospital wage data is Hinesville, GA
(CBSA 25980). Using the average wage index of all urban areas in
Georgia as proxy, we proposed the CY 2023 wage index value for
Hinesville, GA to be 0.8542.
On February 28, 2013, OMB issued Bulletin No. 13-01, announcing
revisions to the delineations of MSAs, Micropolitan Statistical Areas,
and CBSAs, and guidance on uses of the delineation of these areas. In
the CY 2015 HH PPS final rule (79 FR 66085 through 66087), we adopted
OMB's area delineations using a 1-year transition.
On August 15, 2017, OMB issued Bulletin No. 17-01 in which it
announced that one Micropolitan Statistical Area, Twin Falls, Idaho,
now qualifies as a Metropolitan Statistical Area. The new CBSA (46300)
comprises the principal city of Twin Falls, Idaho in Jerome County,
Idaho and Twin Falls County, Idaho. The CY 2022 HH PPS wage index value
for CBSA 46300, Twin Falls, Idaho, will be 0.8799. Bulletin No. 17-01
is available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/bulletins/2017/b-17-01.pdf.
On April 10, 2018, OMB issued OMB Bulletin No. 18-03, which
superseded the August 15, 2017 OMB Bulletin No. 17-01. On September 14,
2018, OMB issued OMB Bulletin No. 18-04 which superseded the April 10,
2018, OMB Bulletin No. 18-03. These bulletins established revised
delineations for Metropolitan Statistical Areas, Micropolitan
Statistical Areas, and Combined Statistical Areas, and provided
guidance on the use of the delineations of these statistical areas. A
copy of OMB Bulletin No. 18-04 may be obtained at: https://www.bls.gov/bls/omb-bulletin-18-04-revised-delineations-of-metropolitan-statistical-areas.pdf.
On March 6, 2020, OMB issued Bulletin No. 20-01, which provided
updates to and superseded OMB Bulletin No. 18-04 that was issued on
September 14, 2018. The attachments to OMB Bulletin No. 20-01 provided
detailed information on the update to statistical areas since September
14, 2018, and were based on the application of the 2010 Standards for
Delineating Metropolitan and Micropolitan Statistical Areas to Census
Bureau population estimates for July 1, 2017, and July 1, 2018. (For a
copy of this bulletin, we refer readers to https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf.) In OMB Bulletin No. 20-
01, OMB announced one new Micropolitan Statistical Area, one new
component of an existing Combined Statistical Are and changes to New
England City and Town Area (NECTA) delineations. In the CY 2021 HH PPS
final rule (85 FR 70298) we stated that if appropriate, we would
propose any updates from OMB Bulletin No. 20-01 in future rulemaking.
After reviewing OMB Bulletin No. 20-01, we have determined that the
changes in Bulletin 20-01 encompassed delineation changes that would
not affect the Medicare home health wage index for CY 2022.
Specifically, the updates consisted of changes to NECTA delineations
and the re-designation of a single rural county into a newly created
Micropolitan Statistical Area. The Medicare home health wage index does
not utilize NECTA definitions, and, as most recently discussed in the
CY 2021 HH PPS final rule (85 FR 70298) we include hospitals located in
Micropolitan Statistical areas in each State's rural wage index. In
other words, these OMB updates did not affect any geographic areas for
purposes of the wage index calculation for CY 2022.
The proposed CY 2023 wage index is available on the CMS website at:
https://www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center.
The following is a summary of the comments received on the CY 2023
wage index and our responses:
Comment: Several commenters recommended more far-reaching revisions
and reforms to the wage index methodology used under Medicare fee-for-
service. A commenter recommended that CMS create a home health specific
wage index as soon as possible. This commenter stated that CMS should
discontinue the use of any other segment (for example, IPPS Hospitals)
of healthcare as a proxy for home health and create a home health
specific wage index that is based solely on the issues impacting the
cost of labor and the ability to attract and retain quality staff to
the home health industry. Additionally, one commenter suggested that
CMS revisit MedPAC's 2007 proposal, which recommended that the Congress
repeal the existing hospital wage index statute, including
reclassifications and exceptions, and give the Secretary authority to
establish new wage index systems. Other commenters recommended that CMS
consider establishing a floor for home health wage indices, as it did
for hospice in 1983, to establish equity in geographic adjustment among
provider types.
Response: While we appreciate these recommendations, these comments
are outside the scope of the proposed rule. Any changes to the way we
adjust home health payments to account for geographic wage differences
beyond the wage index proposals discussed in the CY 2023 HH PPS
proposed rule (87 FR 37600), including the creation of a home health
specific wage index and the creation of a home health floor would have
to go through notice and comment rulemaking. The application of the
hospice floor is specific to hospices and does not apply to HHAs. The
hospice floor was developed through a negotiated rulemaking advisory
committee, under the process established by the Negotiated Rulemaking
Act of 1990 (Pub. L. 101- 648). Committee members included
representatives of national hospice associations; rural, urban, large,
and small hospices; multi-site hospices; consumer groups; and a
government representative. The Committee reached consensus on a
methodology that resulted in the hospice wage index. Because there is
no home health floor and the hospice floor applies only to hospices, we
continue to believe the use of the pre-floor and pre-reclassified
hospital wage index results in the most appropriate adjustment to the
labor portion of the home health payment rates. This position is
longstanding and consistent with other Medicare payment systems (for
example, SNF PPS, IRF PPS, and Hospice).
Comment: Several commenters recommended that CMS allow home health
providers to utilize geographic reclassification similar to the
provision
[[Page 66851]]
used for IPPS hospitals. These commenters expressed concern that home
health providers are not afforded the same options to adjust their wage
indices as hospitals, yet must compete for the same types of health
care professionals. A commenter stated that home health agencies that
serve Medicare beneficiaries in Maryland, but who compete for labor
with acute care hospitals and other post-acute care providers in the
Washington, DC-Virginia metropolitan area that pay average hourly wages
that are approximately 11 percent higher than the average hourly wages
paid by Maryland acute care hospitals, have had, and will continue to
have, difficulty maintaining adequate staffing levels and delivering
quality home health care at a time when reliance on these services is
at an all-time high. This commenter stated that the negative impact of
applying the pre-reclassification, pre-floor IPPS wage index to home
health agencies, coupled with the inability of a home health agency to
receive any adjustments to their wage index based on close proximity to
a major metropolitan area in an adjacent state with which it competes
for labor, is greatly exacerbated in Maryland, where acute care
hospitals are subject to a capped payment system that limits the
ability of such hospitals to increase wages from one year to the next.
Response: We thank the commenters for their recommendations.
However, the reclassification provision at section 1886(d)(10)(C)(i) of
the Act states that the Board shall consider the application of any
subsection (d) hospital requesting the Secretary change the hospital's
geographic classification. The reclassification provision found in
section 1886(d)(10) of the Act is specific to IPPS hospitals only.
Because the reclassification provision applies only to hospitals, we
continue to believe the use of the pre-floor and pre-reclassified
hospital wage index results in the most appropriate adjustment to the
labor portion of the home health payment rates. This position is
longstanding and consistent with other Medicare payment systems (for
example, SNF PPS, IRF PPS, and Hospice).
Comment: A commenter stated that when fully phased in, the
implementation of the $15 per-hour minimum wage increase, and the
additional $2 per hour minimum wage increase for home health care aides
which takes effect in October 2022 will cost over $4 billion for New
York HHAs across all payors (Medicaid, Medicare, managed care,
commercial insurance, and private-pay), and will never be adequately
addressed due to CMS's ongoing disposition to continue using the pre-
floor, pre-reclassified hospital wage index to adjust home health
costs.
Response: With regard to minimum wage standards, we note that such
increases would be reflected in future data used to create the hospital
wage index to the extent that these changes to State minimum wage
standards are reflected in increased wages to hospital staff.
Final Decision: After considering the comments received in response
to the proposed rule, and for the reasons discussed previously, we are
finalizing our proposal to use the FY 2023 pre-floor, pre-reclassified
hospital wage index data as the basis for the CY 2023 HH PPS wage
index. The final CY 2023 wage index is available on the CMS website at:
https://www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center.
(2) Permanent Cap on Wage Index Decreases
As discussed in section II.B.5.b.1 of this final rule, we have
proposed and finalized temporary transition policies in the past to
mitigate significant changes to payments due to changes to the home
health wage index. Specifically, in the CY 2015 HH PPS final rule (79
FR 66086), we implemented a 50/50 blend for all geographic areas
consisting of the wage index values using the then-current OMB area
delineations and the wage index values using OMB's new area
delineations based on OMB Bulletin No. 13-01. In the CY 2021 HH PPS
final rule (85 FR 73100), we adopted the revised OMB delineations with
a 5-percent cap on wage index decreases, where the estimated reduction
in a geographic area's wage index would be capped at 5-percent in CY
2021. We explained that we believed the 5-percent cap would provide
greater transparency and would be administratively less complex than
the prior methodology of applying a 50/50 blended wage index. We noted
that this transition approach struck an appropriate balance by
providing a transition period to mitigate the resulting short-term
instability and negative impacts on providers and time for them to
adjust to their new labor market area delineations and wage index
values.
In the CY 2022 HH PPS final rule (86 FR 62285), a few commenters
stated that providers should be protected against substantial payment
reductions due to dramatic reductions in wage index values from one
year to the next. However, because we did not propose any transition
policy in the CY 2022 HH PPS proposed rule, we did not extend the
transition period for CY 2022. Instead, in the CY 2022 HH PPS final
rule, we stated that we continued to believe that applying the 5-
percent cap transition policy in year one provided an adequate
safeguard against any significant payment reductions associated with
the adoption of the revised CBSA delineations in CY 2021, allowed for
sufficient time to make operational changes for future calendar years,
and provided a reasonable balance between mitigating some short-term
instability in home health payments and improving the accuracy of the
payment adjustment for differences in area wage levels. However, we
acknowledged that certain changes to wage index policy may
significantly affect Medicare payments. In addition, we reiterated that
our policy principles with regard to the wage index include generally
using the most current data and information available and providing
that data and information, as well as any approaches to addressing any
significant effects on Medicare payments resulting from these potential
scenarios, in notice and comment rulemaking. Consistent with these
principles, we considered how best to address potential scenarios in
which changes to wage index policy may significantly affect Medicare
home health payments. In the past, we have established transition
policies of limited duration to phase in significant changes to labor
market areas. In taking this approach in the past, we sought to
mitigate short-term instability and fluctuations that can negatively
impact providers due to wage index changes. Sections 1895(b)(4)(A)(ii)
and (b)(4)(C) of the Act requires the Secretary to provide appropriate
adjustments to the proportion of the payment amount under the HH PPS
that account for area wage differences, using adjustment factors that
reflect the relative level of wages and wage-related costs applicable
to the furnishing of home health services. We have previously stated
that, because the wage index is a relative measure of the value of
labor in prescribed labor market areas, we believe it is important to
implement new labor market area delineations with as minimal a
transition as is reasonably possible. However, we recognize that
changes to the wage index have the potential to create instability and
significant negative impacts on certain providers even when labor
market areas do not change. In addition, year-to-year fluctuations in
an area's wage index can occur due to external factors beyond a
provider's control, such as the COVID-
[[Page 66852]]
19 PHE, and for an individual provider, these fluctuations can be
difficult to predict. We also recognize that predictability in Medicare
payments is important to enable providers to budget and plan their
operations.
In light of these considerations, we proposed a permanent approach
that increases the predictability of home health payments for providers
and mitigates instability and significant negative impacts to providers
resulting from changes to the wage index by smoothing year-to-year
changes in providers' wage indexes.
As previously discussed, we believe that applying a 5-percent cap
on wage index decreases for CY 2021 provided greater transparency and
was administratively less complex than prior transition methodologies.
In addition, we believe this methodology mitigates short-term
instability and fluctuations that can negatively impact providers due
to wage index changes. Lastly, we note that we believe the 5-percent
cap we applied to all wage index decreases for CY 2021 provided an
adequate safeguard against significant payment reductions related to
the adoption of the revised CBSAs. However, as discussed earlier in
this section of this final rule, we recognize there are circumstances
that a one-year mitigation policy would not effectively address future
years in which providers continue to be negatively affected by
significant wage index decreases.
Typical year-to-year variation in the home health wage index has
historically been within 5-percent, and we expect this will continue to
be the case in future years. Therefore, we believe that applying a 5-
percent cap on all wage index decreases in future years, regardless of
the reason for the decrease, would effectively mitigate instability in
home health payments due to any significant wage index decreases that
may affect providers in any year that commenters raised in the CY 2022
HH PPS final rule. Additionally, we believe that applying a 5-percent
cap on all wage index decreases would increase the predictability of
home health payments for providers, enabling them to more effectively
budget and plan their operations. Lastly, we believe that applying a 5-
percent cap on all wage index decreases, from the prior year, would
have a small overall impact on the labor market area wage index system.
As discussed in further detail in section VII.C. of this final rule, we
estimate that applying a 5-percent cap on all wage index decreases,
from the prior year, will have a very small effect on the wage index
budget neutrality factors for CY 2023. Because the wage index is a
measure of the value of labor (wage and wage-related costs) in a
prescribed labor market area relative to the national average, we
anticipate that most providers will not experience year-to-year wage
index declines greater than 5-percent in any given year. We believe
that applying a 5-percent cap on all wage index decreases, from the
prior year, would continue to maintain the accuracy of the overall
labor market area wage index system.
Therefore, for CY 2023 and subsequent years, we proposed to apply a
permanent 5-percent cap on any decrease to a geographic area's wage
index from its wage index in the prior year, regardless of the
circumstances causing the decline. That is, we proposed that a
geographic area's wage index for CY 2023 would not be less than 95
percent of its final wage index for CY 2022, regardless of whether the
geographic area is part of an updated CBSA, and that for subsequent
years, a geographic area's wage index would not be less than 95 percent
of its wage index calculated in the prior CY. We further proposed that
if a geographic area's prior CY wage index is calculated based on the
5-percent cap, then the following year's wage index would not be less
than 95 percent of the geographic area's capped wage index. For
example, if a geographic area's wage index for CY 2023 is calculated
with the application of the 5-percent cap, then its wage index for CY
2024 would not be less than 95 percent of its capped wage index in CY
2023. Likewise, we proposed to make the corresponding regulations text
changes at Sec. 484.220(c) as follows: Beginning on January 1, 2023,
CMS will apply a cap on decreases to the home health wage index such
that the wage index applied to a geographic area is not less than 95
percent of the wage index applied to that geographic area in the prior
CY. This 5-percent cap on negative wage index changes would be
implemented in a budget neutral manner through the use of wage index
budget neutrality factors.
We received 47 comments on the proposed permanent cap on wage index
decreases.
Comment: The majority of commenters expressed support for the
proposal to cap wage index decreases at 5 percent.
Response: We thank the commenters for their support of the proposed
wage index cap policy.
Comment: MedPAC expressed support for the wage index cap proposal,
but recommended that the 5-percent cap also extend to wage index
increases of more than 5 percent, such that no geographic area would
have its wage index value increase or decrease by more than 5 percent
in any given year. In addition, MedPAC recommended that the
implementation of the revised relative wage index values (where changes
are limited to plus or minus 5 percent) should be done in a budget-
neutral manner.
Response: We appreciate MedPAC's suggestion that the cap on wage
index changes of more than 5 percent should also be applied to
increases in the wage index. However, as we discussed in the proposed
rule, one purpose of the proposed policy is to help mitigate the
significant negative impacts of certain wage index changes. As we noted
in the CY 2023 HH PPS proposed rule (87 FR 37600), we believe applying
a 5-percent cap on all wage index decreases would support increased
predictability about home health payments for providers, enabling them
to more effectively budget and plan their operations. That is, we
proposed to cap decreases because we believe that a provider would be
able to more effectively budget and plan when there is predictability
about its expected minimum level of home health payments in the
upcoming calendar year. We did not propose to limit wage index
increases because we do not believe such a policy would enable HHAs to
more effectively budget and plan their operations. Rather, we believe
it would be more appropriate to allow providers that would experience
an increase in their wage index value to receive the full benefit of
their increased wage index value.
Comment: A few commenters recommended lowering the threshold
percentage of the cap to percentages to 2 percent. In general, these
commenters believe that lowering the cap would better allow HHAs to
plan their operations. Other commenters recommended that CMS finalize
the permanent cap in a non-budget neutral way.
Response: We believe that the 5-percent cap on wage index decreases
is an adequate safeguard against any significant payment reductions and
that lowering the cap on wage index decreases to 2 percent is not
appropriate. We also believe that 5 percent is a reasonable level for
the cap because it would more effectively mitigate any significant
decreases in a HHA's wage index for future CYs, while still balancing
the importance of ensuring that area wage index values accurately
reflect relative differences in area wage levels. Additionally, we
believe that a 5-percent cap on wage index decreases in CY 2023 and
beyond is sufficient and provides a degree of predictability in payment
changes for
[[Page 66853]]
providers; and it would not be appropriate to implement the cap policy
in a non-budget neutral manner. Our longstanding policy is to apply the
wage index budget neutrality factor to home health payments to
eliminate the aggregate effect of wage index updates and revisions,
such as updates in the underlying hospital wage data as well as other
proposed wage index policies, resulting in any wage index changes being
budget-neutral in the aggregate. In the CY 2023 HH PPS proposed rule
(87 FR 37600), we stated that we believe that applying a 5-percent cap
on all wage index decreases, from the prior year, would have a small
overall impact on the labor market area wage index system. We estimate
that applying a 5-percent cap on all wage index decreases, from the
prior year, will have a very small effect on the wage index budget
neutrality factor for CY 2023 and we expect the impact to the wage
index budget neutrality factor in future years will continue to be
minimal.
Comment: Several commenters recommended CMS adopt a transition
policy that treats affected home health agencies CY 2023 wage index as
if a 5-percent cap had also been implemented for CY 2022, while other
commenters requested that CMS retroactively apply the permanent wage
index cap proposal to CY 2022 payments.
Response: We thank commenters for these recommendations. In CY 2021
rulemaking, CMS proposed and finalized the one-year transition policy
for CY 2021 only. We have historically implemented 1-year transitions,
as discussed in the CY 2006 (70 FR 68132) and in the CY 2015 (79 FR
66032) final rules, to address CBSA changes due to substantial updates
to OMB delineations. Our policy principles with regard to the wage
index are to use the most current data and information available.
Therefore, we proposed that the CY 2023 HH PPS wage index policy would
be prospective to mitigate any significant decreases beginning in CY
2023, not retroactively.
As such, we did not calculate or propose the CY 2023 wage index as
if the cap was in place for 2022. We note that we received comments on
the CY 2022 HH PPS proposed rule requesting an extension to the one-
year transition policy for CY 2021; however, because we did not propose
this policy, or the wage index budget neutrality factor that we would
have anticipated such a potential policy proposal to require in the CY
2023 HH PPS proposed rule, we did not propose a policy that treats
affected HHAs CY 2023 wage index as if a 5-percent cap had also been
implemented for CY 2022, or include any data and information that
warrant the use of a cap for CY 2022 data in order to calculate the CY
2023 wage index. While such a policy may benefit some providers, it
would change the wage index budget neutrality factor, and would impact
the CY 2023 payment rates for all providers without allowing them the
opportunity to comment.
Final Decision: CMS is finalizing, for CY 2023 and subsequent
years, the application of a permanent 5-percent cap on any decrease to
a geographic area's wage index from its wage index in the prior year,
regardless of the circumstances causing the decline. That is, we are
finalizing our policy that a geographic area's wage index for CY 2023
would not be less than 95 percent of its final wage index for CY 2022,
regardless of whether the geographic area is part of an updated CBSA,
and that for subsequent years, a geographic area's wage index would not
be less than 95 percent of its wage index calculated in the prior CY.
We are codifying the permanent cap on wage index decreases in
regulation at Sec. 484.220(c).
As previously discussed, we believe this methodology will maintain
the HH PPS wage index as a relative measure of the value of labor in
prescribed labor market areas, increase predictability of home health
payments for providers, and mitigate instability and significant
negative impacts to providers resulting from significant changes to the
wage index. In section II.B.5.c. of this final rule, we estimate the
impact to payments for providers in CY 2023 based on this policy. We
also note that we will examine the effects of this policy on an ongoing
basis in the future in order to assess its appropriateness.
c. CY 2023 Annual Payment Update
(1) Background
The HH PPS has been in effect since October 1, 2000. As set forth
in the July 3, 2000 final rule (65 FR 41128), the base unit of payment
under the HH PPS was a national, standardized 60-day episode payment
rate. As finalized in the CY 2019 HH PPS final rule with comment period
(83 FR 56406), and as described in the CY 2020 HH PPS final rule with
comment period (84 FR 60478), the unit of home health payment changed
from a 60-day episode to a 30-day period effective for those 30-day
periods beginning on or after January 1, 2020.
As set forth in Sec. 484.220, we adjust the national, standardized
prospective payment rates by a case-mix relative weight and a wage
index value based on the site of service for the beneficiary. To
provide appropriate adjustments to the proportion of the payment amount
under the HH PPS to account for area wage differences, we apply the
appropriate wage index value to the labor portion of the HH PPS rates.
In the CY 2019 HH PPS final rule with comment period (83 FR 56435), we
finalized rebasing the home health market basket to reflect 2016
Medicare cost report data. We also finalized a revision to the labor
share to reflect the 2016-based home health market basket compensation
(Wages and Salaries plus Benefits) cost weight. We finalized that for
CY 2019 and subsequent years, the labor share would be 76.1 percent and
the non-labor share would be 23.9 percent. The following are the steps
we take to compute the case-mix and wage-adjusted 30-day period payment
amount for CY 2023:
Multiply the national, standardized 30-day period rate by
the patient's applicable case-mix weight.
Divide the case-mix adjusted amount into a labor (76.1
percent) and a non-labor portion (23.9 percent).
Multiply the labor portion by the applicable wage index
based on the site of service of the beneficiary.
Add the wage-adjusted portion to the non-labor portion,
yielding the case-mix and wage adjusted 30-day period payment amount,
subject to any additional applicable adjustments.
We provide annual updates of the HH PPS rate in accordance with
section 1895(b)(3)(B) of the Act. Section 484.225 sets forth the
specific annual percentage update methodology. In accordance with
section 1895(b)(3)(B)(v) of the Act and Sec. 484.225(i), for an HHA
that does not submit home health quality data, as specified by the
Secretary, the unadjusted national prospective 30-day period rate is
equal to the rate for the previous calendar year increased by the
applicable home health payment update, minus 2 percentage points. Any
reduction of the percentage change would apply only to the calendar
year involved and would not be considered in computing the prospective
payment amount for a subsequent calendar year.
The final claim that the HHA submits for payment determines the
total payment amount for the period and whether we make an applicable
adjustment to the 30-day case-mix and wage-adjusted payment amount. The
end date of the 30-day period, as reported on the claim, determines
which calendar year rates Medicare will use to pay the claim.
We may adjust a 30-day case-mix and wage-adjusted payment based on
the information submitted on the claim to reflect the following:
[[Page 66854]]
A LUPA is provided on a per-visit basis as set forth in
Sec. Sec. 484.205(d)(1) and 484.230.
A PEP adjustment as set forth in Sec. Sec. 484.205(d)(2)
and 484.235.
An outlier payment as set forth in Sec. Sec.
484.205(d)(3) and 484.240.
(2) CY 2023 National, Standardized 30-Day Period Payment Amount
Section 1895(b)(3)(A)(i) of the Act requires that the standard
prospective payment rate and other applicable amounts be standardized
in a manner that eliminates the effects of variations in relative case-
mix and area wage adjustments among different home health agencies in a
budget-neutral manner. To determine the CY 2023 national, standardized
30-day period payment rate, we apply a permanent behavioral adjustment
factor, a case-mix weights recalibration budget neutrality factor, a
wage index budget neutrality factor and the home health payment update
percentage discussed in section II.C.2. of this final rule. As
discussed in section II.B.2.f. of this final rule, we are implementing
a permanent behavior adjustment of-3.925 percent to prevent further
overpayments. The permanent behavior adjustment factor is 0.96075 (1-
0.03925). As discussed previously, to ensure the changes to the PDGM
case-mix weights are implemented in a budget neutral manner, we apply a
case-mix weights budget neutrality factor to the CY 2022 national,
standardized 30-day period payment rate. The case-mix weights budget
neutrality factor for CY 2023 is 0.9904. Additionally, we also apply a
wage index budget neutrality to ensure that wage index updates and
revisions are implemented in a budget neutral manner. Typically, the
wage index budget neutrality factor is calculated using the most
recent, complete home health claims data available. However, in the CY
2022 HH PPS final rule, due to the COVID-19 PHE, we looked at using the
previous calendar year's home health claims data (CY 2019) to determine
if there were significant differences between utilizing 2019 and 2020
claims data. Our analysis showed that there was only a small difference
between the wage index budget neutrality factors calculated using CY
2019 and CY 2020 home health claims data.
Therefore, for CY 2022 we decided to continue our practice of using
the most recent, complete home health claims data available; that is,
we used CY 2020 claims data for the CY 2022 payment rate updates. For
CY 2023 rate setting, we do not anticipate significant differences
between using pre COVID-19 PHE data (CY 2019 claims) and the most
recent claims data at the time of rulemaking (CY 2021 claims).
Therefore, we will continue our practice of using the most recent,
complete utilization data at the time of rulemaking; that is, we are
using CY 2021 claims data for CY 2023 payment rate updates.
To calculate the wage index budget neutrality factor, we first
determine the payment rate needed for non-LUPA 30-day periods using the
CY 2023 wage index so those total payments are equivalent to the total
payments for non-LUPA 30-day periods using the CY 2022 wage index and
the CY 2022 national standardized 30-day period payment rate adjusted
by the case-mix weights recalibration neutrality factor. Then, by
dividing the payment rate for non-LUPA 30-day periods using the CY 2023
wage index with a 5-percent cap on wage index decreases by the payment
rate for non-LUPA 30-day periods using the CY 2022 wage index, we
obtain a wage index budget neutrality factor of 1.0001. We then apply
the wage index budget neutrality factor of 1.0001 to the 30-day period
payment rate.
Next, we update the 30-day period payment rate by the CY 2023 home
health payment update percentage of 4.0 percent. The CY 2023 national,
standardized 30-day period payment rate is calculated in Table 17.
Table 17--CY 2023 National, Standardized 30-Day Period Payment Amount
[GRAPHIC] [TIFF OMITTED] TR04NO22.039
The CY 2023 national, standardized 30-day period payment rate for a
HHA that does not submit the required quality data is updated by the CY
2023 home health payment update of 4.0 percent minus 2 percentage
points and is shown in Table 18.
Table 18--CY 2023 National, Standardized 30-Day Period Payment Amount
for HHAS That Do Not Submit the Quality Data
[GRAPHIC] [TIFF OMITTED] TR04NO22.040
[[Page 66855]]
(3) CY 2023 National Per-Visit Rates for 30-Day Periods of Care
The national per-visit rates are used to pay LUPAs and are also
used to compute imputed costs in outlier calculations. The per-visit
rates are paid by type of visit or home health discipline. The six home
health disciplines are as follows:
Home health aide (HH aide).
Medical Social Services (MSS).
Occupational therapy (OT).
Physical therapy (PT).
Skilled nursing (SN).
Speech-language pathology (SLP).
To calculate the CY 2023 national per-visit rates, we started with
the CY 2022 national per-visit rates. Then we applied a wage index
budget neutrality factor to ensure budget neutrality for LUPA per-visit
payments. We calculated the wage index budget neutrality factor by
simulating total payments for LUPA 30-day periods of care using the CY
2023 wage index with a 5-percent cap on wage index decreases and
comparing it to simulated total payments for LUPA 30-day periods of
care using the CY 2022 wage index (with no 5-percent cap). By dividing
the total payments for LUPA 30-day periods of care using the CY 2023
wage index by the total payments for LUPA 30-day periods of care using
the CY 2022 wage index, we obtained a wage index budget neutrality
factor of 1.0007. We apply the wage index budget neutrality factor in
order to calculate the CY 2022 national per-visit rates.
The LUPA per-visit rates are not calculated using case-mix weights,
therefore, no case-mix weights budget neutrality factor is needed to
ensure budget neutrality for LUPA payments. Additionally, we are not
applying the permanent behavior adjustment to the per-visit payment
rates but only the case-mix adjusted payment rate. The national per-
visit rates are adjusted by the wage index based on the site of service
of the beneficiary. The per-visit payments for LUPAs are separate from
the LUPA add-on payment amount, which is paid for 30-day periods that
occur as the only 30-day period or the initial period in a sequence of
adjacent 30-day periods. The CY 2023 national per-visit rates for HHAs
that submit the required quality data are updated by the CY 2023 home
health payment update percentage of 4.0 percent and are shown in Table
19.
Table 19--CY 2023 National Per-Visit Payment Amounts
[GRAPHIC] [TIFF OMITTED] TR04NO22.041
The CY 2023 per-visit payment rates for HHAs that do not submit the
required quality data are updated by the CY 2023 home health payment
update percentage of 4.0 percent minus 2 percentage points and are
shown in Table 20.
Table 20--CY 2023 National Per-Visit Payment Amounts for HHAS That Do
Not Submit the Required Quality Data
[GRAPHIC] [TIFF OMITTED] TR04NO22.042
[[Page 66856]]
(4) LUPA Add-On Factors
Prior to the implementation of the 30-day unit of payment, LUPA
episodes were eligible for a LUPA add-on payment if the episode of care
was the first or only episode in a sequence of adjacent episodes. As
stated in the CY 2008 HH PPS final rule, the average visit lengths in
these initial LUPAs are 16 to 18 percent higher than the average visit
lengths in initial non-LUPA episodes (72 FR 49848). LUPA episodes that
occur as the only episode or as an initial episode in a sequence of
adjacent episodes are adjusted by applying an additional amount to the
LUPA payment before adjusting for area wage differences. In the CY 2014
HH PPS final rule (78 FR 72305), we changed the methodology for
calculating the LUPA add-on amount by finalizing the use of three LUPA
add-on factors: 1.8451 for SN; 1.6700 for PT; and 1.6266 for SLP. We
multiply the per-visit payment amount for the first SN, PT, or SLP
visit in LUPA episodes that occur as the only episode or an initial
episode in a sequence of adjacent episodes by the appropriate factor to
determine the LUPA add-on payment amount.
In the CY 2019 HH PPS final rule with comment period (83 FR 56440),
in addition to finalizing a 30-day unit of payment, we finalized our
policy of continuing to multiply the per-visit payment amount for the
first skilled nursing, physical therapy, or speech-language pathology
visit in LUPA periods that occur as the only period of care or the
initial 30-day period of care in a sequence of adjacent 30-day periods
of care by the appropriate add-on factor (1.8451 for SN, 1.6700 for PT,
and 1.6266 for SLP) to determine the LUPA add-on payment amount for 30-
day periods of care under the PDGM. For example, using the proposed CY
2023 per-visit payment rates for HHAs that submit the required quality
data, for LUPA periods that occur as the only period or an initial
period in a sequence of adjacent periods, if the first skilled visit is
SN, the payment for that visit would be $301.29 (1.8451 multiplied by
$163.29), subject to area wage adjustment.
(5) Occupational Therapy LUPA Add-On Factor
In order to implement Division CC, section 115, of CAA 2021, CMS
finalized changes to regulations at Sec. 484.55(a)(2) and (b)(3) that
allowed occupational therapists to conduct initial and comprehensive
assessments for all Medicare beneficiaries under the home health
benefit when the plan of care does not initially include skilled
nursing care, but either PT or SLP (86 FR 62351). This change, led to
us establishing a LUPA add-on factor for calculating the LUPA add-on
payment amount for the first skilled occupational therapy (OT) visit in
LUPA periods that occurs as the only period of care or the initial 30-
day period of care in a sequence of adjacent 30-day periods of care.
We stated in the CY 2022 HH PPS final rule (86 FR 62289) that, as
there is not sufficient data regarding the average excess of minutes
for the first visit in LUPA periods when the initial and comprehensive
assessments are conducted by occupational therapists, we will use the
PT LUPA add-on factor of 1.6700 as a proxy. We also stated that we
would use the PT LUPA add-on factor as a proxy until we have CY 2022
data to establish a more accurate OT add-on factor for the LUPA add-on
payment amounts (86 FR 62289).
d. Payments for High-Cost Outliers Under the HH PPS
(1) Background
Section 1895(b)(5) of the Act allows for the provision of an
addition or adjustment to the home health payment amount otherwise made
in the case of outliers because of unusual variations in the type or
amount of medically necessary care. Under the HH PPS and the previous
unit of payment (that is, 60-day episodes), outlier payments were made
for 60-day episodes whose estimated costs exceed a threshold amount for
each HHRG. The episode's estimated cost was established as the sum of
the national wage-adjusted per visit payment amounts delivered during
the episode. The outlier threshold for each case-mix group or PEP
adjustment defined as the 60-day episode payment or PEP adjustment for
that group plus a fixed-dollar loss (FDL) amount. For the purposes of
the HH PPS, the FDL amount is calculated by multiplying the home health
FDL ratio by a case's wage-adjusted national, standardized 60-day
episode payment rate, which yields an FDL dollar amount for the case.
The outlier threshold amount is the sum of the wage and case-mix
adjusted PPS episode amount and wage-adjusted FDL amount. The outlier
payment is defined to be a proportion of the wage-adjusted estimated
cost that surpasses the wage-adjusted threshold. The proportion of
additional costs over the outlier threshold amount paid as outlier
payments is referred to as the loss-sharing ratio.
As we noted in the CY 2011 HH PPS final rule (75 FR 70397 through
70399), section 3131(b)(1) of the Affordable Care Act amended section
1895(b)(3)(C) of the Act to require that the Secretary reduce the HH
PPS payment rates such that aggregate HH PPS payments were reduced by 5
percent. In addition, section 3131(b)(2) of the Affordable Care Act
amended section 1895(b)(5) of the Act by redesignating the existing
language as section 1895(b)(5)(A) of the Act and revised the language
to state that the total amount of the additional payments or payment
adjustments for outlier episodes could not exceed 2.5 percent of the
estimated total HH PPS payments for that year. Section 3131(b)(2)(C) of
the Affordable Care Act also added section 1895(b)(5)(B) of the Act,
which capped outlier payments as a percent of total payments for each
HHA for each year at 10 percent.
Beginning in CY 2011, we reduced payment rates by 5 percent and
targeted up to 2.5 percent of total estimated HH PPS payments to be
paid as outliers. To do so, we first returned the 2.5 percent held for
the target CY 2010 outlier pool to the national, standardized 60-day
episode rates, the national per visit rates, the LUPA add-on payment
amount, and the NRS conversion factor for CY 2010. We then reduced the
rates by 5 percent as required by section 1895(b)(3)(C) of the Act, as
amended by section 3131(b)(1) of the Affordable Care Act. For CY 2011
and subsequent calendar years we targeted up to 2.5 percent of
estimated total payments to be paid as outlier payments, and apply a
10-percent agency-level outlier cap.
In the CY 2017 HH PPS proposed and final rules (81 FR 43737 through
43742 and 81 FR 76702), we described our concerns regarding patterns
observed in home health outlier episodes. Specifically, we noted the
methodology for calculating home health outlier payments may have
created a financial incentive for providers to increase the number of
visits during an episode of care in order to surpass the outlier
threshold; and simultaneously created a disincentive for providers to
treat medically complex beneficiaries who require fewer but longer
visits. Given these concerns, in the CY 2017 HH PPS final rule (81 FR
76702), we finalized changes to the methodology used to calculate
outlier payments, using a cost-per-unit approach rather than a cost-
per-visit approach. This change in methodology allows for more accurate
payment for outlier episodes, accounting for both the number of visits
during an episode of care and the length of the visits provided. Using
this approach, we now convert the national per-visit rates into per 15-
minute unit rates. These per 15-minute unit rates are used to calculate
the estimated cost of
[[Page 66857]]
an episode to determine whether the claim will receive an outlier
payment and the amount of payment for an episode of care. In
conjunction with our finalized policy to change to a cost-per-unit
approach to estimate episode costs and determine whether an outlier
episode should receive outlier payments, in the CY 2017 HH PPS final
rule we also finalized the implementation of a cap on the amount of
time per day that would be counted toward the estimation of an
episode's costs for outlier calculation purposes (81 FR 76725).
Specifically, we limited the amount of time per day (summed across the
six disciplines of care) to 8 hours (32 units) per day when estimating
the cost of an episode for outlier calculation purposes.
In the CY 2017 HH PPS final rule (81 FR 76724), we stated that we
did not plan to re-estimate the average minutes per visit by discipline
every year. Additionally, the per unit rates used to estimate an
episode's cost were updated by the home health update percentage each
year, meaning we would start with the national per visit amounts for
the same calendar year when calculating the cost-per-unit used to
determine the cost of an episode of care (81 FR 76727). We will
continue to monitor the visit length by discipline as more recent data
becomes available, and may propose to update the rates as needed in the
future.
In the CY 2019 HH PPS final rule with comment period (83 FR 56521),
we finalized a policy to maintain the current methodology for payment
of high-cost outliers upon implementation of PDGM beginning in CY 2020
and calculated payment for high-cost outliers based upon 30-day period
of care. Upon implementation of the PDGM and 30-day unit of payment, we
finalized the FDL ratio of 0.56 for 30-day periods of care in CY 2020.
Given that CY 2020 was the first year of the PDGM and the change to a
30-day unit of payment, we finalized to maintain the same FDL ratio of
0.56 in CY 2021 as we did not have sufficient CY 2020 data at the time
of CY 2021 rulemaking to proposed a change to the FDL ratio for CY
2021. In the CY 2022 HH PPS final rule (86 FR 62292), we estimated that
outlier payments would be approximately 1.8 percent of total HH PPS
final rule payments if we maintained an FDL of 0.56 in CY 2022.
Therefore, in order to pay up to, but no more than, 2.5 percent of
total payments as outlier payments we finalized an FDL of 0.40 for CY
2022.
(2) FDL Ratio for CY 2023
For a given level of outlier payments, there is a trade-off between
the values selected for the FDL ratio and the loss-sharing ratio. A
high FDL ratio reduces the number of periods that can receive outlier
payments, but makes it possible to select a higher loss-sharing ratio,
and therefore, increase outlier payments for qualifying outlier
periods. Alternatively, a lower FDL ratio means that more periods can
qualify for outlier payments, but outlier payments per period must be
lower.
The FDL ratio and the loss-sharing ratio are selected so that the
estimated total outlier payments do not exceed the 2.5 percent
aggregate level (as required by section 1895(b)(5)(A) of the Act).
Historically, we have used a value of 0.80 for the loss-sharing ratio,
which, we believe preserves incentives for agencies to attempt to
provide care efficiently for outlier cases. With a loss-sharing ratio
of 0.80, Medicare pays 80 percent of the additional estimated costs
that exceed the outlier threshold amount. Using CY 2021 claims data (as
of March 21, 2022) and given the statutory requirement that total
outlier payments do not exceed 2.5 percent of the total payments
estimated to be made under the HH PPS, we proposed an FDL ratio of 0.44
for CY 2023. We noted that we would update the FDL, if needed, in the
final rule once we have more complete CY 2021 claims data. Using more
complete CY 2021 claims data (as of July 15, 2022), the final FDL ratio
for CY 2023 would need to be 0.35 to pay up to, but no more than, 2.5
percent of the total payment as outlier payments in CY 2023.
Final Decision: We did not receive any public comments on the
proposed FDL ratio. We are finalizing the fixed-dollar loss ratio of
0.35 for CY 2023, in order to ensure that total outlier payments do not
exceed 2.5 percent of the total aggregate payments, as required by
section 1895(b)(5)(A) of the Act. As noted previously, this updated
ratio is based on more complete CY 2021 claims data than was used to
determine the proposed FDL ratio.
K. Comment Solicitation on the Collection of Data on the Use of
Telecommunications Technology Under the Medicare Home Health Benefit
Even prior to the COVID-19 PHE, CMS acknowledged the importance of
technology in allowing HHAs the flexibility of furnishing services
remotely. In the CY 2019 HH PPS final rule with comment (83 FR 56406),
for purposes of the Medicare home health benefit, we finalized the
definition of ``remote patient monitoring'' in regulation at 42 CFR
409.46(e) as the collection of physiologic data (for example,
electrocardiogram (ECG), blood pressure, glucose monitoring) digitally
stored and/or transmitted by the patient and/or caregiver to the HHA.
In the CY 2019 HH PPS final rule with comment period, we also finalized
in regulation at Sec. 409.46(e) that the costs of remote patient
monitoring are considered allowable administrative costs (operating
expenses) if remote patient monitoring is used by the HHA to augment
the care planning process (83 FR 56527).
With the declaration of the COVID-19 PHE in early 2020, the use of
telecommunications technology has become more prominent in the delivery
of healthcare in the United States. Anecdotally, many beneficiaries
preferred to stay home than go to physician's offices and outpatient
centers to seek care, while also limiting the number and frequency of
care providers furnishing services inside their homes to avoid exposure
to COVID-19. Accordingly, CMS implemented additional policies under the
HH PPS to make providing and receiving services via telecommunications
technology easier. In the first COVID-19 PHE interim final rule with
comment period (IFC) (85 FR 19230), we changed the plan of care
requirements at Sec. 409.43(a) on an interim basis, for the purposes
of Medicare payment, to state that the plan of care must include any
provision of remote patient monitoring or other services furnished via
a telecommunications system. The plan of care must also describe how
the use of such technology is tied to the patient-specific needs as
identified in the comprehensive assessment and will help to achieve the
goals outlined on the plan of care. The amended plan of care
requirements at Sec. 409.43(a) also state that these services cannot
substitute for a home visit ordered as part of the plan of care and
cannot be considered a home visit for the purposes of patient
eligibility or payment, in accordance with section 1895(e)(1)(A) and
(B) of the Act. The CY 2021 HH PPS final rule (85 FR 70298) finalized
these changes on a permanent basis, as well as amended Sec. 409.46(e)
to include not only remote patient monitoring, but other communication
or monitoring services consistent with the plan of care for the
individual, on the home health cost report as allowable administrative
costs.
Sections 1895(e)(1)(A) and (B) of the Act specify that
telecommunications services cannot substitute for in-person home health
services ordered as part of the plan of care certified by a physician
and are not considered a home health visit for purposes of eligibility
or payment under Medicare. Though the
[[Page 66858]]
use of telecommunications technology is not to be used as a substitute
for in-person home health services, as ordered on the plan of care, and
services provided through the use of telecommunications technology
(rather than in-person) are not considered a home health visit,
anecdotally we have heard that HHAs are using telecommunication
services during the course of a 30-day period of care and as a result
of the COVID-19 PHE, as described previously. In the first COVID-19 PHE
IFC, we provided an example describing a situation where the use of
technology is not a substitute for the provision of in-person visits as
ordered on the plan of care, rather the plan of care is updated to
reflect a change in the frequency of the in-person visits and to
include ``virtual visits'' as part of the management of the home health
patient (85 FR 19248).
Currently, the collection of data on the use of telecommunications
technology is limited to overall cost data on a broad category of
telecommunications services as a part of an HHA's administrative costs
on line 5 of the HHA Medicare cost reports.\26\ As we noted in the CY
2019 HH PPS proposed rule, these costs would then be factored into the
costs per visit. Factoring the costs associated with telecommunications
systems into the costs per visit has important implications for
assessing home health costs relevant to payment, including HHA Medicare
margin calculations (83 FR 32426). Data on the use of
telecommunications technology during a 30-day period of care at the
beneficiary level is not currently collected on the home health claim.
While the provision of services furnished via a telecommunications
system must be included on the patient's plan of care, CMS does not
routinely review plans of care to determine the extent to which these
services are actually being furnished.
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\26\ Found in Ch47 of the Provider Reimbursement Manual at
https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021935.
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Collecting data on the use of telecommunications technology on home
health claims would allow CMS to analyze the characteristics of the
beneficiaries utilizing services furnished remotely, and will give us a
broader understanding of the social determinants that affect who
benefits most from these services, including what barriers may
potentially exist for certain subsets of beneficiaries. Furthermore, in
their March 2022 Report to the Congress: Medicare Payment Policy,
MedPAC recommended tracking the use of telehealth in the home health
care benefit on home health claims in order to improve payment
accuracy.\27\ As such, to collect more complete data on the use of
telecommunications technology in the provision of home health services,
we solicited comments on the collection of such data on home health
claims, which we aim to begin collecting by January 1, 2023 on a
voluntary basis by HHAs, and will begin to require this information be
reported on claims by July of 2023. Specifically, we solicited comments
on the use of three new G-codes identifying when home health services
are furnished using synchronous telemedicine rendered via a real-time
two-way audio and video telecommunications system; synchronous
telemedicine rendered via telephone or other real-time interactive
audio-only telecommunications system; and the collection of physiologic
data digitally stored and/or transmitted by the patient to the home
health agency, that is, remote patient monitoring. We would capture the
utilization of remote patient monitoring through the inclusion of the
start date of the remote patient monitoring and the number of units
indicated on the claim. This may help us understand in general how long
remote monitoring is used for individual patients and for which
conditions. Although we plan to begin collecting this information
beginning with these three G-codes on January 1, 2023, we are
interested in comments on whether there are other common uses of
telecommunications technology under the home health benefit that would
warrant additional G-codes that would be helpful in tracking the use of
such technology in the provision of care.
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\27\ Medicare Payment Advisory Commission (MedPAC), Report to
the Congress: Medicare Payment Policy. March 2022, P. 271. found at
https://www.medpac.gov/wp-content/uploads/2022/03/Mar22_MedPAC_ReportToCongress_SEC.pdf.
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In accordance with section 40.2 in Chapter 10 of the Medicare
Claims Processing Manual (Pub. L. 100-04), we plan to issue
instructions that these forthcoming G-codes are to be used to report
services in line item detail and each service must be reported as a
separate line under the appropriate revenue code (04x--Physical
Therapy, 043x--Occupational Therapy, 044x--Speech-Language Pathology,
055x--Skilled Nursing, 056x--Medical Social Services, or 057x--Home
Health Aide). While we do not plan on limiting the use of these G-codes
to any particular discipline, we would not anticipate use of such
technology would be reported under certain revenue codes such as 027x
or 0623--Medical Supplies, or revenue code 057x--Home Health Aide. We
requested comments from the public on our reasoning that, due to the
hands-on nature of home health aide services, the use of
telecommunications technology would generally not be appropriate for
such services. We reminded interested parties that if there is a
service that cannot be provided through telecommunications technology
(for example, wound care that requires in-person, hands-on care from a
skilled nurse), the HHA must make an in-person visit to furnish such
services (85 FR 39428). We also requested comments regarding the
appropriateness of such technology for particular services in order to
more clearly delineate when the use of such technology is appropriate.
This may help inform how we use this analysis, for instance, connecting
how such technology is impacting the provision of care to certain
beneficiaries, costs, quality, and outcomes, and determine if further
requirements surrounding the use of telecommunications technology are
needed.
We also solicited comments on future refinement of these G-codes
beginning July 1, 2023. Specifically, whether the codes should
differentiate the type of clinician performing the service via
telecommunications technology, such as a therapist versus therapist
assistant; and whether new G-codes should differentiate the type of
service being performed through the use of telecommunications
technology, such as: skilled nursing services performed for care plan
oversight (for example, management and evaluation or observation and
assessment) versus teaching; or physical therapy services performed for
the establishment or performance of a maintenance program versus other
restorative physical therapy services.
We will issue program instruction outlining the use of new codes
for the purposes of tracking the use of telecommunications technology
under the home health benefit with sufficient notice to enable HHAs to
make the necessary changes in their electronic health records and
billing systems. As stated previously, we will begin collecting this
information on home health claims by January 1, 2023, on a voluntary
basis by HHAs, and will require this information be reported on home
health claims beginning in July 2023. We would issue further program
instruction prior to July 1, 2023, if the G-code description changes
between January 1, 2023, and July 1, 2023, based on comments from the
CY 2023 HH PPS
[[Page 66859]]
proposed rule. However, we reiterate that the collection of information
on the use of telecommunications technology does not mean that such
services are considered ``visits'' for purposes of eligibility or
payment. In accordance with section 1895(e)(1)(A) and (B) of the Act,
such data will not be used or factored into case-mix weights, or count
towards outlier payments or the LUPA threshold per payment period.
Comment: We received approximately 44 comments on the discussion
regarding the collection of telehealth data on home health claims. The
majority of commenters agreed that the collection and analysis of data
on the use of telecommunications technology on home health claims will
greatly assist with accurate cost reporting. A few commenters stated
they are already collecting this data, are ready to share with CMS and
are willing to confer with CMS on downstream analysis of virtual care
delivery integration. Several commenters strongly suggested that while
CMS should continue to support innovation in telehealth (particularly
in rural areas of the country where workforce and geographic
considerations limit the number of in-home visits that may be
possible), we should also remain cognizant that given the rurality of
some regions, robust broadband, electronic devices and even cellular
networks are not available in some patient service areas. Still, most
commenters acknowledged that integration of telecommunications
technology under the home health benefit during the COVID-19 PHE has
proven to decrease ED visits, inpatient hospitalizations, and total
cost of care for comorbid high-risk populations; therefore, access to
digital and audio communication is critical for providing patients and
families, education, guidance and reassurance needed to avoid use of
emergency services and hospitals. We received a few comments on states
adopting increased scopes of practice for home health aides that could
allow them to utilize telecommunications technology, and suggestions
that there may be exceptions to when a home health aide might use
telecommunications technology to improve patient outcomes and reduce
potential avoidable hospitalizations or ED visits. These exceptions
could include responding to a question or urgent need of a care
recipient or their family caregiver, monitoring a patient remotely for
adverse reactions after a visit or playing a critical role in
connecting the patient to a specialist via telemedicine. However, most
commenters agreed that use of telecommunications technology by home
health aides should be rare, as they are generally providing hands-on
care. We received comments requesting that CMS provide information and
training to ensure that providers are prepared to report the requested
data accurately when mandatory reporting begins. Specifically,
commenters stated that CMS needs to be clear on differentiating between
telecommunications technology, telehealth services, communication
technology-based services (for example, virtual check-ins, e-visits),
and clarify the types of remote patient monitoring that will be
allowable under the new G-Codes to ensure that remote patient
monitoring is adding to the value of care and not simply tracking steps
from a wearable product like a smart watch. Several commenters urged
CMS to develop a list of services and care that are appropriate for
telehealth and those that should not be provided via virtual care and
suggested that telehealth does not translate well to, and may in fact
cause patient harm, services related to wound care, physical/
occupational/speech therapy, and when patients have sensory impairments
with hearing or vision. Conversely, commenters strongly supported that
telehealth services may translate well for patients in need of chronic
disease management, post-surgical care, mental health and isolation
checks, medication management, and those patients with the inability to
accurately collect and communicate health-related data, etc. The
majority of commenters supported the development of a mechanism to
refine the collection of visit details for the type of clinician and
service provided. However, while some commenters supported the
implementation of three new G-codes to report telecommunications
technology on home health claims, several commenters stated that new G-
codes are not needed. Instead, these commenters suggested it would be
less cumbersome to use appended modifiers for existing G-codes to
identify each type of telecommunications technology by clinician and
service provided, as the creation of multiple G-codes may lead to
confusion and result in inappropriate assignment of the G-codes on
claims. We received comments that support further analysis of the
collected data on the use of telecommunications technology as it
relates to beneficiary characteristics and utilization patterns,
including information related to those beneficiaries who cannot use
telecommunications technology because of technological limitations or
other factors. Further information such as geographic, racial, ethnic,
socioeconomic, sex, and gender identify identifiers, could be collected
to identify whether disparities in telehealth usage vary in diverse
populations. Further, several commenters stated that CMS' analysis
should include surveys of Medicare beneficiaries using home health
services and their family caregivers (as appropriate) and the study of
beneficiary appeals as they relate to services furnished via
telecommunications technology should also be considered as part of this
assessment.
Response: CMS appreciates all of the comments and suggestions
received regarding the collection of data on the use of
telecommunications technology on home health claims. We also
acknowledge commenter statements and concerns as they relate to the
availability of technology and broadband in some regions of the
country. While CMS maintains that the use of telecommunications
technology would generally not be appropriate for home health aide
services, at this time, we will not limit the use of these G-codes to
any particular discipline.
However, we would like to remind commenters that if a service
requires in-person, hands-on care from a skilled nurse or other
provider, an in-person visit must be made by the HHA to furnish such
services (85 FR 39428). We readily recognize and support the on-going
integration of telecommunications technology under the home health
benefit within the confines of the statute, and anticipate that the
collection of data related to the furnishing of these services will
increase our knowledge of how HHAs and beneficiaries benefit from its
use. As noted previously, the primary goal of collecting the data on
use of telecommunication technology under the home health benefit is to
allow CMS to analyze the characteristics of the beneficiaries utilizing
services furnished remotely, so that we have a broader understanding of
the social determinants that affect who benefits most from these
services, and what barriers may potentially exist for certain subsets
of beneficiaries. Moreover, we appreciate the additional suggestions
for analyzing the collected data on the use of telecommunication
technology under the home health benefit in a more granular manner; we
will consider these suggestions to help us connect how such technology
is impacting the provision of care to certain beneficiaries, costs,
quality, and outcomes, and determine if further
[[Page 66860]]
requirements surrounding the use of telecommunications technology are
needed. As stated previously, program instruction will be issued
outlining the use of new codes for the purposes of tracking the use of
telecommunications technology under the home health benefit with
sufficient notice to enable HHAs to make the necessary changes in their
electronic health records and billing systems. Additionally, although
we plan to begin collecting this data on home health claims by January
1, 2023, it will initially be collected on a voluntary basis by HHAs.
Further program instruction on the voluntary reporting (beginning in
January 2023) and required reporting (requirement will be effectuated
in July 2023) will be issued in January 2023.
III. Home Health Quality Reporting Program (HH QRP)
A. Background and Statutory Authority
The HH QRP is authorized by section 1895(b)(3)(B)(v) of the Act.
Section 1895(b)(3)(B)(v)(II) of the Act requires that, for 2007 and
subsequent years, each home health agency (HHA) submit to the Secretary
in a form and manner, and at a time, specified by the Secretary, such
data that the Secretary determines are appropriate for the measurement
of health care quality. To the extent that an HHA does not submit data
in accordance with this clause, the Secretary shall reduce the home
health market basket percentage increase applicable to the HHA for such
year by 2 percentage points. As provided at section 1895(b)(3)(B)(vi)
of the Act, depending on the market basket percentage increase
applicable for a particular year, as further reduced by the
productivity adjustment (except in 2018 and 2020) described in section
1886(b)(3)(B)(xi)(II) of the Act, the reduction of that increase by 2
percentage points for failure to comply with the requirements of the HH
QRP may result in the home health market basket percentage increase
being less than 0.0 percent for a year, and may result in payment rates
under the Home Health PPS for a year being less than payment rates for
the preceding year. The HH QRP regulations can be found at 42 CFR
484.245 and 484.250.
B. General Considerations Used for the Selection of Quality Measures
for the HH QRP
For a detailed discussion of the considerations we historically use
for measure selection for the HH QRP quality, resource use, and other
measures, we refer readers to the CY 2016 HH PPS final rule (80 FR
68695 through 68696). In the CY 2019 HH PPS final rule with comment
period (83 FR 56548 through 56550) we finalized the factors we consider
for removing previously adopted HH QRP measures.
C. Quality Measures Currently Adopted for the CY 2023 HH QRP
The HH QRP currently includes 20 measures for the CY 2023 program
year, as described in Table C1.
BILLING CODE 4120-01-P
Table C1--Measures Currently Adopted for the CY 2023 HH QRP
[[Page 66861]]
[GRAPHIC] [TIFF OMITTED] TR04NO22.043
[[Page 66862]]
BILLING CODE 4120-01-C
D. End of the Suspension of OASIS Data Collection on Non-Medicare/Non-
Medicaid HHA Patients and Requirement for HHAs To Submit All-Payer
OASIS Data for Purposes of the HH QRP, Beginning With the CY 2027
Program Year
In the CY 2023 HH PPS proposed rule, we noted for background that
in 1987, Congress added a new section 1891(d) to the Act (section
4021(b) of Pub. L. 100-203 (December 22, 1987)). The statute required
the Secretary to develop a comprehensive assessment for Medicare-
participating HHAs. In 1993, CMS (then known as HCFA) developed an
assessment instrument that identified each patient's need for home care
and the patient's medical, nursing, rehabilitative, social and
discharge planning needs. As part of this assessment, Medicare-
certified HHAs were required to use a standard core assessment data
set, the ``Outcome and Assessment Information Set'' (``OASIS'').
Section 1891(d) of the Act requires, as part of the home health
assessment, a survey of the quality of care and services furnished by
the agency as measured by indicators of medical, nursing, and
rehabilitative care provided by the HHA. OASIS is the designated
assessment instrument for use by an HHA in complying with the
requirement. In the January 25,1999 final rule titled, ``Medicare and
Medicaid Programs: Comprehensive Assessment and Use of the OASIS as
Part of the Conditions of Participation for Home Health Agencies,'' we
also required HHAs to submit the data collected by the OASIS assessment
to HCFA as an HHA condition of participation (64 FR 3772).
Early on, privacy concerns were raised by HHAs around the
collection of all-payer data and the release of personal health
information. As we indicated in the study, any new collection
requirements such as this typically raise concerns and OASIS was no
exception. In response to the privacy concerns, CMS took steps to mask
the personal health information before the data was transmitted to the
Quality Improvement and Evaluation System (QIES). In the study, we
collected information from HHAs and the industry including the
surveying of Agencies by one of the trade organizations and note that
the privacy concerns initially raised were not raised as an ongoing
concern. Based upon this feedback, we conclude that the privacy issues
raised initially are no longer a concern.
Subsequently, Congress enacted section 704 of the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (MMA),
which suspended the legal authority of the Secretary to require HHAs to
report OASIS information on non-Medicare/non-Medicaid patients until at
least 2 months after the Secretary published final regulations on CMS's
collection and use of those data following the submission of a report
to Congress on the study required under section 704(c) of the MMA. This
study required the Secretary to examine the use of non-Medicare/non-
Medicaid OASIS data by large HHAs, including whether there were unique
benefits from the analysis of that information that CMS could not
obtain from other sources, and the value of collecting such data by
small HHAs versus the administrative burden of collection. In
conducting the study, the Secretary was also required to obtain
recommendations from quality assessment experts on the use of such
information and the necessity of HHAs collecting such information.\28\
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\28\ https://www.govinfo.gov/content/pkg/PLAW-108publ173/pdf/PLAW-108publ173.pdf.
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The Secretary conducted the study required under section 704 of the
MMA from 2004 to 2005 and submitted it to Congress in December 2006
https://www.cms.gov/files/document/cms-oasis-study-all-payer-data-submission-2006.pdf. The study made the following key findings:
There are significant differences between private pay and
Medicare/Medicaid patients in terms of diagnosis, patient
characteristics, and patient outcomes. Within-agency correlation
between Medicare/Medicaid and private pay patient outcomes was low,
indicating that outcomes based on Medicare/Medicaid patient data cannot
be generalized to serve as a proxy for private pay patients.
Risk adjustment models at the time did not account for all
of the sources of variation in outcomes across different payer groups
and as a result, measures could produce misleading information.
Requiring OASIS data collection on private pay patients at
Medicare-certified HHAs could increase staff and patient burden and
would require CMS to develop a mechanism for these agencies to receive
reports from CMS on their private pay patients.
A change to all-payer assessment data collection would
strengthen CMS's ability to assess and report indicators of the quality
of care furnished by HHAs to their entire patient population.
After considering the study's findings, the Secretary noted that
the suspension of OASIS collection from non-M/non-Medicaid patients
would continue because ``it would be unfair to burden the providers
with the collection of OASIS at this time since the case mix and
outcomes reports are not designed to include private pay patients.''
The Secretary also noted that it would be inappropriate for CMS to
collect the private pay OASIS data and not use it. The Secretary
further stated that ``if funding for the development of HHA patient
outcome and case mix reports for private pay patients is identified as
a priority function, CMS would not hesitate to call for the removal of
the suspension of OASIS for private pay patients.''
In the November 9, 2006 final rule titled, ``Medicare Program; Home
Health Prospective Payment System Rate Update for Calendar Year 2007
and Deficit Reduction Act of 2005 Changes to Medicare Payment for
Oxygen Equipment and Capped Rental Durable Medical Equipment'' we
finalized our policy that the agency would continue to suspend
collection of OASIS all-payer data (71 FR 65883 and 65889).
Since 2006, CMS has laid the groundwork for the resumption of all-
payer data submission because we want to represent overall care being
provided to all patients in an HHA. CMS implemented the QIES and iQIES
provider data reporting systems to securely transfer and manage
assessment data across QRPs, including the HH QRP. These systems can
now support an extensive range of provider reports, including case-mix
reports for private pay patients. The HH QRP expanded quality domains
to include HH CAHPS and new assessment and claims-based quality
measures. We sought and received public comment on several occasions
regarding data reporting on all HHA patients, regardless of payer type.
In February 2012, the NQF-convened MAP also issued a report that
encouraged establishing a data collection and transmission
infrastructure for all payers that would work across PAC settings.\29\
In the July 28, 2017 and November 7, 2017 proposed and final rules
titled ``Home Health Prospective Payment System Rate Update and CY 2018
Case-Mix Adjustment Methodology Refinements; Home Health Value-Based
Purchasing Model; and
[[Page 66863]]
Home Health Quality Reporting Requirements'' (82 FR 35372 through 35373
and 82 FR 51736 through 51737, respectively) and in the July 18, 2019
and November 8, 2019 proposed and final rules titled, ``Medicare and
Medicaid Programs; CY 2020 Home Health Prospective Payment System Rate
Update'' (84 FR 34686 and 84 FR 60478, respectively), we sought and
responded to input on whether we should require quality data reporting
on all HHA patients, regardless of payer source, to ensure
representation of the quality of the services provided to the entire
HHA population. In the ``CY 2018 Home Health Prospective Payment System
Rate Update and CY 2019 Case-Mix Adjustment Methodology Refinements;
Home Health Value-Based Purchasing Model; and Home Health Quality
Reporting Requirements'' final rule, some commenters shared that there
would be increased burden from requiring all-payer data submissions. A
few commenters also raised the issue of whether it would be appropriate
to collect and report private pay data, given that private payers may
have different care pathways, approval, and authorization processes. In
the CY 2020 HH PPS proposed rule, we also sought input on whether
collection of quality data used in the HH QRP should include all HHA
patients, regardless of their payer source (84 FR 60478). Several
commenters supported expanding the HH QRP to include collection of data
on all patients regardless of payer. Several commenters noted that this
expanded data collection would not be overly burdensome because the
majority of HHAs already complete the OASIS on all patients, regardless
of payer status. Commenters were concerned that the usefulness of all-
payer data collection to CMS's health policy development would not
outweigh the additional reporting burden. Several commenters supporting
all-payer data collection stated that expansion of the data collection
would align the HH QRP's data collection policy with that of hospices
and long-term care hospitals (LTCHs), as well as the data collection
policy under the Merit-based Incentive Payment System. Other reasons
cited by commenters who supported the expanded data collection included
more accurate representation of the quality of care furnished by HHAs
to the entire HH population, the ability of such data to better guide
quality improvement activities, and the reduction of current
administrative efforts made by HHAs to ensure that only OASIS data for
Medicare and Medicaid patients are reported to CMS.
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\29\ National Quality Forum. MAP Coordination Strategy for Post-
Acute Care and Long-Term Care Performance Measurement. February
2012. Available at https://www.qualityforum.org/Publications/2012/02/MAP_Coordination_Strategy_for_Post-Acute_Care_and_Long-Term_Care_Performance_Measurement.aspx. Accessed March 21, 2022.
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In the CY 2023 HH PPS proposed rule, we stated our belief that
collecting OASIS data on all HHA patients, regardless of payer, would
align our data collection requirements under the HH QRP with the data
collection requirements for the LTCH QRP and Hospice QRP. We also
believe that the most accurate representation of the quality of care
furnished by HHAs is best captured by calculating the assessment-based
measures rates using OASIS data submitted on all HHA patients receiving
skilled care, regardless of payer. New risk adjustment models with all-
payer data would better represent the full spectrum of patients
receiving care in HHAs. The submission of all-payer OASIS data would
also enable us to meaningfully compare performance on quality measures
across PAC settings. For example, the Changes in Skin Integrity Post-
Acute Care quality measure is currently reported by different PAC
payers on different denominators of payer populations, which greatly
inhibits our ability to compare performance on this measure across PAC
settings. Standardizing the denominator for cross setting PAC measures
to include all skilled-care patients will enable us to make these
comparisons, which we believe will realize our goal of establishing
consistent measures of quality across PAC settings.
We stated in the CY 2023 HH PPS proposed rule that the concerns
raised surrounding privacy outlined previously have been mitigated. We
also stated that we take the privacy and security of individually
identifiable health information of all patients very seriously. CMS
data systems conform to all applicable federal laws, regulations and
standards on information security and data privacy. The systems limit
data access to authorized users and monitor such users to help protect
against unauthorized data access or disclosures. CMS anticipates
updating the current provider data reporting system in iQIES to address
the addition of private payer patients.
For these reasons, we proposed in the CY 2023 HH PPS proposed rule
to end the suspension of non-Medicare/non-Medicaid OASIS data
collection and to require HHAs to submit all-payer OASIS data for
purposes of the HH QRP beginning with the CY 2025 HH QRP program year.
We would use the OASIS data to calculate all measures for which OASIS
is a data source. Although the 2006 report recommended that the
suspension continue, the subsequent passage of the IMPACT Act (Pub. L.
113-185) in 2014, requiring us to create a uniform quality measurement
system which would allow us to compare outcomes across post-acute care
providers, requires us to revisit the policy. We have established such
a uniform quality measurement system, based on standardized patient
assessment data leading us to propose OASIS data collection on non-
Medicare/non-Medicaid patients. There are now cross-setting quality
measures in place that should have consistent reporting parameters but
currently do not have consistent reporting parameters because they
currently have only Medicare and Medicaid populations. The goal of CMS
is to have these measures reported for all patients for all payer
sources. The iQIES system utilized by providers is robust enough to
make feasible the generation of outcome and case mix reports for
private pay patients, whereas the 2006 QIES system lacked this
functionality. The HH QRP also has a more robust measure set, including
patient reported outcomes, a criteria of importance for CMS to move
forward with all-payer collection. We stated in the CY 2023 HH PPS
proposed rule that the maturation of the HH QRP as described previously
argues for the collection of OASIS all-payer data. It will improve the
HH QRP's ability to assess HHA quality and allow the HH QRP to foster
better quality care for patients, regardless of payer source. It will
also support CMS's ability to compare standardized outcome measures
across PAC settings.
Consistent with the two-quarter phase-in that we typically use when
adopting new reporting requirements for the HHAs, we proposed that for
the CY 2025 HH QRP, the expanded reporting would be required for
patients discharged between January 1, 2024 and June 30, 2024. After
consideration of the comments on this proposal, we are finalizing that
the new OASIS data reporting will be required beginning with the CY
2027 program year, with data for that program year required for
patients discharged between July 1, 2025 and June 30, 2026. Consistent
with the two-quarter phase-in that we typically use, HHAs will have an
opportunity to begin submitting this data for patients discharged
between January 1, 2025 through June 30, 2025, but we will not use that
data to make a compliance determination. Beginning with the CY 2027
program year, HHAs will be required to report OASIS data on all
patients, regardless of payer, for the applicable 12-month performance
period (which for the CY 2027 program year, would be patients
discharged between July 1, 2025 and June 30, 2026).
We stated in the CY 2023 HH PPS proposed rule that while we
appreciate
[[Page 66864]]
that submitting OASIS data on all HHA patients regardless of payer
source may create additional burden for HHAs, we note that the current
practice of separating and submitting OASIS data on only Medicare
beneficiaries has clinical and workflow implications with an associated
burden. As noted previously, we also understand that it is common
practice for HHAs to collect OASIS data on all patients, regardless of
payer source. Requiring HHAs to report OASIS data on all patients will
provide CMS with the most robust, accurate reflection of the quality of
care delivered to Medicare beneficiaries as compared with non-Medicare
patients.
We solicited comments on this proposal. The following is a summary
of the public comments received and our responses.
Comment: Several commenters supported the proposal to require
quality data collection for all patients receiving skilled care from
HHAs, regardless of payer source. Commenters agreed with the CMS'
conclusion that this proposal would help standardize data across PAC
settings. Supporters of the policy also noted that the implementation
of all-payer data collection would be critical in establishing health
equity standards, regardless of payment type for patients. Commenters
further agreed that CMS is in a strong position to address privacy
concerns regarding non-Medicare/non-Medicaid OASIS data collection and
that the infrastructure to support reporting non-Medicare/Medicaid data
has steadily improved.
Response: We appreciate the feedback and support for this proposal
to end the suspension of non-Medicare/non-Medicaid data collection and
to require HHAs to submit all-payer OASIS data for the HH QRP.
Comment: Some commenters supported the proposal to require quality
data reporting and collection for HHA patients with all payer sources,
but also suggested modifications for improvement. A few commenters
recommended delaying implementation of the policy until CY 2025 or at
least until a year after the close of the current public health
emergency. Others shared the need to specify any populations that
should be excluded from OASIS data collection, including pediatric and
maternal patients. A commenter supported the all-payer collection
proposal but stated that it should also be implemented for Home Health
Care Consumer Assessment of Healthcare Providers and Systems (HHCAHPS)
data. Some commenters supported the proposal but requested that CMS
increase payments to offset the burden of implementation of this
policy.
Response: We thank the commenters for their feedback. We believe
that requiring the collection of all-payer quality measure data for
which the data source is OASIS will further inform our quality work at
CMS by allowing us to gain a more complete picture of the quality of
care furnished at HHAs. We will take the commenter's suggestion to
expand our all-payer policy to the collection of HHCAHPS data into
consideration for future rulemaking. We have considered the concerns
raised by commenters on the burden of this new reporting requirement
and, in response to those comments, will delay this requirement until
the CY 2027 program year. Under the new implementation schedule, we are
finalizing, the new reporting requirement will be effective beginning
with the CY 2027 program year. For that program year, HHAs will be
required to submit all payer OASIS data for discharges from July 1,
2025 through and including June 30, 2026. We continue to believe that a
two-quarter phase-in period for this new reporting, along with the
current systems in place to collect OASIS data, will give HHAs enough
time to prepare to implement it. The two-quarter phase-in period is
consistent with the phase-in schedule that we typically adopt for all
new HH QRP reporting requirements. We appreciate feedback from
commenters about the need to specify any populations that should be
excluded from the new OASIS data collection. The policy would not
change the current patient exemptions for OASIS, which are as follows:
patients under the age of 18; patients receiving maternity services;
and patients receiving only personal care, housekeeping, or chore
services. With respect to the commenter's request that we increase
payment to HHAs to assist them financially in implementing this new
requirement, we do not have authority under section 1895(b)(3)(B)(v) of
the Act to provide bonuses or otherwise increase payment to HHAs that
comply with the requirements of the HH QRP.
Comment: Many commenters opposed this proposal. Additionally, some
commenters noted that CMS should not implement proposals that may add
burden while HHAs are still impacted by the ongoing public health
emergency (PHE). Other commenters questioned whether the benefits of
implementation would outweigh the cost of implementation, including
costs attributable to the burden associated with completing the new
reporting and the costs of HHA staffing. A few commenters opposed the
proposal and believe that CMS underestimated the burden both in terms
of time for completion and costs of HHA staffing.
Response: We acknowledge that HHAs may continue to be impacted by
the PHE and that collecting quality data on all patients regardless of
payer may create additional burden for some HHAs. However, there are
factors that limit the scope of the associated burden. For example,
Medicare certified HHAs already have processes in place to collect
OASIS data for Medicare/Medicaid patients which will limit the overall
financial impact of this new reporting requirement. Additionally, our
understanding is that many HHAs already collect all-payer OASIS data
for other purposes. We continue to believe that the benefits of
collecting data on patients regardless of payer source outweigh the
costs related to the resumption of collection and submission
requirements. Regarding concerns that we underestimated the national
impact of this proposal, we have utilized a consistent process used for
the estimate of burden in each HH Final rule for time spent and labor
costs associated with the implementation of OASIS E, the version of the
OASIS that would be used with the implementation of this proposal. This
process includes establishing an estimate for time required to submit
each assessment item on the OASIS for each time point in which the item
is collected, estimating the costs related to item submission based on
bureau of labor statistics HHA staff labor costs, and calculating an
overall estimate of burden based on the number of active HHAs. For
further details on burden calculations, please reference Section VI of
this final rule. We have properly estimated the burden being
established for this proposal in compliance with ongoing processes
established for regulatory impact.
Comment: Many commenters who opposed the proposal cited concerns
related to the burden of implementation implementing at a time when
HHAs are concerned about an overall reduction in payments by Medicare.
Response: We note that while there is a permanent adjustment to the
national, standardized 30-day payment rate in CY 2023 to account for
actual behavior change upon implementation of the PDGM, the overall
impact in CY 2023 is a net increase of 0.7% in home health payments.
Furthermore, we believe given that delaying the implementation of this
new reporting requirement until the CY 2027 program year will provide
HHAs with ample time to incorporate this policy into their business
operations.
[[Page 66865]]
Comment: Some commenters opposed the proposal and questioned CMS'
authority to require collection of patient data from all-payer sources.
Response: Congress enacted section 704 of the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003 (MMA), which
``suspended'' the legal authority of the Secretary to require HHAs to
report OASIS information on non-Medicare/non-Medicaid patients until at
least 2 months after the Secretary published final regulations on CMS's
collection and use of those data following the submission of a report
to Congress on the study required under section 704(c) of the MMA. We
have complied with the statutory requirements to end the suspension in
this published final regulation in submitting the aforementioned
report. We continue to believe that the collection of all payer OASIS
data will provide a more complete and accurate picture of the quality
of care furnished by HHAs. We also believe that the collection of all-
payer OASIS data will enable us to calculate measure rates in the HH
setting that can be more meaningfully compared with rates on those same
measures in the LTCH, IRF, and SNF settings.
Comment: Some commenters raised privacy concerns regarding non-
Medicare/non-Medicaid data collection and submission.
Response: We safeguard all OASIS data in a secure data system
(iQIES) that limits data access to authorized users and monitors such
users to ensure against unauthorized data access or disclosures. This
data system conforms to all applicable Federal laws and regulations, as
well as Federal government, HHS, and CMS policies and standards as they
relate to information security and data privacy.
Comment: Some commenters raised a concern that including non-
Medicare/non-Medicaid patients in the OASIS data collection would
significantly affect HHA outcome results because these patients could
have a different case-mix profile. Some commenters raised concerns
related to this issue especially for HHAs that have a high percentage
of non-Medicare/non-Medicaid patients whose requirements for care are
not mandated by CMS but by other payers. Some suggested that this
proposal could result in HHAs limiting their care to non-Medicare/non-
Medicaid patients to limit the potential impact on their HHA.
Response: We acknowledge that the collection of non-Medicare/non-
Medicaid OASIS data could change the measure results for HHAs. However,
we believe it is in the public's best interest, and more representative
of the quality of care provided by HHAs, to collect data on all HHA
patients. We believe that the collecting and reporting of the quality
data will in time improve quality for all patients regardless of payer
source. We intend to monitor and evaluate the impacts of this policy as
necessary and consider modifications, if warranted, through future
notice and comment rulemaking.
After consideration of the public comments we received, we are
finalizing the End of the Suspension of OASIS Data Collection on non-
Medicare/non-Medicaid HHA Patients and the Requirement for HHAs to
Submit All-Payer OASIS Data for Purposes of the HH QRP, Beginning with
the CY 2027 Program Year.
E. Technical Changes
We proposed to amend the regulation text in Sec. 484.245(b)(1) as
a technical change to consolidate the statutory references to data
submission to Sec. 484.245(b)(1)(i) and 484.245(b)(1)(ii). We also
proposed to modify Sec. 484.245(b)(1)(iii) to describe additional
requirements specific to HHCAHPS to make it clear that A through E only
apply to HHCAHPS.
In this technical change, we specifically proposed to move quality
data required under section 1895(b)(3)(B)(v)(II) from Sec.
484.245(b)(1)(iii) to Sec. 484.245(b)(1)(i).\30\ Specifically, the
proposed Sec. 484.245(b)(1)(i) would state, ``Data on measures
specified under sections 1895(b)(3)(B)(v)(II), 1899B(c)(1), and
1899B(d)(1) of the Act.'' The proposed Sec. 484.245(b)(1)(iii) would
state, ``For purposes of HHCAHPS survey data submission, the following
additional requirements apply:''.
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\30\ Section 1895(b)(3)(B)(v)(II) of the Act requires data
submission for HHCAHPS.
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We invited but did not receive public comments on this proposal. We
have modified Sec. 484.245(b)(1)(i) to clarify that HHAs must report
to CMS data--(1) that is required under section 1895(b)(3)(B)(v)(II) of
the Act, including HHCAHPS survey data; and (2) on measures specified
under sections 1899B(c)(1) and 1899B(d)(1) of the Act.
F. Codification of the HH QRP Measure Removal Factors
In the CY 2019 HH PPS final rule with comment period (83 FR 56548
through 56550), we adopted eight measure removal factors that we
consider when determining whether to remove measures from the HH QRP
measure set:
Factor 1. Measure performance among HHAs is so high and
unvarying that meaningful distinctions in improvements in performance
can no longer be made.
Factor 2. Performance or improvement on a measure does not
result in better patient outcomes.
Factor 3. A measure does not align with current clinical
guidelines or practice.
Factor 4. A more broadly applicable measure (across
settings, populations, or conditions) for the particular topic is
available.
Factor 5. A measure that is more proximal in time to
desired patient outcomes for the particular topic is available.
Factor 6. A measure that is more strongly associated with
desired patient outcomes for the particular topic is available.
Factor 7. Collection or public reporting of a measure
leads to negative unintended consequences other than patient harm.
Factor 8. The costs associated with a measure outweigh the
benefit of its continued use in the program.
To align the HH QRP with similar quality reporting programs (that
is SNF QRP, IRF QRP, and LTCH QRP) we proposed to amend 42 CFR 484.245
to add eight HH QRP measure removal factors in a new paragraph (b)(3).
We invited public comments on this proposal.
Comment: Most commenters expressed support for this proposal,
citing the importance of alignment across quality reporting programs
and the value of transparency in the process of measure removal and
additions from the HH QRP.
Response: We thank commenters for their support.
Comment: A few commenters supported this proposal and raised a few
additional considerations. A commenter noted that the expert panels
that provide input into measure additions or removals often lack
sufficient therapy staff participation. They encouraged CMS to increase
feedback from multiple disciplines in the process of considering
measure removals.
Response: These comments are outside the scope of this proposal to
amend 42 CFR 484.245.
Comment: A commenter generally supported this proposal but opposed
the inclusion of measure removal factor #8 because they believe this
removal factor will be misused by providers. They were concerned
providers would advocate removal of measures of value to the public
simply because they do not
[[Page 66866]]
want to collect the underlying assessment data required for the
calculation of the measure.
Response: This comment is outside the scope of this proposal to
amend 42 CFR 484.245.
After consideration of the public comments we received, we are
finalizing the proposal to codify the HH QRP measure removal factors.
G. Request for Information: Health Equity in the HH QRP
In the CY 2023 HH PPS proposed rule, we stated that CMS defines
health equity as the attainment of the highest level of health for all
people, where everyone has a fair and just opportunity to attain their
optimal health regardless of race, ethnicity, disability, sexual
orientation, gender identity, socioeconomic status, geography,
preferred language, or other factors that affect access to care and
health outcomes.\31\ We noted in the CY 2023 proposed rule that CMS is
working to advance health equity by designing, implementing, and
operationalizing policies and programs that support health for all the
people served by our programs, eliminating avoidable differences in
health outcomes experienced by people who are underserved, and
providing the care and support that our enrollees need to thrive.\32\
CMS' goals are in line with Executive Order 13985, on the Advancement
of Racial Equity and Support for the Underserved Communities, which can
be found at: https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
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\31\ https://www.cms.gov/pillar/health-equity.
\32\ CMS Framework for Health Equity 2022-2032.
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We outlined in the CY 2023 proposed rule that belonging to an
underserved community is often associated with worse health
outcomes.33 34 35 36 37 38 39 40 41 Such disparities in
health outcomes are the result of multiple factors. Although not the
sole determinants, poor access to care and provision of lower quality
health care are important contributors to health disparities notable
for CMS programs. Prior research has shown that home health agencies
serving higher proportions of Black and low-income older adults furnish
lower quality care than those with lower proportions of such
patients.\42\ It is unclear why this relationship exists, but some
evidence suggests that these outcomes are the result of reduced access
to home health agencies with the highest scores for quality and health
outcomes measures reported (subsequently referred to as high-quality
HHAs).\43\ Research in long term care access has shown that
neighborhoods with larger proportions of Black, Hispanic, and low-
income residents have lower access to a range of high-quality care
including hospitals, primary care physicians, nursing homes, and
community-based long-term services.44 45 46 A recent study
found that Black and Hispanic home health patients were less likely to
use high quality home health agencies than White patients who lived in
the same neighborhoods.\47\ This difference in use of high quality HHAs
persisted even after adjusting for patient health status, suggesting
disparity in access to higher-quality home health agency was present.
Disparities exist within neighborhoods, where Black, Hispanic, and
lower-income home health patients that live in a neighborhood with
higher-quality home health agencies still have less access to these
HHAs.\48\ Disparities also persist across neighborhoods where the
researchers found that 40-77 percent of disparities in high-quality
agency use was attributable to neighborhood-level factors.\49\ The
issue of disparity in access is especially critical to address
currently with the COVID-19 public health emergency (PHE). The PHE has
increased demand for home health services instead of nursing home care
for many patients seeking post-acute care.\50\ Factors outside of
neighborhood effects that could affect inequities in home health care
and access to care may include a provider's selection of patients with
higher socioeconomic status (SES) who are perceived to have a lower
likelihood of reducing provider quality ratings \51\ or a provider's
biased perception of a patient's risk behavior and adherence to care
plans.\52\ These findings suggest the need to address issues related to
care and access when striving to improve health equity.
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\33\ Joynt KE, Orav E, Jha AK. Thirty-Day Readmission Rates for
Medicare Beneficiaries by Race and Site of Care. JAMA. 2011;
305(7):675-681.
\34\ Lindenauer PK, Lagu T, Rothberg MB, et al. Income
Inequality and 30 Day Outcomes After Acute Myocardial Infarction,
Heart Failure, and Pneumonia: Retrospective Cohort Study. British
Medical Journal. 2013; 346.
\35\ Trivedi AN, Nsa W, Hausmann LRM, et al. Quality and Equity
of Care in U.S. Hospitals. New England Journal of Medicine. 2014;
371(24):2298- 2308.
\36\ Polyakova, M., et al. Racial Disparities In Excess All-
Cause Mortality During The Early COVID-19 Pandemic Varied
Substantially Across States. Health Affairs. 2021; 40(2): 307-316.
\37\ Rural Health Research Gateway. Rural Communities: Age,
Income, and Health Status. Rural Health Research Recap. November
2018.
\38\ https://www.minorityhealth.hhs.gov/assets/PDF/Update_HHS_Disparities_Dept-FY2020.pdf.
\39\ www.cdc.gov/mmwr/volumes/70/wr/mm7005a1.htm.
\40\ Poteat TC, Reisner SL, Miller M, Wirtz AL. COVID-19
Vulnerability of Transgender Women With and Without HIV Infection in
the Eastern and Southern U.S. Preprint. medRxiv.
2020;2020.07.21.20159327. Published 2020 Jul 24. doi:10.1101/
2020.07.21.20159327.
\41\ Milkie Vu et al. Predictors of Delayed Healthcare Seeking
Among American Muslim Women, Journal of Women's Health 26(6) (2016)
at 58; S.B. Nadimpalli, et al., The Association between
Discrimination and the Health of Sikh Asian Indians Health Psychol.
2016 Apr; 35(4): 351-355.
\42\ Joynt Maddox KE, Chen LM, Zuckerman R, Epstein AM.
Association between race, neighborhood, and Medicaid enrollment and
outcomes in Medicare home health care. J Am Geriatr Soc.
2018;66(2):239-46.
\43\ Ibid.
\44\ Smith DB, Feng Z, Fennell ML, Zinn J, Mor V. Racial
disparities in access to long-term care: the illusive pursuit of
equity. J Health Polit Policy Law. 2008;33(5):861-81.
\45\ Gaskin DJ, Dinwiddie GY, Chan KS, McCleary R. Residential
segregation and disparities in health care services utilization. Med
Care Res Rev. 2012;69(2):158-75.
\46\ Rahman M, Foster AD. Racial segregation and quality of care
disparity in U.S. nursing homes. J Health Econ. 2015;39:1-16.
\47\ Fashaw-Walters, SA. Rahman, M., Gee, G. et al. Out Of
Reach: Inequities In The Use Of High-Quality Home Health Agencies.
Health Affairs 2022 41(2):247-255.
\48\ Ibid.
\49\ Fashaw-Walters, SA. Rahman, M., Gee, G. et al. Out Of
Reach: Inequities In The Use Of High-Quality Home Health Agencies.
Health Affairs 2022 41(2):247-255.
\50\ Werner RM, Bressman E. Trends in post-acute care
utilization during the COVID-19 pandemic. J Am Med Dir Assoc.
2021;22(12):2496-9.
\51\ Werner RM, Asch DA. The unintended consequences of publicly
reporting quality information. JAMA. 2005;293(10):1239-44.
\52\ Davitt JK, Bourjolly J, Frasso R. Understanding inequities
in home health care outcomes: staff views on agency and system
factors. Res Gerontol Nurs. 2015;8(3):119-29.
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We are committed to achieving equity in health care outcomes for
beneficiaries by supporting providers in quality improvement activities
to reduce health disparities, enabling beneficiaries to make more
informed decisions, and promoting provider accountability for health
care disparities.53 54 CMS is committed to closing the
equity gap in CMS quality programs.
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\53\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
\54\ Report to Congress: Improving Medicare PostAcute Care
Transformation (IMPACT) Act of 2014 Strategic Plan for Accessing
Race and Ethnicity Data. January 5, 2017. Available at https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Research-Reports-2017-Report-to-Congress-IMPACT-ACT-of-2014.pdf.
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We thank commenters for their previous input to our request for
information on closing the health equity gap in home health care in the
CY 2022 HH PPS final rule (86 FR 62240). Many commenters shared that
relevant data collection and appropriate stratification
[[Page 66867]]
are very important in addressing any health equity gaps. These
commenters noted that CMS should consider potential stratification of
health outcomes. Stakeholders, including providers, also shared their
strategies for addressing health disparities, noting that this was an
important commitment for many health provider organizations. Commenters
also shared recommendations for additional social determinants of
health (SDOH) data elements that could strengthen their assessment of
disparities and issues of health equity. SDOH are the conditions in the
environments where people are born, live, learn, work, play, worship,
and age that affect a wide range of health, functioning, and quality-
of-life outcomes and risks.\55\ Many commenters suggested capturing
information related to food insecurity, income, education,
transportation, and housing. We will continue to take all comments and
suggestions into account as we work to develop policies on this
important topic. We appreciate home health agencies and other
stakeholders sharing their support and commitment to addressing health
disparities and offering meaningful comments for consideration. As we
continue to consider health equity within the HH QRP, we solicited
public comment in the CY 2023 HH PPS proposed rule on the following
questions:
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\55\ Healthy People 2030, U.S. Department of Health and Human
Services, Office of Disease Prevention and Health Promotion.
Retrieved 06/09/22.
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What efforts does your HHA employ to recruit staff,
volunteers, and board members from diverse populations to represent and
serve underserved populations? How does your HHA attempt to bridge any
cultural gaps between your personnel and beneficiaries/clients? How
does your HHA measure whether this has an impact on health equity?
How does your HHA currently identify barriers to access to
care in your community or service area?
What are the barriers to collecting data related to
disparities, SDOH, and equity? What steps does your HHA take to address
these barriers?
How does your HHA collect self-reported demographic
information such as information on race and ethnicity, disability,
sexual orientation, gender identity, veteran status, socioeconomic
status, and language preference?
How is your HHA using collected information such as
housing, food security, access to interpreter services, caregiving
status, and marital status to inform its health equity initiatives?
In addition, we stated in the CY 2023 HH PPS proposed rule that we
were considering the adoption of a structural composite measure for the
HH QRP, which could include organizational activities to address access
to and quality of home health care for underserved populations. The
composite structural measure concept could include HHA reported data on
HHA activities to address underserved populations' access to home
health care. An HHA could receive a point (for a total of three points
for the three domains) for each domain where data are submitted to a
CMS portal, regardless of the action in that domain.
HHAs could submit information such as documentation, examples, or
narratives to qualify for the measure numerator. The domains under
consideration for the measure, as well as how an HHA could satisfy each
of those domains and earn a point for that domain, are the following:
Domain 1: HHAs' commitment to reducing disparities is strengthened
when equity is a key organizational priority. Candidate domain 1 could
be satisfied if an HHA submits data on actions it is taking with
respect to health equity and community engagement in their strategic
plan. HHAs could report data in the reporting year about their actions
in each of the following areas, and submission of data for all elements
could be required to qualify for the measure numerator.
HHAs attest to whether their strategic plan includes
approaches to address health equity in the reporting year.
HHAs report community engagement and key stakeholder
activities in the reporting year.
HHAs report on any attempts to measure input they solicit
from patients and caregivers about care disparities they may experience
as well as recommendations or suggestions for improvement.
Domain 2: Training HHA board members, HHA leaders, and other HHA
staff in culturally and linguistically appropriate services (CLAS),\56\
health equity, and implicit bias is an important step the HHA can take
to provide quality care to underserved populations. Candidate domain 2
could focus on HHAs' diversity, equity, inclusion training for board
members and staff by capturing the following reported actions in the
reporting year. Submission of relevant data for all elements could be
required to qualify for the measure numerator.
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\56\ https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/CLAS-Toolkit-12-7-16.pdf.
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HHAs attest as to whether their employed staff were
trained in culturally sensitive care mindful of (SDOH in the reporting
year and report data relevant to this training, such as documentation
of specific training programs or training requirements.
HHAs attest as to whether they provided resources to staff
about health equity, SDOH, and equity initiatives in the reporting year
and report data such as the materials provided or other documentation
of the learning opportunities.
Domain 3: HHA leaders and staff can improve their capacity to
address health disparities by demonstrating routine and thorough
attention to equity and setting an organizational culture of equity.
This candidate domain could capture activities related to
organizational inclusion initiatives and capacity to promote health
equity. Examples of equity-focused factors include proficiency in
languages other than English, experience working with diverse
populations in the service area, and experience working with
individuals with disabilities. Submission of relevant data for all
elements could be required to qualify for the measure numerator.
HHAs attest as to whether they considered equity-focused
factors in the hiring of HHA senior leadership, including chief
executives and board of trustees, in the applicable reporting year.
HHAs attest as to whether equity-focused factors were
included in the hiring of direct patient care staff (for example,
therapists, nurses, social workers, physicians, or aides) in the
applicable reporting year.
HHAs attest as to whether equity focused factors were
included in the hiring of indirect care or support staff (for example,
administrative, clerical, or human resources) in the applicable
reporting year.
We also stated in the CY 2023 HH PPS proposed rule that we[?] are
interested in developing health equity measures based on information
collected by HHAs not currently available on claims, assessments, or
other publicly available data sources to support development of future
quality measures. We solicited public comment on the conceptual domains
and quality measures described in this section. Furthermore, we
solicited public comment on publicly reporting a composite structural
health equity quality measure; displaying descriptive information on
Care Compare from the data HHAs provide to support health equity
[[Page 66868]]
measures; and the impact of the domains and quality measure concepts on
organizational culture change.
The following is a summary of the comments we received in response
to this RFI:
Commenters broadly applauded CMS for seeking to address health
equity in home health. Many noted that health equity is critical to
address in home health and requires attention from CMS and providers.
Many commenters representing organizations outlined some work they were
engaged in to address health equity. Many commenters provided specific
feedback on components of the quality measure concept along with broad-
based feedback. Commenters suggested using a scale relative to
responses in the measure concept rather than a yes/no approach. Some
commenters noted that it would be critical to solicit direct input from
HH patients on health equity issues in addition to soliciting that
input from HHAs. Others shared that it is critical that CMS provide
HHAs with a range of ways to address health equity needs that would be
unique to the populations they serve. Others suggested different issues
that could be addressed with health equity measures, such as premature
discharge, counteracting the impacts of HHAs coverage relative to the
area deprivation index, and considerations of how disability is
addressed when assessing health equity. A number of commenters shared
their support for CMS pursuing other ways to aid HHAs in understanding
health equity issues that may exist by providing stratified data to
providers.
Some commenters did not support the health equity quality measure
because it would be compelling HHAs to improperly adopt CMS' approach
to organizational culture changes. Other commenters shared concerns
that a major issue related to health equity in home health is access to
home health benefits and that CMS does not have a sufficiently robust
approach to address scenarios in which access to home health is denied.
Some commenters raised concerns that the health equity quality measure
would add burden to the workload of HHAs and suggested that CMS utilize
data currently available to address disparities and other health equity
concerns. Other commenters addressed more broad-based issues related to
health equity. Others suggested CMS provide funding to address health
equity issues and additionally consider supporting trainings for
providers. Multiple commenters recommended using the terms ``health
related social needs'' for individual health equity factors and
``social determinants of health'' for community health equity factors.
Commenters raised the need to address issues such as expanding gender
categorizations and updating race categories for some groupings.
We appreciate the comments we received on this RFI. Public input is
very valuable for the continuing development of CMS' health equity
quality measurement efforts and our broader commitment to health
equity; a key pillar of our strategic vision as further described here,
https://www.cms.gov/files/document/health-equity-fact-sheet.pdf. We
will take these comments into consideration in our future policy
development.
G. Advancing Health Information Exchange
We are removing this section and note that it was erroneously
included in this section of the CY 2023 HH PPS proposed rule. We also
note that this section of the proposed rule was duplicative of section
I.B. of the proposed rule.
IV. Expanded Home Health Value-Based Purchasing (HHVBP) Model
A. Background
As authorized by section 1115A of the Act and finalized in the CY
2016 HH PPS final rule (80 FR 68624), the Center for Medicare and
Medicaid Innovation (Innovation Center) implemented the Home Health
Value-Based Purchasing (HHVBP) Model (``original Model'') in nine
states on January 1, 2016. The design of the original HHVBP Model
leveraged the successes and lessons learned from other CMS value-based
purchasing programs and demonstrations to shift from volume-based
payments to a model designed to promote the delivery of higher quality
care to Medicare beneficiaries. The specific goals of the original
HHVBP Model were to--
Provide incentives for better quality care with greater
efficiency;
Study new potential quality and efficiency measures for
appropriateness in the home health setting; and
Enhance the current public reporting process.
The original HHVBP Model resulted in an average 4.6 percent
improvement in HHAs' total performance scores (TPS) and an average
annual savings of $141 million to Medicare without evidence of adverse
risks.\57\ The evaluation of the original model also found reductions
in unplanned acute care hospitalizations and skilled nursing facility
(SNF) stays, resulting in reductions in inpatient and SNF spending. The
U.S. Secretary of Health and Human Services determined that expansion
of the original HHVBP Model would further reduce Medicare spending and
improve the quality of care. In October 2020, the CMS Chief Actuary
certified that expansion of the HHVBP Model would produce Medicare
savings if expanded to all states.\58\
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\57\ https://innovation.cms.gov/data-and-reports/2020/hhvbp-thirdann-rpt.
\58\ https://www.cms.gov/files/document/certificationhome-health-value-based-purchasing-hhvbpmodel.pdf.
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On January 8, 2021, CMS announced the certification of the HHVBP
Model for expansion nationwide, as well as the intent to expand the
Model through notice and comment rulemaking.\59\
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\59\ https://www.cms.gov/newsroom/press-releases/cms-takes-action-improve-home-health-care-seniors-announces-intent-expand-home-health-value-based.
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In the CY 2022 HH PPS final rule (86 FR 62292 through 62336) and
codified at 42 CFR part 484 subpart F, we finalized the decision to
expand the HHVBP Model to all Medicare certified HHAs in the 50 States,
territories, and District of Columbia beginning January 1, 2022. We
finalized that the expanded Model will generally use benchmarks,
achievement thresholds, and improvement thresholds based on CY 2019
data to assess achievement or improvement of HHA performance on
applicable quality measures and that HHAs will compete nationally in
their applicable size cohort, smaller-volume HHAs or larger-volume
HHAs, as defined by the number of complete unique beneficiary episodes
for each HHA in the year prior to the performance year. All HHAs
certified to participate in the Medicare program prior to January 1,
2022, will be required to participate and will be eligible to receive
an annual Total Performance Score based on their CY 2023 performance.
We finalized the quality measure set for the expanded Model, as
well as policies related to the removal, modification, and suspension
of applicable measures, and the addition of new measures and the form,
manner and timing of the OASIS-based, Home Health Consumer Assessment
of Healthcare Providers and Systems (HHCAHPS) survey-based, and claims-
based measures submission in the applicable measure set beginning CY
2022 and subsequent years. We also finalized an appeals process, an
extraordinary circumstances exception policy, and public reporting of
annual performance data under the expanded Model.
[[Page 66869]]
Additionally in the CY 2022 HH PPS proposed rule (86 FR 35929), we
solicited comments on the challenges unique to value-based purchasing
frameworks in terms of health equity and ways in which we could
incorporate health equity goals into the expanded HHVBP Model. We
received comments related to the use of stabilization measures to
promote access to care for individuals with chronic illness or limited
ability to improve; collection of patient level demographic information
for existing measures; and stratification of outcome measures by
various patient populations to determine how they are affected by
social determinants of health (SDOH). In the CY 2022 HH PPS final rule
(86 FR 62312), we summarized and responded to these comments received.
In the CY 2023 HH PPS proposed rule (87 FR 37667 through 37671), we
proposed to replace the term baseline year with the terms HHA baseline
year and Model baseline year and to change the calendar years
associated with each of those baseline years, and solicited comment on
future approaches to health equity in the expanded HHVBP Model.
B. Changes to the Baseline Years and New Definitions
1. Definitions
a. Background
Benchmarks, achievement thresholds, and improvement thresholds are
used to assess achievement or improvement of HHA performance on
applicable quality measures. As codified at Sec. 484.345, baseline
year means the year against which measure performance in a performance
year will be compared. As discussed in the CY 2022 HH PPS final rule
(86 FR 62300), we finalized our proposal to use CY 2019 (January 1,
2019 through December 31, 2019) as the baseline year for the expanded
HHVBP Model. In that rule, we also codified at Sec. 484.350(b), that
for a new HHA that is certified by Medicare on or after January 1,
2019, the baseline year is the first full calendar year of services
beginning after the date of Medicare certification, with the exception
of HHAs certified on January 1, 2019 through December 31, 2019, for
which the baseline year is CY 2021, and the first performance year is
the first full calendar year (beginning with CY 2023) following the
baseline year.
b. Amended Definitions
Since that final rule, it has come to our attention that there
could be some confusion and we would like to explain our terminology
more clearly by differentiating between two types of baseline years
used in the expanded HHVBP Model. The Model baseline year is used to
determine the benchmark and achievement threshold for each measure for
all HHAs. For example, as finalized, CY 2019 data is used in the
calculation of the achievement thresholds and benchmarks for all
applicable measures for both the small cohort and for the large cohort.
The HHA baseline year is used to determine the HHA improvement
threshold for each measure for each individual competing HHA. For
example, if an HHA is certified in CY 2021, CY 2022 data would be used
in the calculation of the improvement thresholds for all applicable
measures for that HHA.
Therefore, we proposed to amend Sec. 484.345 to remove the
existing baseline year definition: means the year against which measure
performance in a performance year will be compared. In its place, we
proposed to define: (1) HHA baseline year as the calendar year used to
determine the improvement threshold for each measure for each
individual competing HHA; and (2) Model baseline year as the calendar
year used to determine the benchmark and achievement threshold for each
measure for all competing HHAs. In line with these proposed
definitions, we proposed to make conforming revisions to the
definitions of achievement threshold and benchmark to indicate that
they are calculated using the Model baseline year, and the definition
of improvement threshold to indicate that it is calculated using the
HHA baseline year. Additionally, we proposed to amend paragraph (a) of
Sec. 484.370 to remove the phrase ``for the baseline year'' because
the calculation of the TPS using the applicable benchmarks and
achievement thresholds (determined using the Model baseline year) and
improvement thresholds (determined using the HHA baseline year) is
described at Sec. 484.360.
We invited public comments on these proposals.
Comment: A few commenters supported the proposed addition of the
definitions of HHA baseline year and Model baseline year, and the
associated proposal to modify the definitions of achievement threshold
and benchmark.
Response: We appreciate the commenters' support for these
provisions.
We did not receive comments on the proposed amendments to Sec.
484.360 or to paragraph (a) of Sec. 484.370. After consideration of
the public comments received, we are finalizing the provisions at Sec.
484.345, Sec. 484.360, and Sec. 484.370 without modification.
2. Change of HHA Baseline Years
a. Background--New and Existing HHAs Baseline Years
As previously discussed, in the CY 2022 HH PPS final rule (86 FR
62300), we finalized our proposal to use CY 2019 as the baseline year
for the expanded HHVBP Model. Our intent was that the Model baseline
year used to determine achievement thresholds and benchmarks is CY 2019
for all HHAs and the HHA baseline year used to determine an individual
HHA's improvement threshold is 2019 for HHAs certified prior to January
1, 2019. As discussed in the section IV.B.1.b. of this rule, we
proposed to replace the term baseline year with the terms Model
baseline year and HHA baseline year to differentiate between two types
of baseline years used in the expanded HHVBP Model.
As mentioned earlier, in that same rule (86 FR 62423), we codified
at Sec. 484.350(b), that for a new HHA that is certified by Medicare
on or after January 1, 2019, the baseline year is the first full
calendar year of services beginning after the date of Medicare
certification, with the exception of HHAs certified on January 1, 2019
through December 31, 2019, for which the baseline year is CY 2021, and
the first performance year is the first full calendar year (beginning
with CY 2023) following the baseline year. Table D1 depicts what was
finalized in the CY 2022 HH PPS final rule.
Table D1--New and Existing HHAS Baseline Years as Finalized and
Illustrated in Table 23 of the CY 2022 HH PPS Final Rule (86 FR 62301)
[[Page 66870]]
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b. Change to the HHA Baseline Year for New and Existing HHAs
As discussed in the CY 2022 final rule, we stated that we may
conduct analyses of the impact of using various baseline periods and
consider any changes for future rulemaking (86 FR 62300). Due to the
continuing effects of the COVID-19 public health emergency (PHE), we
conducted a measure-by-measure comparison of performance for CY 2019 to
CY 2021 for the expanded HHVBP Model's measure set relative to the
historical trends of those measures. We found that, while performance
scores on the five applicable HHCAHPS measures and the OASIS-based
``Discharged to Community'' remained stable from CY 2019 to CY 2021,
there was a general trend upwards following historical trends for four
of the five applicable OASIS-based measures. These trends were
consistent with the historical national data that CMS used to monitor
the original HHVBP Model beginning 2015.
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In contrast, Figures D1 and D2 that were derived from the archived
HH quality data from CMS.data.gov \60\ illustrate the trend of average
national performance on the Acute Care Hospitalization During the First
60 Days of Home Health Use measure and the Emergency Department Use
without Hospitalization During the First 60 Days of Home Health measure
deviated significantly, with a drop of 9 percent and 15 percent in CY
2020, respectively, relative to CY 2019 (Table D2) and remained lower
in CY 2021 as compared to historic trends that occurred prior to the
pandemic. In the 5 years prior to 2020, both measures demonstrated
stable trends, varying +/- 5 percent from year to year, which
highlights the significance of the change from CY 2019 to CY 2020
compared to CY 2015 to CY 2019.
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\60\ Derived from data at https://data.cms.gov/provider-data/archived-data/home-health-services.
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Table D2--Average National Performance on Applicable Measures CY 2019-
CY 2021
[[Page 66872]]
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We note that for HHAs with sufficient data on each of the 12
applicable measures, performance on the two claims-based measures
(Acute Care Hospitalization During the First 60 Days of Home Health Use
and Emergency Department Use without Hospitalization During the First
60 Days of Home Health) makes up 35 percent of the total performance
score used to determine payment adjustments under the Model. While
average national performance on these measures in CY 2021 was similar
to average national performance in CY 2020, CY 2022 is the first year
where the vast majority of beneficiaries are vaccinated; as of January
27, 2022, 95 percent of Americans ages 65 years or older had received
at least one dose of vaccine and 88.3 percent were fully
vaccinated.\61\ In addition, there were viable treatments available and
healthcare providers had nearly 2 years of experience managing COVID-19
patients. We believe that more recent data from the CY 2022 time period
is more likely to be aligned with performance years' data under the
expanded Model, and provide a more appropriate baseline for assessing
HHA improvement for all measures under the Model as compared to both
the pre-PHE CY 2019 data, as previously finalized for existing HHAs,
and the CY 2021 data, as previously finalized for new HHAs certified
between January 1, 2019 and December 31, 2020. Use of CY 2022 data for
the HHA baseline year for all measures under the expanded Model would
also allow all HHAs certified by Medicare prior to CY 2022 to have the
same baseline period, based on the most recent available data,
beginning with the CY 2023 performance year. Accordingly, we proposed
to change the HHA baseline year for HHAs certified prior to January 1,
2019 and for HHAs certified during January 1, 2019-December 31, 2021
for all applicable measures used in the expanded Model, from CY 2019
and 2021 respectively, to CY 2022 beginning with the CY 2023
performance year. Additionally, we proposed that for any new HHA
certified on or after January 1, 2022, the HHA baseline year is the
first full calendar year of services beginning after the date of
Medicare certification and the first performance year is the first full
calendar year following the HHA baseline year.
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\61\ https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/past-reports/01282022.html.
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As discussed in the CY 2022 HH PPS final rule, we understand that
HHAs want to have time to examine their baseline data as soon as
possible, and we stated that we anticipated making available baseline
reports using the CY 2019 baseline year data in advance of the first
performance year under the expanded Model (CY 2023). If we were to
finalize this proposal to instead use CY 2022 data for the HHA baseline
year, we would intend to continue to make these baseline data available
as soon as administratively possible, and would anticipate providing
HHAs with their final individual improvement thresholds in the summer
of CY 2023. We note that this would be consistent with the original
HHVBP Model, for which improvement thresholds using CY 2015 data were
made available to HHAs in the first IPR in the summer of the first
performance year (CY 2016).
The proposed provision was made in conjunction with the proposed
addition of the definition of the term HHA baseline year discussed
previously. We believe that this proposed provision would allow all
eligible HHAs, starting with the CY 2023 performance year, to compete
on a level playing field with all HHA baseline data being after the
peak of the pandemic. Accordingly, we proposed to amend Sec.
484.350(b) to reflect that for a new HHA, specifically an HHA that is
certified by Medicare on or after January 1, 2022, the HHA baseline
year is the first full calendar year of services beginning after the
date of Medicare certification, and to add Sec. 484.350(c) to reflect
that for an existing HHA, specifically an HHA that is certified by
Medicare before January 1, 2022, the HHA baseline year is CY 2022.
Table D3 depicts these proposed provisions.
Table D3--Example: Proposed HHA Baseline Years, Performance Year and
Payment Year for HHAs Certified Through December 31, 2023
[[Page 66873]]
[GRAPHIC] [TIFF OMITTED] TR04NO22.048
In developing the proposal, we considered changing the HHA baseline
year to CY 2021 for all HHAs for all of the applicable measures or,
alternatively, not changing the HHA baseline year for any of the
applicable measures. We decided against those alternatives for the
reasons explained previously in support of our proposed change the HHA
baseline year to CY 2022. We also considered changing the HHA baseline
for only some of the applicable measures. For example, we considered
changing the HHA baseline to CY 2022 only for the claims-based measures
and using the HHA baseline of CY 2019 or CY 2021 (see Table D1) for
applicable HHAs for the OASIS-based and HHCAHPS-based measures.
However, for the reasons previously discussed, we proposed to change
the HHA baseline year to CY 2022 for all applicable measures used in
the expanded HHVBP Model, which would allow all HHAs certified by
Medicare prior to CY 2022 to have the same baseline period for all
measures, using the most recent available data, for the performance
year beginning CY 2023.
We invited public comments on these proposals.
Comment: A few commenters supported the proposal to establish the
HHA baseline year for HHAs certified by Medicare prior to CY 2022 to
have the same baseline period, CY 2022, for all measures, using the
most recent available data, for the performance year beginning CY 2023.
A commenter stated that they also observed variation in outcome
performance, and believes that utilization of CY 2019 as the HHA
baseline year would not be comparable to current agency performance or
outcome trends, as it preceded both the transition to PDGM as well as
the COVID-19 pandemic. Another commenter, encouraged CMS to expedite
the typical reporting cycle to provide preliminary HHA baseline
measures to each agency by the end of Q1 2023.
Response: We thank those who expressed support for this provision.
We believe most commenters that did not distinguish between HHA
baseline year and the Model baseline year were referring to the Model
baseline year because they often referenced the availability of
benchmarks and achievement thresholds, and those comments are included
in section IV.B.3 of this final rule. To help provide feedback to HHAs,
we plan to make the most current HHA-specific performance data for the
applicable measures available to each HHA in iQIES. We intend for this
to include current performance relative to other HHAs nationally as
soon as administratively possible and before the start of the CY 2023
performance year and again before the first IPR scheduled for July
2023.
After consideration of the public comments received, we are
finalizing our proposals without modification.
3. Change to the Model Baseline Year
As mentioned earlier, under the policy finalized in the CY 2022 HH
PPS final rule (86 FR 62300), we previously adopted CY 2019 as the
Model baseline year for the expanded HHVBP Model for all HHAs. This
baseline year is used to determine the benchmarks and achievement
threshold for each measure for all HHAs.
Consistent with our proposal to update the HHA baseline year to CY
2022 for all HHAs that are certified by Medicare before January 1,
2022, and in conjunction with our proposed change to more clearly
define the Model baseline year in section IV.B.1.b. of the proposed
rule, we also proposed to change the Model baseline year from CY 2019
to CY 2022 for the CY 2023 performance year and subsequent years. This
would enable us to measure competing HHAs' performance using benchmarks
and achievement thresholds that are based on the most recent data
available. This would also allow the benchmarks and achievement
thresholds to be set using data from after the most acute phase of the
COVID-19 PHE, which we believe would provide a more appropriate basis
for assessing performance under the expanded Model than the CY 2019
pre-PHE period. As previously discussed, CY 2022 is the first year
where the vast majority of beneficiaries are vaccinated, there are
viable treatments available and healthcare providers had nearly 2 years
of experience managing COVID-19 patients. We anticipate that this more
recent data from the CY 2022 time period would more likely be aligned
with performance years' data under the expanded Model. As discussed in
connection with our proposal to use CY 2022 data for the HHA baseline
year, if we were to finalize our proposal to use CY 2022 rather than CY
2019 data for the Model baseline year, we would anticipate providing
HHAs with the final achievement thresholds and benchmarks in the July
2023 IPR in the summer of CY 2023. This would be consistent with the
rollout of the original HHVBP Model in which benchmarks and achievement
thresholds using 2015 data were made available to HHAs during the
summer of the first performance year (CY 2016).
We invited public comments on this proposal.
Comment: Several commenters support our rationale to use the most
recent data available to establish the ``baseline'' years. A few of
these stakeholders suggested that CMS move the Model baseline year
forward annually as is done in other value-based purchasing programs.
Response: We thank commenters for their support. We believe that
updating the Model baseline year to CY 2022 enables us to measure
competing HHAs' performance using benchmarks and achievement thresholds
that are based on the most recent data available. And, that it allows
the benchmarks and achievement thresholds to be set using data from
after the most acute phase of the COVID-19 PHE, which we believe would
provide a more appropriate basis for assessing performance under the
expanded Model than the CY 2019 pre-PHE period. CMS will consider the
possibility of moving the Model baseline year forward annually.
However, this consideration would need to be proposed in future
rulemaking.
Comment: Multiple commenters submitted concerns about changing the
``baseline year'' from CY 2019 to CY 2022 for the CY 2023 performance
year. Commenters were concerned that the quality improvement efforts
they have made in preparation for the Model would be negated or
``expunged'' if the Model baseline year was updated to CY
[[Page 66874]]
2022. A few of these commenters were from States in the original Model.
Response: We interpret commenters to be referring to the Model
baseline year as opposed to the HHA baseline year, because they often
referenced the availability of benchmarks and achievement thresholds
and not the improvement thresholds. We recognize that changing the
Model baseline year from CY 2019 to CY 2022 will affect individual HHAs
differently based on their quality performance efforts over the last
year. The expanded HHVBP Model performance scoring methodology rewards
progress in raising quality scores not only through improvement points,
but also through achievement points. Under the expanded Model,
achievement is prioritized relative to improvement. Quality improvement
efforts undertaken by HHAs that show impact on performance year quality
scores may be recognized through achievement points, regardless of when
those efforts were initiated. For example, an HHA that has improved
their overall quality will potentially get more achievement points
attributed to their TPS than from improvement points and would
potentially result in the same payment adjustment if we had not changed
the baseline.
Comment: Multiple commenters asked that we keep the baseline as CY
2019. One commenter suggested that we change the baseline year to CY
2021. Another commenter stated that it will take years for HHAs to
pivot appropriately and have that reflected in their scores and
suggested that usage of the CY 2019 data until the fully updated CY
2022 data is available would be more appropriate.
Response: We continue to believe that updating the Model baseline
year to CY 2022 enables us to measure competing HHAs' performance using
benchmarks and achievement thresholds that are based on the most recent
data available. And, that it allows the benchmarks and achievement
thresholds to be set using data from after the most acute phase of the
COVID-19 PHE, which we believe would provide a more appropriate basis
for assessing performance under the expanded Model than the CY 2019
pre-PHE period.
Comment: A few commenters suggested that if we move the Model
baseline year, that we postpone the first performance year to CY 2024
or until the CY 2022 data is available.
Response: The applicable measures (including the components of the
TNC measures) are familiar to HHAs as they are used in the HH QRP. To
help provide feedback, we plan to make the most current HHA-specific
performance data for the applicable measures to each HHA available in
iQIES. We intend for this to include current performance relative to
other HHAs nationally as soon as administratively possible and before
the start of the CY 2023 performance year and again periodically before
the first IPR scheduled for July 2023. Thus, CMS does not believe that
it is necessary to postpone the first performance year.
Comment: Commenters expressed concern that they would not have
baseline data until July 2023 (half-way through the first performance
year). Some cautioned that 2022 data cannot be analyzed quickly enough
to be accurately applied in 2023, with some stating it would prevent
them from establishing improvement goals or understanding the metrics
against which Model participants are being judged, as well as an
inability to plan financially or benchmark against any data until the
CY 2022 data is released. These commenters asked that we provide
baseline data prior to the start of each performance year; a few asked
that we provide baseline data prior to April 2023; and, a commenter
requested that CMS provide baseline data by January 31, 2023.
Response: We encourage HHAs to use current performance data in
iQIES and the performance data on the Care Compare website which
includes the OASIS-based measures (including those included in the TNC
measures), claims-based measures, and HHCAHPS-based measures applicable
to the expanded HHVBP Model. The data specific to each individual HHA
as well as the state and national averages (similar to the HHVBP
achievement thresholds) can help HHAs determine where they are
currently performing to continue to establish quality improvement
goals. To help provide feedback, we plan to make the most current HHA-
specific performance data for the applicable measures to each HHA
available in iQIES. We intend for this to include current performance
relative to other HHAs in their assigned cohort as soon as
administratively possible and before the start of the CY 2023
performance year and again periodically before the first IPR scheduled
for July 2023.
Comment: Commenters expressed concern about a compounding effect of
changing the Model baseline year and the proposed Medicare payment
adjustments described in the proposed rule (87 FR 37616 through 37620),
claiming that it will be difficult for HHAs to demonstrate improvement
going forward. These commenters believe that the proposed payment
adjustments threaten the quality improvement gains demonstrated in the
HHVBP Model, and if finalized, may severely limit the capacity for the
Expanded HHVBP Model to produce the results and savings currently
projected.
Response: Quality improvement efforts undertaken by HHAs that show
impact on performance year quality scores may be recognized through
achievement points, regardless of when those efforts were initiated.
For example, an HHA that has improved their overall quality will
potentially get more achievement points attributed to their TPS than
from improvement points and would potentially result in the same
payment adjustment if we had not changed the baseline. The payment
adjustment being finalized in section II.B.4. of this final rule is
estimated to result in an estimated net increase in home health
payments of 0.7 percent for CY 2023 ($125 million). For details, see
Table F5: Estimated HHA Impacts by Facility Type and Area of The
Country, CY 2023.
After consideration of the public comments received, we are
finalizing our proposal as proposed.
C. Request for Comment on a Future Approach to Health Equity in the
Expanded HHVBP Model
Significant and persistent inequities in healthcare outcomes exist
in the United States. Belonging to a racial or ethnic minority group;
living with a disability; being a member of the lesbian, gay, bisexual,
transgender, and queer (LGBTQ+) community; living in a rural area;
being a member of a religious minority; or being near or below the
poverty level, is often associated with worse health
outcomes.62 63 64 65 66 67 68 69 70 In line with
[[Page 66875]]
Executive Order 13985 of January 20, 2021 ``Advancing Racial Equity and
Support for Underserved Communities Through the Federal
Government,71 72 '' CMS defines health equity as the
attainment of the highest level of health for all people, where
everyone has a fair and just opportunity to attain their optimal health
regardless of race, ethnicity, disability, sexual orientation, gender
identity, socioeconomic status, geography, preferred language, or other
factors that affect access to care and health outcomes.\73\ We are
working to advance health equity by designing, implementing, and
operationalizing policies and programs that support health for all the
people served by our programs, eliminating avoidable differences in
health outcomes experienced by people who are disadvantaged or
underserved, and providing the care and support that our enrollees need
to thrive. Over the past decade we have established a suite of programs
and policies aimed at reducing health care disparities including the
CMS Mapping Medicare Disparities Tool,\74\ the CMS Innovation Center's
Accountable Health Communities Model,\75\ the CMS Disparity Methods
stratified reporting program,\76\ and efforts to expand social risk
factor data collection, such as the collection of Standardized Patient
Assessment Data Elements in the post-acute care setting,\77\ and the
CMS Framework for Health Equity 2022-2023.\78\
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\62\ Joynt KE, Orav E, Jha AK. (2011). Thirty-day readmission
rates for Medicare beneficiaries by race and site of care. JAMA,
305(7):675-681.
\63\ Lindenauer PK, Lagu T, Rothberg MB, et al. (2013). Income
inequality and 30 day outcomes after acute myocardial infarction,
heart failure, and pneumonia: Retrospective cohort study. British
Medical Journal, 346.
\64\ Trivedi AN, Nsa W, Hausmann LRM, et al. (2014). Quality and
equity of care in U.S. hospitals. New England Journal of Medicine,
371(24):2298- 2308.
\65\ Polyakova, M., et al. (2021). Racial disparities in excess
all-cause mortality during the early COVID-19 pandemic varied
substantially across states. Health Affairs, 40(2): 307-316.
\66\ Rural Health Research Gateway. (2018). Rural communities:
age, income, and health status. Rural Health Research Recap. https://www.ruralhealthresearch.org/assets/2200-8536/rural-communities-age-incomehealth-status-recap.pdf.
\67\ https://www.minorityhealth.hhs.gov/assets/PDF/Update_HHS_Disparities_Dept-FY2020.pdf.
\68\ www.cdc.gov/mmwr/volumes/70/wr/mm7005a1.htm.
\69\ Milkie Vu et al. Predictors of Delayed Healthcare Seeking
Among American Muslim Women, Journal of Women's Health 26(6) (2016)
at 58; S.B. Nadimpalli, et al., The Association between
Discrimination and the Health of Sikh Asian Indians Health Psychol.
2016 Apr; 35(4): 351-355.
\70\ Poteat TC, Reisner SL, Miller M, Wirtz AL. (2020). COVID-19
vulnerability of transgender women with and without HIV infection in
the Eastern and Southern U.S. preprint. medRxiv. 2020;2020.07.21.
20159327. doi:10.1101/2020.07.21.20159327.
\71\ https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
\72\ Executive Order June 15, 2022 ``Advancing Equality for
Lesbian, Gay, Bisexual, Transgender, Queer, and Intersex
Individuals'' changes LGBTQ+ to LGBTI+ (https://www.whitehouse.gov/briefing-room/presidential-actions/2022/06/15/executive-order-on-advancing-equality-for-lesbian-gay-bisexual-transgender-queer-and-intersex-individuals/).
\73\ https://www.cms.gov/pillar/health-equity.
\74\ https://www.cms.gov/About-CMS/Agency-Information/OMH/OMH-Mapping-Medicare-Disparities.
\75\ https://innovation.cms.gov/innovation-models/ahcm.
\76\ https://qualitynet.cms.gov/inpatient/measures/disparity-methods.
\77\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/-IMPACT-Act-Standardized-Patient-Assessment-Data-Elements.
\78\ https://www.cms.gov/sites/default/files/2022-04/CMS%20Framework%20for%20Health%20Equity_2022%2004%2006.pdf.
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As we continue to leverage our value-based purchasing initiatives
to improve the quality of care furnished across healthcare settings, we
are interested in exploring the role of health equity in creating
better health outcomes for all populations in our programs and models.
As the March 2020 ASPE Report to Congress on Social Risk Factors and
Performance in Medicare's Value-Based Purchasing Program notes, it is
important to implement strategies that cut across all programs and
health care settings to create aligned incentives that drive providers
to improve health outcomes for all beneficiaries.\79\ We are interested
in stakeholder feedback on specific actions the expanded HHVBP Model
can take to address healthcare disparities and advance health equity.
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\79\ Office of the Assistant Secretary for Planning and
Evaluation, U.S. Department of Health & Human Services. Second
Report to Congress on Social Risk Factors and Performance in
Medicare's Value-Based Purchasing Program. 2020. https://aspe.hhs.gov/social-risk-factors-and-medicares-value-basedpurchasing-programs.
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As we continue to develop policies for the expanded HHVBP Model, we
requested public comments on policy changes that we should consider on
the topic of health equity. We specifically requested comments on
whether we should consider incorporating adjustments into the expanded
HHVBP Model to reflect the varied patient populations that HHAs serve
around the country and tie health equity outcomes to the payment
adjustments we make based on HHA performance under the Model. These
adjustments could be made at the measure level in forms such as
stratification (for example, based on dual status or other metrics), or
we could propose to adopt new measures of social determinants of health
(SDOH). These adjustments could also be incorporated at the scoring
level in forms such as modified benchmarks, points adjustments, or
modified payment adjustment percentages (for example, peer comparison
groups based on whether the HHA includes a high proportion of dual
eligible beneficiaries or other metrics). We requested commenters'
views on which of these adjustments, if any, would be most effective
for the expanded HHVBP Model.
Comment: Commenters encouraged our efforts to advance health equity
within the expanded HHVBP Model. Additionally, commenters provided
specific comments, concerns, and requests related to the expanded HHVBP
Model falling into the following themes:
Commenters believe that applying health equity to payments may
create disincentives to admit some patients and create unintended
consequences and requests to examine strategies to reduce the risks for
unintended consequence prior to implementing health equity adjustments
to the expanded HHVBP Model; particularly, commenters requested CMS
ensure that incorporating health equity into the Model does not
unintentionally disadvantage any HHAs serving communities with notably
low levels of diversity and does not undermine access to care for
beneficiaries.
Commenters suggested that prior to adding new measures to value-
based purchasing initiatives, measures should first be included in its
related quality reporting program.
Commenters believed that payment should not be tied to measure
performance until a measure is thoroughly tested, evaluated, and has
NQF-endorsement. They believe that measure methodology and
implementation of individual measures should be sufficiently vetted
prior to inclusion, and specifically part of the HH QRP prior to
advancing to the expanded HHVBP Model.
Commenters requested that CMS select measures that are reliable,
reflect true differences in performance and are not attributable to
random variation; and, consider outcome measures for the expanded Model
related to beneficiary access and outcomes, as well as costs.
Commenters requested that CMS use existing data sources for data
collection and not require HHAs to collect additional data to support
incorporating health equity into the expanded HHVBP Model. Commenters
requested that CMS expand the use of and leveraging existing tools that
are used to document existing equity data, including data on social
determinants of health, specifically Z codes.
Commenters requested that CMS reconsider incorporating health
equity in the expanded HHVBP Model and instead work to incorporate an
evidence-based tool into the Patient-Driven Groupings Model in order to
properly incentivize HHAs serving communities where health inequities
exist.
Commenters requested that CMS apply health equity principals to
homecare differently from inpatient settings.
Commenters pointed out that the Evaluation of the Home Health
Value-Based Purchasing (HHVBP) Model Fifth
[[Page 66876]]
Annual Report indicated that there were disparities among the Medicaid
population for acute care hospitalizations and functional measures and
suggest that these are particularly important to rural providers in
underserved areas who have a disproportionate share of patients with
social and economic challenges.
Commenters suggested that CMS incorporate patient-level data like
race and ethnicity or the proportion of dually eligible patients served
by an agency into the development of the HHVBP cohorts to create more
level playing fields for agencies in historically marginalized areas to
improve as the current cohort designations do not consider the
diversity of patient population and have the potential to negatively
impact providers in underserved areas.
Commenters suggested that CMS apply a stronger risk adjustment
model as some HHAs care for much sicker and more complex populations
than others. And, any advancements within the expanded HHVBP Model that
account for pre-existing health disparities and population differences
upon the start of care will help ensure agencies are compared fairly
and that incentives are aligned to accommodate those requiring more
complex care and those for individuals with maintenance goals whom some
believe are not sufficiently weighted in the Model to incentivize HHAs
to serve beneficiaries whose conditions may not improve, especially in
the context of payment, quality reporting, and auditing policies and
practices that favor beneficiaries with strong rehabilitation
potential.
Commenters suggested that CMS adjust payments based on a provider's
performance compared with its peers; provider performance compared to
providers with similar mixes of patients to determine rewards or
penalties based on performance; and, performance relative to national
performance scales and the shares of beneficiaries at high social risk.
Commenters suggested that CMS convene a Technical Expert Panel for
stakeholder input to ensure that metrics for health equity and the
application to the expanded HHVBP Model are determined through
evidence-based research.
Commenters had varying opinions about stratifying by dual eligible
status, ranging from its importance to concerns that dual status does
not reflect many other SDOHs that impact health outcomes or
discrimination which affect access to care.
Response: We appreciate the comments that we received on this
request for information. We are not responding to individual specific
comments submitted in response to this RFI in this final rule, but we
will take this feedback into consideration as we develop our policies
for the future.
V. Home Infusion Therapy Services: Annual Payment Updates for CY 2023
In accordance with section 1834(u)(3) of the Act and 42 CFR
414.1550, our national home infusion therapy (HIT) services payment
rates for the initial and subsequent visits in each of the home
infusion therapy payment categories for CY 2023 are required to be the
CY 2022 rate adjusted by the percentage increase in the Consumer Price
Index (CPI) for all urban consumers (United States city average) for
the 12-month period ending with June of the preceding year reduced by a
productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of
the Act as the 10-year moving average of changes in annual economy-wide
private nonfarm business multifactor productivity. Section 1834(u)(3)
of the Act further states that the application of the productivity
adjustment may result in a percentage being less than 0.0 for a given
year, and may result in payment being less than such payment rates for
the preceding year. The CPI-U for the 12-month period ending in June of
2022 is 9.1 percent and the corresponding productivity adjustment is
0.4 percent based on IHS Global Inc.'s third-quarter 2022 forecast of
the CY 2023 productivity adjustment (which reflects the 10-year moving
average of changes in annual economy-wide private nonfarm business TFP
for the period ending June 30, 2022). Therefore, the final home
infusion therapy payment rate update for CY 2023 is 8.7 percent. We
note that Sec. 414.1550(d) does not permit any exercise of discretion
by the Secretary.
The single payment amounts are also adjusted for geographic area
wage differences using the geographic adjustment factor (GAF). We
remind stakeholders that the GAFs are a weighted composite of each
Physician Fee Schedule (PFS) localities work, practice expense (PE) and
malpractice (MP) expense geographic practice cost indices (GPCIs). The
periodic review and adjustment of the GPCIs is mandated by section
1848(e)(1)(C) of the Act. At each update, the proposed GPCIs are
published in the PFS proposed rule to provide an opportunity for public
comment and further revisions in response to comments prior to
implementation. The GPCIs and the GAFs are updated triennially with a
2-year phase in and were last updated in the CY 2020 PFS final rule.
For discussion regarding the next full update to the GPCIs and the GAFs
see the CY 2023 PFS proposed rule (87 FR 46004). The CY 2023 final GAFs
will be posted as an addendum on the PFS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched.
We also apply a GAF budget neutrality factor to home infusion
therapy payments whenever there are changes to the GAFs in order to
eliminate the aggregate effect of variations in the GAFS. The CY 2023
GAF standardization factor that will be used in updating the final HIT
payment amounts for CY 2023 is not available for this final rule, but
will be posted once the CY 2023 GAFs are finalized. The final GAFs, GAF
standardization factor, national home infusion therapy payment rates,
and locality-adjusted home infusion therapy payment rates will be
posted on CMS' Home Infusion Therapy Services web page \80\ once these
rates are finalized. In the future, we will no longer include a section
in the HH PPS rule on home infusion therapy if no changes are being
proposed to the payment methodology. Instead, the rates will be updated
each year in a Change Request and posted on the website. For more in-
depth information regarding the finalized policies associated with the
scope of the home infusion therapy services benefit and conditions for
payment, we refer readers to the CY 2020 HH PPS final rule with comment
period (84 FR 60544).
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\80\ Home Infusion Therapy Services Billing and Rates. https://www.cms.gov/medicare/home-infusion-therapy-services/billing-and-rates.
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VI. Collection of Information Requirements
A. Statutory Requirement for Solicitation of Comments
Under the Paperwork Reduction Act of 1995, we are required to
provide a 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
[[Page 66877]]
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
B. Information Collection Requirements (ICRs)
In the CY2023 HH PPS rule, we solicited public comment on each of
these issues for the following sections of this document that contain
information collection requirements (ICRs).
1. ICRs for HH QRP
In section III. of this final rule, we are finalizing our proposal
to end the temporary suspension of OASIS data on non-Medicare and non-
Medicaid patients and to require HHAs to submit all-payer OASIS data
for purposes of the HH QRP, beginning with the CY 2026 program year. We
believe that the burden associated with this proposal is the time and
effort associated with the submission of non-Medicare and non-Medicaid
OASIS data. The submission of OASIS data on HH patients regardless of
payer source will ensure that CMS can appropriately assess the quality
of care provided to all patients receiving care by all Medicare-
certified HHAs that participate in the HH QRP. As of January 1, 2022,
there are approximately 11,354 HHAs reporting OASIS data to CMS under
the HH QRP.
The OASIS is completed by RNs or PTs, or very occasionally by
occupational therapists (OT) or speech language pathologists (SLP/ST).
Data from 2020 show that the SOC/ROC OASIS is completed by RNs
(approximately 76.50 percent of the time), PTs (approximately 20.78
percent of the time), and other therapists, including OTs and SLP/STs
(approximately 2.72 percent of the time). Based on this analysis, we
estimated a weighted clinician average hourly wage of $79.41, inclusive
of fringe benefits, using the hourly wage data in Table F1. Individual
providers determine the staffing resources necessary.
For purposes of calculating the costs associated with the
information collection requirements, we obtained mean hourly wages for
these from the U.S. Bureau of Labor Statistics' May 2020 National
Occupational Employment and Wage Estimates (https://www.bls.gov/oes/current/oes_nat.htm). To account for overhead and fringe benefits (100
percent), we have doubled the hourly wage. These amounts are detailed
in Table F1.
Table F1--U.S. Bureau of Labor Statistics' May 2020 National
Occupational Employment and Wage Estimates
[GRAPHIC] [TIFF OMITTED] TR04NO22.049
We estimate that this new requirement will result in HHAs having to
increase by 30 percent the number of assessments they complete at each
timepoint, with a corresponding 30 percent increase in their estimated
hourly burden and estimated clinical cost.\81\ For purposes of
estimating burden, we utilize item-level burden estimates for OASIS-E
that will be released on January 1, 2023.
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\81\ As estimated by CMS analysis of payer source indicators in
CY20 HH Cost report data compared to the CY20 HH OASIS data file.
---------------------------------------------------------------------------
Table F2 shows the total number of OASIS assessments that HHAs
actually completed in CY 2020, as well as how those numbers would have
increased if non-Medicare and non-Medicaid OASIS assessments had been
required at that time.
Table F2--CY 2020 OASIS Submissions by Time Point
[GRAPHIC] [TIFF OMITTED] TR04NO22.050
Table F3 summarizes the estimated clinician hourly burden for
Medicare only, non-Medicare, and all-payer patients receiving HH care
for each OASIS assessment type using CY 2020 assessment totals.
Table F3--Summary of Estimated Clinician Hourly Burden
[[Page 66878]]
[GRAPHIC] [TIFF OMITTED] TR04NO22.051
The calculations we used to estimate the total all-payer hourly
burden with CY 2020 assessment totals and OASIS-E data elements at each
time point of OASIS data collection are as follows:
Start of Care
Estimated Time Spent per Each OASIS-E SOC Assessment/Patient = 57.3
Clinician Minutes
203 data elements x 0.15 - 0.3 minutes per data element = 57.3 minutes
of clinical time spent to complete data entry for the OASIS-E SOC
assessment
21 DE counted as 0.15 minutes/DE (3.15)
9 DE counted as 0.25 minutes/DE (2.25)
173 DE counted as 0.30 minutes/DE (51.9)
Clinician Estimated Hourly Burden for All HHAs (11,354) for OASIS-E SOC
Assessments = 7,937,363 Hours
57.3 clinician minutes per SOC assessment x 8,311,375 assessments =
476,241,787 minutes/60 minutes per hour = 7,937,363 hours for all HHAs
Resumption of Care
Estimated Time Spent per Each OASIS-D ROC Assessment/Patient = 48
Minutes
172 data elements x 0.15-0.3 minutes per data element = 48 minutes of
clinical time spent to complete data entry for the OASIS-D ROC
assessment
21 DE counted as 0.15 minute/DE (3.15)
9 DE counted as 0.25 minute/DE (2.25)
142 DE counted as 0.30 minute/DE (42.6)
Clinician Estimated Hourly Burden for All HHAs for OASIS-E ROC
Assessments = 968,146 Hours
48 clinician minutes per ROC assessment x 1,210,183 ROC assessments =
58,088,784 minutes/60 minutes = 968,146 hours for all HHAs
Follow Up
Estimated Time Spent per Each OASIS-E FU Assessment/Patient = 11.1
Minutes
37 data elements x 0.3 minutes per data element = 11.1 minutes of
clinical time spent to complete data entry for the OASIS-D FU
assessment
37 DE counted as 0.30 minutes/DE
Clinician Estimate Hourly Burden for All HHAs for OASIS-E FU
Assessments = 878,532 Hours
11.1 clinician minutes for OASIS-E FU assessments x 4,748,822 FU
assessments = 52,711,924 minutes/60 minutes = 878,532 hours for all
HHAs
Transfer of Care
Estimated Time Spent per Each OASIS-E TOC Assessment/Patient = 6.6
Minutes
22 data elements x 0.15-0.3 minutes per data element = 6.6 minutes of
clinical time spent to complete data entry for the OASIS-D TOC
assessment
22 DE counted as 0.30 minutes/DE
Clinician Estimated Hourly Burden for All HHAs for OASIS-E TOC
Assessments = 256,941 Hours
6.6 clinician minutes x 2,335,875 TOC assessments = 15,416,775 minutes/
60 minutes = 256,941 hours
Death at Home
Estimated Time Spent per Each OASIS-E DAH Assessment/Patient = 2.7
Minutes
9 data elements x 0.15-0.3 minutes per data element = 2.7 minutes of
clinical time spent to complete data entry for the OASIS-E DAH
assessment
9 DE counted as 0.30 minutes/DE
Clinician Estimated Hourly Burden for All HHAs for OASIS-E DAH
Assessments = 2,953 Hours
2.7 clinician minutes x 65,640 DAH assessments = 177,228 minutes/60
minutes = 2,953 hours
Discharge
Estimated Time Spent per Each OASIS-E DC Assessment/Patient = 40.2
Minutes
146 data elements x 0.15-0.3 minutes per data element = 40.2 minutes of
clinical time spent to complete data entry for the OASIS-E DC
assessment
21 DE counted as 0.15 minutes/DE
9 DE counted as 0.25 minutes/DE
116 DE counted as 0.30 minutes/DE
Clinician Estimated Hourly Burden for All HHAs for OASIS-E DC
Assessments = 4,534,626 Hours
40.2 clinician minutes x 6,768,099 DC assessments = 272,077,580
minutes/60 minutes = 4,534,626 hours
Table F4 summarizes the estimated clinician costs for the
completion of the OASIS-E assessment tool for Medicare only, non-
Medicare, and all-payer patients receiving HH care for each OASIS
assessment type using CY2020 assessment and cost data.
Table F4. Summary of Estimated Clinician Costs
[[Page 66879]]
[GRAPHIC] [TIFF OMITTED] TR04NO22.052
Outlined later are the calculation for estimates used to derive
total all-payer costs with OASIS-E data elements for each OASIS
assessment type using CY2020 assessment and cost data:
Start of Care
Estimated Cost for All HHAs for OASIS-E SOC Assessments =
$630,305,995.83 for All HHAs
$79.41/hour x 7,937,363 hours for all HHAs = $630,305,995.83 for all
HHAs
Resumption of Care
Estimated Cost for All HHAs for OASIS-E ROC Assessments =$76,880,473.86
for All HHAs
$79.41/hour x 968,146 hours = $76,880,473.86 for all HHAs
Follow Up
Estimated Costs for All HHAs for OASIS-E FU Assessments = $82,962,803.4
for All HHAs
$79.41/hour x 878,532hours = $69,764,226 for all HHAs
Transfer of Care
Estimated Costs for All HHAs for All OASIS-E TOC Assessments =
$20,404,081.86 for All HHAs
$79.41/hour x 256,946 hours = $20,404,081.86 for all HHAs
Death at Home
Estimated Costs for All HHAs for OASIS-E DAH Assessments = $234,497.73
for All HHAs
$79.41 x 2,953 hours = $234,497.73 for all HHAs
Discharge
Estimated Costs for All HHAs for OASIS-E DC Assessments =
$360,094,650.66 for All HHAs
$79.41/hour x 4,534,626 hours = $360,094,650.66 for all HHAs
Based on the data in Tables F1 to F3 for the 11,354 active
Medicare-certified HHAs, we estimate the total increase in costs
associated with the changes in the HH QRP to be approximately 23,529.82
per HHA annually or $267,157,680.3 all HHAs. This corresponds to an
estimated increase in clinician burden associated with the changes to
the HH QRP of approximately 296.3 hours per HHA or approximately
3,364,285 hours for all HHAs. This additional burden would begin with
January 1, 2025 HHA discharges
C. Submission of PRA-Related Comments
We have submitted a copy of this final rule to OMB for its review
of the rule's information collection requirements. The requirements are
not effective until they have been approved by OMB.
We invited public comments on these information collection
requirements.
Comment: A few commenters outlined opposition to the proposal based
on CMS's underestimate of the burden both in terms of time for
completion and current costs of HHA staffing.
Response: Regarding concerns that we underestimated the burden of
this proposal, we have utilized a consistent process for time spent and
labor costs associated with the implementation of updates to OASIS,
including OASIS E, the version of the OASIS that would be used with the
implementation of this proposal. There are also factors that limit the
scope of the associated burden. As we noted in our response to the
policy proposal, providers already have processes in place to collect
OASIS data for Medicare/Medicaid patients which limit the broader
impact of the resumption of collection to include patients of all payer
sources. Another factor is that when CMS surveyed providers, they
shared that there are already cases in which OASIS data is collected on
non-Medicare/Medicaid patients but not submitted to CMS. As this policy
is focused on HHAs with systems in place to collect and submit OASIS
data, the economy of scale is anticipated to limit the impacts on
staffing or other burden issues.
After consideration of the public comments received, and as
addressed in section III.D. of this final rule, we are finalizing the
proposal to end the suspension of non-Medicare/non-Medicaid OASIS data
collection and to require HHAs to submit all-payer OASIS data for
purposes of the HH QRP beginning with the CY 2027 HH QRP program year.
VII. Regulatory Impact Analysis
A. Statement of Need
1. HH PPS
Section 1895(b)(1) of the Act requires the Secretary to establish a
HH PPS for all costs of home health services paid under Medicare. In
addition, section 1895(b) of the Act requires: (1) the computation of a
standard prospective payment amount include all costs for home health
services covered and paid for on a reasonable cost basis and that such
amounts be initially based on the most recent audited cost report data
available to the Secretary; (2) the prospective payment amount under
the HH PPS to be an appropriate unit of service based on the number,
type, and duration of visits provided within that unit; and (3) the
standardized prospective payment amount be adjusted to account for the
effects of case-mix and wage levels among HHAs. Section 1895(b)(3)(B)
of the Act addresses the annual update to the standard prospective
payment amounts by the home health applicable percentage increase.
Section 1895(b)(4) of the Act governs the payment computation. Sections
1895(b)(4)(A)(i) and (b)(4)(A)(ii) of the Act requires the standard
prospective payment amount
[[Page 66880]]
be adjusted for case-mix and geographic differences in wage levels.
Section 1895(b)(4)(B) of the Act requires the establishment of
appropriate case-mix adjustment factors for significant variation in
costs among different units of services. Lastly, section 1895(b)(4)(C)
of the Act requires the establishment of wage adjustment factors that
reflect the relative level of wages, and wage-related costs applicable
to home health services furnished in a geographic area compared to the
applicable national average level. Section 1895(b)(3)(B)(iv) of the Act
provides the Secretary with the authority to implement adjustments to
the standard prospective payment amount (or amounts) for subsequent
years to eliminate the effect of changes in aggregate payments during a
previous year or years that were the result of changes in the coding or
classification of different units of services that do not reflect real
changes in case-mix. Section 1895(b)(5) of the Act provides the
Secretary with the option to make changes to the payment amount
otherwise paid in the case of outliers because of unusual variations in
the type or amount of medically necessary care. Section
1895(b)(3)(B)(v) of the Act requires HHAs to submit data for purposes
of measuring health care quality, and links the quality data submission
to the annual applicable percentage increase. Section 50208 of the BBA
of 2018 (Pub. L. 115-123) required the Secretary to implement a new
methodology used to determine rural add-on payments for CYs 2019
through 2022. This methodology used to determine rural add-on payments
has expired and will not affect payments for CY 2023.
Sections 1895(b)(2) and 1895(b)(3)(A) of the Act, as amended by
section 51001(a)(1) and 51001(a)(2) of the BBA of 2018 respectively,
required the Secretary to implement a 30-day unit of service, for 30-
day periods beginning on and after January 1, 2020. Section
1895(b)(3)(D)(i) of the Act, as added by section 51001(a)(2)(B) of the
BBA of 2018, requires the Secretary to annually determine the impact of
differences between assumed behavior changes, as described in section
1895(b)(3)(A)(iv) of the Act, and actual behavior changes on estimated
aggregate expenditures under the HH PPS with respect to years beginning
with 2020 and ending with 2026. Section 1895(b)(3)(D)(ii) of the Act
requires the Secretary, at a time and in a manner determined
appropriate, through notice and comment rulemaking, to provide for one
or more permanent increases or decreases to the standard prospective
payment amount (or amounts) for applicable years, on a prospective
basis, to offset for such increases or decreases in estimated aggregate
expenditures, as determined under section 1895(b)(3)(D)(i) of the Act.
Additionally, 1895(b)(3)(D)(iii) of the Act requires the Secretary, at
a time and in a manner determined appropriate, through notice and
comment rulemaking, to provide for one or more temporary increases or
decreases to the payment amount for a unit of home health services for
applicable years, on a prospective basis, to offset for such increases
or decreases in estimated aggregate expenditures, as determined under
section 1895(b)(3)(D)(i) of the Act. The HH PPS wage index utilizes the
wage adjustment factors used by the Secretary for purposes of sections
1895(b)(4)(A)(ii) and (b)(4)(C) of the Act for hospital wage
adjustments.
2. HH QRP
Section 1895(b)(3)(B)(v) of the Act authorizes the HH QRP, which
requires HHAs to submit data in accordance with the requirements
specified by CMS. Failure to submit data required under section
1895(b)(3)(B)(v) of the Act with respect to a program year will result
in the reduction of the annual home health market basket percentage
increase otherwise applicable to an HHA for the corresponding calendar
year by 2 percentage points.
3. Expanded HHVBP Model
In the CY 2022 HH PPS final rule (86 FR 62292 through 62336) and
codified at 42 CFR part 484 subpart F, we finalized our policy to
expand the HHVBP Model to all Medicare certified HHAs in the 50 States,
territories, and District of Columbia beginning January 1, 2022. CY
2022 was designated as a pre-implementation year during which CMS will
provide HHAs with resources and training. This pre-implementation year
was intended to allow HHAs time to prepare and learn about the
expectations and requirements of the expanded HHVBP Model without risk
to payments.
We also finalized that the expanded Model will use a baseline year
to establish the benchmarks and achievement thresholds for each cohort
on each measure for HHAs. The baseline year is currently 2019. In this
rule, we are finalizing the establishment of a separate HHA baseline
year to determine HHA improvement thresholds by measure for each
individual agency to assess achievement or improvement of HHA
performance on applicable quality measures. As codified at Sec.
484.350(b), for an HHA that is certified by Medicare on or after
January 1, 2019, the baseline year is the first full calendar year of
services beginning after the date of Medicare certification, with the
exception of HHAs certified on January 1, 2019 through December 31,
2019, for which the baseline year is calendar year 2021, and the first
performance year is the first full calendar year (beginning with CY
2023) following the baseline year. As discussed in that final rule, we
stated that we may conduct analyses of the impact of using various
baseline periods and consider any changes for future rulemaking.
Due to the continuation of the COVID-19 PHE through CY 2021 and its
effects on the quality measures in the expanded HHVBP Model used to
determine payment adjustments for eligible HHAs (as described in
section IV.B.2.b. of this final rule), we believe an HHA's baseline
year that would be CY 2021 should be adjusted to CY 2022. This policy
aligns with similar proposals in the Hospital VBP and SNF VBP Programs
to account for the continued effects of the COVID-19 PHE on measures in
2021. Additionally, amending the HHA baseline year (and defining this
term) for HHAs certified prior to 2022 starting in the CY 2023
performance year as well as changing the Model baseline year (and
defining this term) to CY 2022 starting in the CY 2023 performance year
allows eligible HHAs to be scored on measure data that is more current
and is intended to compare HHAs to a base year that is 2 years after
the peak of the pandemic.
4. Medicare Coverage of Home Infusion Therapy
Section 1834(u)(1) of the Act, as added by section 5012 of the 21st
Century Cures Act, requires the Secretary to establish a home infusion
therapy services payment system under Medicare. This payment system
requires a single payment to be made to a qualified home infusion
therapy supplier for items and services furnished by a qualified home
infusion therapy supplier in coordination with the furnishing of home
infusion drugs. Section 1834(u)(1)(A)(ii) of the Act states that a unit
of single payment is for each infusion drug administration calendar day
in the individual's home. The Secretary shall, as appropriate,
establish single payment amounts for types of infusion therapy,
including to consider variation in utilization of nursing services by
therapy type. Section 1834(u)(1)(A)(iii) of the Act provides a
limitation to the single payment amount, requiring that it shall not
exceed the amount determined under the Physician Fee Schedule
[[Page 66881]]
(under section 1848 of the Act) for infusion therapy services furnished
in a calendar day if furnished in a physician office setting, except
such single payment shall not reflect more than 5 hours of infusion for
a particular therapy in a calendar day. Section 1834(u)(1)(B)(i) of the
Act requires that the single payment amount be adjusted by a geographic
wage index. Finally, section 1834(u)(1)(C) of the Act allows for
discretionary adjustments which may include outlier payments and other
factors as deemed appropriate by the Secretary, and are required to be
made in a budget neutral manner. Section 1834(u)(3) of the Act
specifies that annual updates to the single payment are required to be
made beginning January 1, 2022, by increasing the single payment amount
by the percentage increase in the CPI-U for all urban consumers for the
12-month period ending with June of the preceding year, reduced by the
productivity adjustment. The unit of single payment for each infusion
drug administration calendar day, including the required adjustments
and the annual update, cannot exceed the amount determined under the
fee schedule under section 1848 of the Act for infusion therapy
services if furnished in a physician's office, and the single payment
amount cannot reflect more than 5 hours of infusion for a particular
therapy per calendar day.
B. Overall Impact
We have examined the impacts of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96 354), section 1102(b) of the Act, section 202 of the
Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4),
Executive Order 13132 on Federalism (August 4, 1999), and the
Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Section
3(f) of Executive Order 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule: (1) having an
annual effect on the economy of $100 million or more in any 1 year, or
adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local or tribal governments or communities (also
referred to as ``economically significant''); (2) creating a serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order. Therefore, we estimate
that this rule is ``economically significant'' as measured by the $100
million threshold, and hence also a major rule under the Congressional
Review Act. Accordingly, we have prepared a Regulatory Impact Analysis
that presents our best estimate of the costs and benefits of this rule.
C. Detailed Economic Analysis
This rule finalizes updates to Medicare payments under the HH PPS
for CY 2023. The net transfer impact related to the changes in payments
under the HH PPS for CY 2023 is estimated to be 125 million (0.7
percent). The $125 million increase in estimated payments for CY 2023
reflects the effects of the proposed CY 2023 home health payment update
percentage of 4.0 percent ($725 million increase), an estimated 3.5
percent decrease that reflects the effects of the permanent behavioral
adjustment ($635 million decrease) and an estimated 0.2 percent
increase that reflects the effects of an updated FDL ($35 million
increase).
We use the latest data and analysis available, however, we do not
adjust for future changes in such variables as number of visits or
case-mix. This analysis incorporates the latest estimates of growth in
service use and payments under the Medicare home health benefit, based
primarily on Medicare claims data for periods that ended on or before
December 31, 2021. We note that certain events may combine to limit the
scope or accuracy of our impact analysis, because such an analysis is
future-oriented and, thus, susceptible to errors resulting from other
changes in the impact time period assessed. Some examples of such
possible events are newly-legislated general Medicare program funding
changes made by the Congress or changes specifically related to HHAs.
In addition, changes to the Medicare program may continue to be made as
a result of new statutory provisions. Although these changes may not be
specific to the HH PPS, the nature of the Medicare program is such that
the changes may interact, and the complexity of the interaction of
these changes could make it difficult to predict accurately the full
scope of the impact upon HHAs.
Table F5 represents how HHA revenues are likely to be affected by
the finalized policy changes for CY 2023. For this analysis, we used an
analytic file with linked CY 2021 OASIS assessments and home health
claims data for dates of service that ended on or before December 31,
2021. The first column of Table F5 classifies HHAs according to a
number of characteristics including provider type, geographic region,
and urban and rural locations. The second column shows the number of
facilities in the impact analysis. The third column shows the payment
effects of the permanent behavioral adjustment on all payments. The
fourth column shows the payment effects of the recalibration of the
case-mix weights offset by the case-mix weights budget neutrality
factor. The fifth column shows the payment effects of updating to the
CY 2023 wage index with a 5-percent cap on wage index decreases. The
sixth column shows the payment effects of the final CY 2023 home health
payment update percentage. The seventh column shows the payment effects
of the new FDL, and the last column shows the combined effects of all
the finalized provisions.
Overall, it is projected that aggregate payments in CY 2023 would
increase by 0.7 percent which reflects the 3.5 percent decrease from
the permanent behavioral adjustment, the 4.0 payment update percentage
increase, and the 0.2 percent increase from lowering the FDL. As
illustrated in Table F5, the combined effects of all of the changes
vary by specific types of providers and by location. We note that some
individual HHAs within the same group may experience different impacts
on payments than others due to the distributional impact of the CY 2023
wage index, the percentage of total HH PPS payments that were subject
to the LUPA or paid as outlier payments, and the degree of Medicare
utilization.
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Table F5--Estimated HHA Impacts by Facility Type and Area of the
Country, CY 2023
[[Page 66882]]
[GRAPHIC] [TIFF OMITTED] TR04NO22.053
[[Page 66883]]
[GRAPHIC] [TIFF OMITTED] TR04NO22.054
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2. Impacts for the HH QRP for CY 2023
Failure to submit HH QRP data required under section
1895(b)(3)(B)(v) of the Act with respect to a program year will result
in the reduction of the annual home health market basket percentage
increase otherwise applicable to an HHA for the corresponding calendar
year by 2 percentage points. For the CY 2022 program year, 1,169 of the
11,128 active Medicare-certified HHAs, or approximately 10.5 percent,
did not receive the full annual percentage increase because they did
not meet assessment submission requirements. The 1,169 HHAs that did
not satisfy the reporting requirements of the HH QRP for the CY 2022
program year represent $437 million in home health claims payment
dollars during the reporting period out of a total $17.3 billion for
all HHAs.
As discussed in section III. of this final rule, we are ending the
temporary suspension on our collection of non-Medicare/non-Medicaid
data under section 704 of the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 and, in accordance with section
1895(b)(3)(B)(v) of the Act, requiring HHAs to report all-payer OASIS
data for purposes of the HH QRP, beginning with the CY 2026 program
year.
Section III. of this final rule provides a detailed description of
the net increase in burdens associated with the proposed changes. We
proposed that HHAs would be required to begin reporting all-payer OASIS
data beginning with January 1, 2025 discharges. The cost impact of this
proposed changes was estimated to be a net increase of $267,157,680.3
in annualized cost to HHAs, discounted at 7 percent relative to year
2020, over a perpetual time horizon beginning in CY 2026. We described
the estimated burden and cost reductions for these measures in section
V1.B.1. of this final rule. In summary, the submission of data on non-
Medicare/Medicaid patients for the HH QRP is estimated to increase the
burden on HHAs to $23,529.82 per HHA annually, or $267,157,680.3 for
all HHAs annually.
3. Impacts for the Expanded HHVBP Model
In the CY 2022 HH PPS final rule (86 FR 62402 through 62410), we
estimated that the expanded HHVBP Model would generate a total
projected 5-year gross FFS savings for CYs 2023 through 2027 of
$3,376,000,000. We are finalizing our proposed changes to the baseline
years and note that it will not change those estimates because they do
not change the number of HHAs in the Model or the payment methodology.
4. Impact of the CY 2023 Payment for Home Infusion Therapy Services
We did not propose any changes related to payments for home
infusion therapy services in CY 2023. The CY 2023 home infusion therapy
service payments will be updated by the CPI-U reduced by the
productivity adjustment and geographically adjusted in a budget neutral
manner using the GAF standardization factor. The overall economic
impact of the statutorily-required HIT payment rate updates is an
estimated increase in payments to HIT suppliers of 8.7 percent
($600,000) for CY 2023 based on the CPI-U for the 12-month period
ending in June of 2022 of 9.1 percent and the corresponding
productivity adjustment is 0.4 percent
D. Regulatory Review Cost Estimation
If regulations impose administrative costs on private entities,
such as the time needed to read and interpret this final rule, we
should estimate the cost associated with the regulatory review. Due to
the uncertainty involved with accurately quantifying the number of
entities that will review the rule, we assume that the total number of
unique commenters on this year's proposed rule will be the number of
reviewers of this final rule. We acknowledge that this assumption may
understate or overstate the costs of reviewing this rule. It is
possible that not all commenters reviewed this year's proposed rule in
detail, and it is also possible that some reviewers chose not to
comment on the proposed rule. For these reasons we thought that the
number of commenters would be a fair estimate of the number of
reviewers of this rule. We also recognize that different types of
entities are in many cases affected by mutually exclusive sections of
this final rule, and therefore for the purposes of our estimate we
assume that each reviewer reads approximately 50 percent of the rule.
Using the wage information from the BLS for medical and health
service managers (Code 11-9111), we estimate that the cost of reviewing
this rule is $115.22 per hour, including overhead and fringe benefits
https://www.bls.gov/oes/current/oes_nat.htm. Assuming an average
reading speed, we estimate that it would take approximately 2.54 hours
for the staff to review half of this final rule. For each entity that
reviews the rule, the estimated cost is $292.33 (2.54 hours x $115.22).
Therefore, we estimate that the total cost of reviewing this regulation
is $ 263,389.33 ($292.33 x 901) [901 is the number of estimated
[[Page 66884]]
reviewers, which is based on the total number of unique commenters from
this year's proposed rule].
E. Alternatives Considered
1. HH PPS
For the CY 2023 HH PPS final rule, we considered alternatives to
the provisions articulated in section II.B.2. of this final rule.
Specifically, we considered other potential methodologies recommended
by commenters to determine the difference between assumed versus actual
behavior change on estimated aggregate expenditures in response to the
comment solicitation in the CY 2022 HH PPS proposed rule (86 FR 35892).
However, most of the recommended alternate methodologies controlled for
certain actual behavior changes (for example, the reduction in therapy
visits or LUPA visits) and this is not in alignment with our
interpretation of the statute at section 1895(b)(3)(D)(i) of the Act,
which requires CMS to examine actual behavior change and make temporary
and permanent adjustments to the standardized payment amounts.
Therefore, any method that would control for an actual behavior change
affecting payment would be contrary to what is required by the Social
Security Act. Additionally, we considered alternative approaches to the
implementation of the permanent and temporary behavior assumption
adjustments. As described in section II.B.2. of this rule, to help
prevent future over or underpayments, we calculated a permanent
prospective adjustment of -7.85 percent by determining what the 30-day
base payment amount should have been in CYs 2020 and 2021 in order to
achieve the same estimated aggregate expenditures as obtained from the
simulated 60-day episodes and are finalizing half of the determined
adjustment which is -3.925 percent for CY 2023. One alternative to the
-3.925 percent permanent payment adjustment included taking the full -
7.85 percent adjustment for CY 2023. However, due to the potential
hardship to some providers of implementing the full -7.85 percent at
once, we decided it would be more appropriate to take half the
adjustment resulting in a -3.925 percent permanent payment adjustment
for CY 2023. However, we note the permanent adjustment to account for
actual behavior changes in CYs 2020 and 2021 should be -7.85 percent.
Therefore, applying a -3.925 percent permanent adjustment to the CY
2023 30-day payment rate would not adjust the rate fully to account for
differences in behavior changes on estimated aggregate expenditures
during those years. We would have to account for that difference, and
any other potential adjustments needed to the base payment rate, to
account for behavior change based on data analysis in future
rulemaking. Another alternative would be to delay the full permanent
adjustment to a future year. However, we conclude that delaying the
full permanent adjustment would not be appropriate, as this would
further impact budget neutrality and likely lead to a compounding
effect creating the need for a much larger reduction to the payment
rate in future years.
2. HHQRP
We did not consider any alternatives in this final rule.
3. Expanded HHVBP Model
We discuss the alternative we considered to the finalized change to
the HHA baseline year for each applicable measure in the expanded HHVBP
Model in section IV.B.2.b. of this final rule.
4. Home Infusion Therapy
We did not consider any alternatives in this final rule.
F. Accounting Statements and Tables
1. HH PPS
As required by OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf, in Table F7, we have prepared an accounting
statement showing the classification of the transfers and benefits
associated with the CY 2023 HH PPS provisions of this rule.
Table F7--Accounting Statement: HH PPS Classification of Estimated
Transfers and Benefits, From CY 2022 to 2023
[GRAPHIC] [TIFF OMITTED] TR04NO22.055
2. HHQRP
As required by OMB Circular A-4 (available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf), in Table F8, we have prepared an accounting statement showing
the classification of the expenditures associated with this final rule
as they relate to HHAs. Table F8 provides our best estimate of the
increase in burden for OASIS submission.
Table F8--Accounting Statement: Classification of Estimated Costs of
Oasis Item Collection, From CY 2026 to CY 2027
[GRAPHIC] [TIFF OMITTED] TR04NO22.056
3. Expanded HHVBP Model
As required by OMB Circular A-4 (available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf), in Table F9, we have prepared an accounting statement Table F9
provides our best estimate of the decrease in Medicare payments under
the expanded HHVBP Model.
Table F9--Accounting Statement: Expanded HHVBP Model Classification of
Estimated Transfers for CYs 2023-2027
[[Page 66885]]
[GRAPHIC] [TIFF OMITTED] TR04NO22.057
G. Regulatory Flexibility Act (RFA)
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, small entities
include small businesses, nonprofit organizations, and small
governmental jurisdictions. In addition, HHAs and home infusion therapy
suppliers are small entities, as that is the term used in the RFA.
Individuals and States are not included in the definition of a small
entity.
The North American Industry Classification System (NAICS) was
adopted in 1997 and is the current standard used by the Federal
statistical agencies related to the U.S. business economy. We utilized
the NAICS U.S. industry title ``Home Health Care Services'' and
corresponding NAICS code 621610 in determining impacts for small
entities. The NAICS code 621610 has a size standard of $16.5 million
\82\ and approximately 96 percent of HHAs and home infusion therapy
suppliers are considered small entities. Table F10 shows the number of
firms, revenue, and estimated impact per home health care service
category.
---------------------------------------------------------------------------
\82\ https://www.sba.gov/sites/default/files/2019-08/SBA%20Table%20of%20Size%20Standards_Effective%20Aug%2019%2C%202019_Rev.pdf.
---------------------------------------------------------------------------
Table F10--Number of Firms, Revenue, and Estimated Impact of Home
Health Care Services by NAICS Code 621610
[GRAPHIC] [TIFF OMITTED] TR04NO22.058
The economic impact assessment is based on estimated Medicare
payments (revenues) and HHS's practice in interpreting the RFA is to
consider effects economically ``significant'' only if greater than 5
percent of providers reach a threshold of 3 to 5 percent or more of
total revenue or total costs. The majority of HHAs' visits are Medicare
paid visits and therefore the majority of HHAs' revenue consists of
Medicare payments. Based on our analysis, we conclude that the policies
finalized in this rule would result in an estimated total impact of 3
to 5 percent or more on Medicare revenue for greater than 5 percent of
HHAs. Therefore, the Secretary has determined that this HH PPS final
rule will have significant economic impact on a substantial number of
small entities. We estimate that the net impact of the policies in this
rule is approximately $125 million in increased payments to HHAs in CY
2023. The $125 million in increased payments is reflected in the last
column of the first row in Table F5 as a 0.7 percent increase in
expenditures when comparing CY 2023 payments to estimated CY 2022
payments. The 0.7 percent increase is mostly driven by the impact of
the permanent behavior assumption adjustment reflected in the third
column of Table F5. Further detail is presented in Table F5, by HHA
type and location.
With regards to options for regulatory relief, we note that section
1895(b)(3)(D)(i) of the Act requires CMS to annually determine the
impact of differences between the assumed behavior changes finalized in
the CY 2019 HH PPS final rule with comment period (83 FR 56455) and
actual behavior changes on estimated aggregate expenditures under the
HH PPS with respect to years beginning with 2020 and ending with 2026.
Additionally, section 1895(b)(3)(D)(ii) and (iii) of the Act requires
that CMS make permanent and temporary adjustments to the payment rate
to offset for such increases or decreases in estimated aggregate
expenditures through notice and comment rulemaking. While we find that
the -7.85 percent permanent payment adjustment, described in section
II.B.2.c. of this final rule, is necessary to offset the increase in
estimated aggregate expenditures for CYs 2020 and 2021 based on the
impact of the differences between assumed behavior changes and actual
behavior changes, we will also continue to reprice claims, per the
finalized methodology, and make any additional adjustments at a time
and manner deemed appropriate in future rulemaking. As mentioned
previously,
[[Page 66886]]
we recognize that implementing the full permanent and temporary
adjustments to the CY 2023 payment rate may adversely affect HHAs,
including small entities. Therefore, due to the potential hardship of
implementing the full -7.85 percent at once, we find it would be more
appropriate to take half of the adjustment for CY 2023. Therefore, we
are finalizing a permanent prospective adjustment of -3.925 percent for
CY 2023. We solicited comments on the overall HH PPS RFA analysis and
received no comments.
Guidance issued by HHS interpreting the Regulatory Flexibility Act
considers the effects economically `significant' only if greater than 5
percent of providers reach a threshold of 3- to 5-percent or more of
total revenue or total costs. Among the over 7,500 HHAs that are
estimated to qualify to compete in the expanded HHVBP Model, we
estimate that the percent payment adjustment resulting from this rule
would be larger than 3 percent, in magnitude, for about 28 percent of
competing HHAs (estimated by applying the proposed 5-percent maximum
payment adjustment under the expanded Model to CY 2019 data). As a
result, more than the RFA threshold of 5-percent of HHA providers
nationally would be significantly impacted. We refer readers to Tables
43 and 44 in the CY 2022 HH PPS final rule (86 FR 62407 through 62410)
for our analysis of payment adjustment distributions by State, HHA
characteristics, HHA size and percentiles.
Thus, the Secretary has certified that this final rule would have a
significant economic impact on a substantial number of small entities.
Though the RFA requires consideration of alternatives to avoid economic
impacts on small entities, the intent of the rule, itself, is to
encourage quality improvement by HHAs through the use of economic
incentives. As a result, alternatives to mitigate the payment
reductions would be contrary to the intent of the rule, which is to
test the effect on quality and costs of care of applying payment
adjustments based on HHAs' performance on quality measures.
In addition, section 1102(b) of the Act requires us to prepare an
RIA if a rule may have a significant impact on the operations of a
substantial number of small rural hospitals. This analysis must conform
to the provisions of section 604 of RFA. For purposes of section
1102(b) of the Act, we define a small rural hospital as a hospital that
is located outside of a metropolitan statistical area and has fewer
than 100 beds. This rule is not applicable to hospitals. Therefore, the
Secretary has certified that this final rule would not have a
significant economic impact on the operations of small rural hospitals.
I. Unfunded Mandates Reform Act (UMRA)
Section 202 of UMRA of 1995 UMRA also requires that agencies assess
anticipated costs and benefits before issuing any rule whose mandates
require spending in any 1 year of $100 million in 1995 dollars, updated
annually for inflation. In 2022, that threshold is approximately $165
million. This final rule would not impose a mandate that will result in
the expenditure by State, local, and Tribal Governments, in the
aggregate, or by the private sector, of more than $165 million in any
one year.
J. Federalism
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. We have reviewed this final rule under these criteria of
Executive Order 13132, and have determined that it would not impose
substantial direct costs on State or local governments.
K. Conclusion
In conclusion, we estimate that the provisions in this final rule
will result in an estimated net increase in home health payments of 0.7
percent for CY 2023 ($125 million). The $125 million increase in
estimated payments for CY 2023 reflects the effects of the CY 2023 home
health payment update percentage of 4.0 percent ($725 million
increase), a 0.2 percent increase in payments due to the new lower FDL
ratio, which will increase outlier payments in order to target to pay
no more than 2.5 percent of total payments as outlier payments ($35
million increase) and an estimated 3.5 percent decrease in payments
that reflects the effects of the permanent behavior adjustment ($635
million decrease).
Chiquita Brooks-LaSure, Administrator of the Centers for Medicare &
Medicaid Services, approved this document on October 26, 2022.
List of Subjects in 42 CFR Part 484
Health facilities, Health professions, Medicare, and Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services amends 42 CFR chapter IV as follows:
PART 484--HOME HEALTH SERVICES
0
1. The authority citation for part 484 continues to read as follows:
Authority: 42 U.S.C. 1302 and 1395hh.
0
2. Section 484.220 is amended by adding paragraph (c) to read as
follows:
Sec. 484.220 Calculation of the case-mix and wage area adjusted
prospective payment rates.
* * * * *
(c) Beginning on January 1, 2023, CMS applies a cap on decreases to
the home health wage index such that the wage index applied to a
geographic area is not less than 95 percent of the wage index applied
to that geographic area in the prior calendar year. The 5-percent cap
on negative wage index changes is implemented in a budget neutral
manner through the use of wage index budget neutrality factors.
0
3. Section 484.245 is amended--
0
a. By revising paragraph (b)(1)(i);
0
b. In paragraph (b)(1)(iii) by removing the sentence ``Quality data
required under section 1895(b)(3)(B)(v)(ii) of the Act, including
HHCAHPS survey data.''; and
0
c. By adding paragraph (b)(3).
The revision and addition read as follows:
Sec. 484.245 Requirements under the Home Health Quality Reporting
Program (HH QRP).
* * * * *
(b) * * *
(1) * * *
(i) Data--
(A) Required under section 1895(b)(3)(B)(v)(II) of the Act,
including HHCAHPS survey data; and
(B) On measures specified under sections 1899B(c)(1) and
1899B(d)(1) of the Act.
* * * * *
(3) Measure removal factors. CMS may remove a quality measure from
the HH QRP based on one or more of the following factors:
(i) Measure performance among HHAs is so high and unvarying that
meaningful distinctions in improvements in performance can no longer be
made.
(ii) Performance or improvement on a measure does not result in
better patient outcomes.
(iii) A measure does not align with current clinical guidelines or
practice.
(iv) The availability of a more broadly applicable (across
settings, populations, or conditions) measure for the particular topic.
[[Page 66887]]
(v) The availability of a measure that is more proximal in time to
desired patient outcomes for the particular topic.
(vi) The availability of a measure that is more strongly associated
with desired patient outcomes for the particular topic.
(vii) Collection or public reporting of a measure leads to negative
unintended consequences other than patient harm.
(viii) The costs associated with a measure outweigh the benefit of
its continued use in the program.
* * * * *
0
4. Section 484.345 is amended--
0
a. In the definition of ``Achievement threshold'' removing the phrase
``during a baseline year'' and adding in its place the phrase ``during
a Model baseline year'';
0
b. By removing the definition of ``Baseline year'';
0
c. In the definition of ``Benchmark'' removing the phrase ``during the
baseline year'' and adding in its place the phrase ``during the Model
baseline year'';
0
d. By adding the definition of ``HHA baseline year'' in alphabetical
order;
0
e. In the definition of ``Improvement threshold'' removing the phrase
``during the baseline year.'' and adding in its place the phrase
``during the HHA baseline year.''; and
0
f. By adding the definition of ``Model baseline year'' in alphabetical
order.
The additions read as follows:
Sec. 484.345 Definitions.
* * * * *
HHA baseline year means the calendar year used to determine the
improvement threshold for each measure for each individual competing
HHA.
* * * * *
Model baseline year means the calendar year used to determine the
benchmark and achievement threshold for each measure for all competing
HHAs.
* * * * *
0
5. Section 484.350 is amended by revising paragraph (b) and adding
paragraph (c) to read as follows:
Sec. 484.350 Applicability of the Expanded Home Health Value-Based
Purchasing (HHVBP) Model.
* * * * *
(b) New HHAs. A new HHA is certified by Medicare on or after
January 1, 2022. For new HHAs, the following apply:
(1) The HHA baseline year is the first full calendar year of
services beginning after the date of Medicare certification.
(2) The first performance year is the first full calendar year
following the HHA baseline year.
(c) Existing HHAs. An existing HHA is certified by Medicare before
January 1, 2022 and the HHA baseline year is CY 2022.
Sec. 484.370 [Amended]
0
6. Section 484.370(a) is amended by removing the phrase ``Model for the
baseline year, and CMS'' and adding in its place the phrase ``Model,
and CMS''.
Dated: October 26, 2022.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2022-23722 Filed 10-31-22; 4:15 pm]
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