Table of Content
In the CY 2022 HH PPS final rule , 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. 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. 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 of the Act.
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 , 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. In the CY 2022 HH PPS final rule , 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.
Medicare Fee-For-Service Post-Acute Care and …
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 without modification. 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.
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. 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 and 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. An episode to determine whether the claim will receive an outlier payment and the amount of payment for an episode of care.
Clinician Estimated Hourly Burden for All HHAs for OASIS-E DC Assessments = 4,534,626 Hours
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. The Department of Health and Human Services 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. Based on the data, LUPAs appeared most likely to occur in the second period under PDGM.
We refer readers to Table 1.A of the CY 2023 Proposed Reassignment of ICD-10-CM Diagnosis Codes supplemental file for the list of the 159 unspecified diagnosis codes. 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.
B. Changes to the Baseline Years and New Definitions
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 does not specify which arm has the fracture; whereas, S59.101A 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” .
Currently, LUPA occurs when there are four or fewer visits during a 60-day episode of care. Under PDGM, the LUPA threshold will vary by HHRG and will be based on the 30 days of care. Perhaps the easiest way to avoid a LUPA is to know what the thresholds are right up front. One of the biggest factors on avoiding LUPA is to have accurate diagnosis coding and OASIS review.
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. 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 the CY 2019 HH PPS final rule with comment period , 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 .
After consideration of the public comments received, we are finalizing our proposal as proposed. HHAs attest as to whether equity-focused factors were included in the hiring of direct patient care staff in the applicable reporting year. 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. There are significant differences between private pay and Medicare/Medicaid patients in terms of diagnosis, patient characteristics, and patient outcomes.
Next, each 30-day period is assigned to a functional impairment level 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 . Of the proposed 159 ICD-10-CM diagnosis codes, 85 percent lacked information about location while the remaining 15 percent 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.
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. 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 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 is also part of the national, standardized 30-day period rate. Durable medical equipment provided as a home health service, as defined in section 1861 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.
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.
By the Numbers: Breaking Down Home Health LUPA Patterns
The proposed recalibrated case-mix weights were updated based on more complete CY 2021 claims data for this final rule. With regard to therapy, CMS received comments in the CY 2022 HH PPS final rule 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, the National Association for Home Care and Hospice was quoted as saying “categorically, across the board, we're going to reduce our therapy services” as a result of the PDGM.
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