The Centers for Medicare and Medicaid Services is launching a value-based reimbursement pilot program for Medicare home health care agencies. The model is part of the 2016 Home Health Prospective Payment System proposed rule, which was published in the Federal Register on Friday. 

“The model leverages the successes of and lessons learned from other value-based purchasing programs and demonstrations—including the Hospital Value-Based Purchasing Program and the Home Health Pay-for-Performance and Nursing Home Value-Based Purchasing Demonstrations,” the agency said.

CMS will increase or decrease the amount reimbursed for services depending on quality performance. Payment adjustments will start at five percent and will increase to eight percent in later years. According to the proposed rule, the goals of the incentive program are to improve the patient experience and quality of care and to weed out poorly performing home health agencies.

Certified home health agencies are required by CMS to have an outside firm survey the patients they care for through the Home Health Care Consumer Assessment (HHCCA) and submit other quality data through the Outcome and Assessment Information Set (OASIS). The rule proposes 25 quality measures for performance assessment, all of which are currently reported through HHCAA and OASIS. There are 15 outcomes and 10 process measures.

Nine states were randomly selected to be part of the pilot program; the proposed states are Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee and Washington. CMS is receiving comments on the proposed rule until September 4, 2015.

Our Take: So accountable care is finally coming to home heath. Everyone in the industry knew this was coming, as the Affordable Care Act directs CMS to develop a plan to implement value-based purchasing. We have been encouraging home health agencies for some time to partner with ACOs and become part of the value stream. 

In reading through the proposed rule, it feels very ACO-like. The challenge for home health agencies may lie with quality reporting on new metrics not being tracked by agencies. The new metrics that CMS is proposing make intuitive sense, but they will add to the operational burden (read:cost) of providing care. They include:

  • Adverse event reporting for improper medication administration and/or side effects
  • Influenza vaccination coverage for home health care personnel
  • Whether the patient has received a shingles (herpes zoster) vaccination
  • Whether the patient has an advanced care plan or has named a surrogate decision maker

What this means for home health agencies is clear and is part of CMS’ stated objectives: weaker providers without the technology and other means to keep costs in line and quality under control will go out of business. There are more than 12,000 Medicare-certified home health agencies today. Expect that less than half will survive in the form we know it by 2018, with the fastest decline in pilot states.

Of interest: this week we learned that one diversified home health provider has rolled out its first visiting physicians service—providing patients with physician and nurse-practitioner level care in the home—and intends to expand the service into the rest of its target markets. This same company has proven to be a technology leader and innovator in other ways.

Sounds like they’re headed down the right path.

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