Temporary Retrospective and Permanent Prospective Adjustment

CMS originally proposed a -7.69% permanent adjustment to the CY2023 base payment rate in addition to a temporary adjustment of $2 billion to reconcile retrospective overpayments from the first two years of PDGM. In the final rule, CMS is finalizing a -3.925% behavioral adjustment to the CY2023 national, standardized 30-day period payment.

Additionally, CMS agreed with commenters that recent higher inflationary trends impacted were impacting home health services. Based on requests from commenters like LeadingAge, CMS reviewed updated forecast of prices and adjusted projections to a 4.1 percent market basket with -0.1 productivity adjustment. CMS finalized CY2023 final home health payment update of 4 percent instead of the proposed 2.9 percent.

The final aggregate adjustment to home health payments in CY2023 will be a .7% or $125 million increase compared to CY2022.

This increase reflects the effects of the proposed 4% home health market basket update ($725 million increase), an estimated 3.5% decrease that reflects the effects of the proposed prospective, permanent behavioral assumption adjustment of -3.925% ($635 billion decrease), and an estimated 0.2% increase that reflects the effects of a proposed update to the fixed-dollar loss ratio (FDL) used in determining outlier payments ($35 million increase).

LeadingAge will continue to synthesis CMS’ response to our arguments and concerns regarding the current methodology. An article exploring the issues from this section will be forthcoming.

TABLE 17: FINAL CY 2023 NATIONAL, STANDARDIZED 30-DAY PERIOD PAYMENT AMOUNT (PG. 141)

 For HHAs that do not submit the required quality data for CY 2023, the home health payment update would decrease by 2 percentage points.

TABLE 19: FINAL CY 2023 NATIONAL PER-VISIT PAYMENT AMOUNTS (PG. 143)

 Reassignment of PDGM Diagnosis Codes (PG. 57)

CMS finalized the following changes to clinical groupings and comorbidity subgroups:

• Reassigned B78.9 (strongyloidiasis, unspecified) to clinical group K (Infectious Disease, Neoplasms, and Blood-Forming Diseases)
• Reassigned N83.201 (unspecified ovarian cyst, right side) to clinical group J (Gastrointestinal Tract and Genitourinary System)
• Removal of 155 ICD-10-CM diagnosis codes from being accepted as the principal diagnosis to “no clinical group” since each has another ICD-10-CM code which more clearly specified the diagnosis. Four codes in the origional reassignment list will be reassigned to other diagnosis groups:
  • Reassign H20.9 (unspecified iridocyclitis) to clinical group A (MMTA-other)
  • Reassign M50.00 (cervical disc disorder with myelopathy, unsp cervical region) to clinical group E (Musculoskeletal Rehabilitation)
  • Reassign M70.91 (Salpingitis, unspecified) to clinical group A (MMTA-other)
  • Reassign M70.92 (Oophoritis, unspecified) to clinical group A (MMTA-other)
• Reassigned 144 gout-related ICD-10-CM diagnosis codes to clinical group E (Musculoskeletal Rehabilitation)
• Reassigned 12 ICD-10-CM diagnosis codes related to crushing injury of the face, skull, and head (listed on page 53) to clinical group B (Neurological Rehabilitation)
• Reassigned 3 ICD-10-CM diagnosis codes related to lymphedema (listed on page 53) to clinical group C (Wounds)
• Reassigned ICD-10-CM diagnosis code F60.5 (obsessive-compulsive personality disorder) to comorbidity subgroup behavioral 5 (Phobias, Other Anxiety and Obsessive-Compulsive Disorders) when listed as a secondary diagnosis
• Assigned ICD-10-CM diagnosis code Q82.0 (hereditary lymphedema) to circulatory 10 (Varicose Veins and Lymphedema) when listed as a secondary diagnosis
• Reassigned diagnosis codes C74.00 (malignant neoplasm of cortex of unspecified adrenal gland) and C74.90 (malignant neoplasm of unspecified part of unspecified adrenal gland) from “NA” to neoplasm 15 (malignant neoplasm of adrenal gland, endocrine glands and related structures) when listed as secondary diagnoses
• Reassigned diagnosis code J18.2 (hypostatic pneumonia, unspecified organism) to respiratory 2 (whooping cough and pneumonia) when listed as a secondary diagnosis
• Reassigned diagnosis codes J98.2 (interstitial emphysema) and J98.3 (compensatory emphysema) to respiratory 4 (bronchitis, emphysema, and interstitial lung disease) when listed as a secondary diagnosis
• Reassigned diagnosis code U09.9 (post COVID-19 condition, unspecified) to respiratory 10 (2019 novel Coronavirus) when listed as a secondary diagnosis
• Reassign 11 ICD-10-CM diagnosis codes related to malignant neoplasms of the upper respiratory tract to neoplasm 1 (Malignant neoplasms of lip, oral cavity, and pharynx, including head and neck cancers) when listed as secondary diagnoses

CMS also finalized a new comorbidity subgroup for certain neurological conditions related to non-diabetic neuropathy. This new subgroup will have 18 ICD–10–CM diagnosis codes and be named neurological 12 (nondiabetic neuropathy).

These can be reviewed in the CY 2023 Final Home Health Clinical Group and Comorbidity Adjustment Diagnosis List supplemental file here.

Finalized Permanent Cap on Home Health Wage Index Decreases (PG. 130)

For CY2023 and subsequent years, CMS finalized a permanent 5-percent cap on any decreases to a geographic area’s wage index from its wage index in the prior year, regardless of the circumstances causing the decline.

CMS provided an estimate of the impact to payments for providers in CY2023 based on this policy change in the CY 2023 Final HH PPS Wage Index supplemental file here and stated they would examine the proposed policy’s effects on an ongoing basis.

Finalized CY2023 PDGM LUPA Thresholds and PDGM Case-Mix Weights (PG.75)

CMS finalized the Low Utilization Payment Adjustment (LUPA) thresholds for CY 2023 located in table 16. CMS did not find much variation in the updated LUPA thresholds.

• 280 case-mix groups had no change in their LUPA threshold
• 120 case-mix groups had their LUPA threshold go down by one visit
• 18 case-mix groups had their LUPA threshold go up by a visit
• 12 case-mix groups had their LUPA threshold go down by two visits
• 2 case-mix groups had their LUPA threshold go down by three visits

The proposed LUPA thresholds for the CY2023 PDGM payment groups with the corresponding Health Insurance Prospective Payment System (HIPPS) codes and the case-mix weights are available in the CY 2023 Final Home Health PDGM Case Mix Weights and LUPA Thresholds supplemental file here.

To ensure the changes to the PDGM case-mix weights are implemented in a budget neutral manner, CMS applied a case-mix weights budget neutrality factor to the CY2022 national, standardized 30-day period payment rate. The proposed case-mix weights budget neutrality factor for CY2023 is 0.9895, calculated using CY2021 claims data.

Finalized Functional Impairment Level Changes (PG. 78)

For CY2023, CMS finalizes the updated OASIS functional points as proposed (table 11) and the functional impairment levels by clinical group (table 12) as proposed.

Finalized Comorbidity Adjustment Subgroup Changes (PG. 84)

For CY 2023, CMS proposes to use the same methodology used to establish the comorbidity subgroups to update the comorbidity subgroups using CY2021 home health data. The comorbidity subgroups for CY2023 reflect the proposed coding changes detailed above and include:

• 22 low comorbidity adjustment subgroups as identified in Table 13 (PGS. 85-86)
• 91 high comorbidity adjustment interaction subgroups as identified in Table 14 (PGS. 86-92)

This final number reflects changes from the reclassification of diagnosis codes discussed above. A full review of these adjustments, including the updated diagnosis codes in each subgroup, is available here.

Fixed-Dollar Loss (FDL) Ratio Changes for Outlier Payments (PG. 148)

CMS finalized a FDL ratio of 0.35 for CY 2023. This is a .09% change from the origional proposal in which CMS said they would update the final ratio once they had more complete CY2021 claims data.

Collection of Data on Use of Telecommunications Technology under Medicare Home Health Benefit (PG. 149)

CMS solicited comments on the collection of telecommunication technology data on home health claims including 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 (CMS 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).

Commenters were generally supportive of the collection of this data.

CMS reiterated that 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. CMS plans 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.

Changes to Home Health Quality Reporting Program (HHQRP) (PG. 159)

All Payer OASIS

After consideration of the public comments CMS received, they are finalizing the End of the Suspension of OASIS Data Collection on non-Medicare/non-Medicaid HHA Patients. However, based on the comments of LeadingAge and others to delay the implementation until 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.

CMS clarified that 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. CMS acknowledges that the collection of the non-Medicare/non-Medicaid OASIS data could change the mesure results for HHAs but CMS believes it is in the public interest to collect data on all patients.

CMS included statutorily required cost estimates for expanding the collection of OASIS for all home health patients regardless of payer on pages 203-209.

Technical Changes to HHQRP

CMS also finalized the following technical changes to HHQRP regulations:

• Amending § 484.245(b)(1)(iii) to state, “For the purposes of this HHCAHPS survey data submission, the following additional requirements apply:”
• Moving quality data required under section 1895(b)(3)(B)(v)(II) from § 484.245(b)(1)(iii) to § 484.245(b)(1)(i) and the change would state, “Data on measures specified under sections 1895(b)(3)(B)(v)(II), 1899B(c)(1), and 1899B(d)(1) of the Act.”
• Amending 42 CFR 484.245 to add eight HHQRP measure removal factors finalized in CY2019 HH PPS final rule.

Request for Information on Health Equity (PG. 172)

Comments on this request for information on health equity were consistent with LeadingAge’s comments including:

• 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.
• 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.
• Commenters suggested CMS provide funding to address health equity issues and additionally consider supporting trainings for providers.

CMS and their contractor, Abt Associates, announced the recuritment of stakeholders to participate in a Technical Expert Panel (TEP) to provide input on a proposed health equity structural composite measure for both hospice and home health care settings. This TEP has already begun its work and is expected to finalize its recommendations in 2023. If you have general questions about the TEP and would like to contact Abt Associates, please email HHA_Hospice_HealthEquityTEP@abtassoc.com.

Finalized Changes to Expanded Home Health Value Based Purchasing Model (PG. 181)

CMS finalized its changes to the term baseline year with the terms HHA baseline year and Model baseline year. New definitions:

• HHA baseline year as the calendar year used to determine the improvement threshold for each measure for each individual competing HHA.
• Model baseline year as the calendar year used to determine the benchmark and achievement threshold for each measure for all competing HHAs.

CMS also finalized the proposal to change the baseline HHVBP year from CY2019 to CY2022 for the performance year starting in CY2023. This decision reflects the continuing effects of the COVID-19 public health emergency (PHE) and reflects changes in historical trends of two claims-based measures in the set (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).

One concern LeadingAge voiced in our comment letter was the delay in the CY2022 baseline data. CMS initially stated they would not anticipate providing agencies with the final achievement thresholds and benchmarks until the July 2023 interim performance report (IPR). In finalizing the change to the baseline year, CMS plans to make the most current HHA specific performance data for the applicable measures available to each HHA in iQIES. CMS intends for this to include current performance relative to other HHAs nationally, and those in each agencies assigned cohorts, 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.

CMS requested comments on whether they should consider incorporating adjustments into the expanded HHVBP Model to reflect the varied patient populations that agencies serve around the country and tie health equity outcomes to the payment adjustments they make based on agency performance under the Model. Comments on this request for information were consistent with LeadingAge’s comments including:

• 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.

CMS plans to take this feedback into consideration in future rulemaking.

Home Infusion Therapy Payment Rates CY2023 (PG. 201)

CMS finalized the decision to no longer include a section in the HH PPS rule on home infusion therapy if no changes are being propose to the payment methodology. Instead, the rates will be updated each year in a Change Request and posted on the CMS website. The CY 2023 final geographic adjustment factor (GAFs) will be posted as an addendum on the PFS website at https://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeeSched.

Additional information regarding the final rule and potential future cuts will be posted along with advocacy alerts supporting legislation to pause the CY2023 finalized cuts. Please reach out to Katy Barnett with any questions, kbarnett@leadingage.org.