CMS expanding home health value-based purchasing model nationwide in January 2022

Home health senior nurse
The Centers for Medicare & Medicaid Services issued a proposed rule Monday that accelerates the shift from paying for home health services based on volume to a system that gives incentives to home health agencies for higher quality care. (KatarzynaBialasiewicz/Getty)

The Biden administration is expanding a value-based purchasing model it says rewards home health agencies for high-quality care and saves Medicare money.

The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule Monday that accelerates the shift from paying for home health services based on volume to a system that gives incentives to home health agencies for higher quality care.

The CY 2022 Home Health Prospective Payment System (HH PPS) proposed rule outlines nationwide expansion of the home health value-based purchasing (HHVBP) model, which was developed as a pilot by CMS' innovation arm and began in January 2016.

The model incentivizes quality of care improvements without denying or limiting coverage or provision of Medicare benefits for all Medicare consumers and includes updates to payment rates and policies under the HH PPS.

The proposed regulation addresses challenges facing Medicare beneficiaries who receive healthcare at home. 

“Homebound Medicare patients face a unique set of challenges and barriers to getting the care they need,” said CMS Administrator Chiquita Brooks-LaSure in a statement. “Today’s announcement is a reaffirmation of our commitment to these older adults and people with disabilities who are counting on Medicare for the health care they need. This proposed rule would streamline service delivery and value quality over quantity—at a time when Americans need it most.”

The Center for Medicare and Medicaid Innovation (CMMI) developed the model to determine whether payment incentives for providing better quality of care with greater efficiency would improve the quality and delivery of home health care services to people with Medicare. The HHVBP model’s current participants comprise all Medicare-certified home health agencies, providing services across nine randomly selected states. An evaluation report of the participants’ performance from 2016 to 2018 showed an average 4.6% improvement in  Medicare-certified home health agencies' quality scores and an average annual savings of $141 million to Medicare.

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CMS is proposing to expand the HHVBP model nationwide effective Jan. 1, 2022. By expanding the HHVBP model, CMS seeks to improve the beneficiary experience by providing incentives for Medicare-certified home health agencies to provide better quality of care with greater efficiency.

Brad Smith, the former head of the CMMI, recently highlighted the HHVBP model as one of the agency's more successful value-care care and payment initiatives. 

"We had a number of quality metrics, and what we believed is that those quality metrics and incentivizing them was tied to a decrease in hospitalization and that is exactly what we saw,” Smith said.

The rule also seeks feedback on ways to attain health equity for all patients through policy solutions, including enhancing reports on Medicare/Medicaid dual-eligibles, disability status and people who are LGBTQ+; religious minorities; people who live in rural areas and people otherwise adversely affected by persistent poverty or inequality.

The proposed rule would improve the home health quality reporting program by removing or replacing certain quality measures to reduce burden and increase focus on patient outcomes, according to CMS officials. 

CMS would also begin collecting data on two measures promoting coordination of care in the home health quality reporting program effective Jan. 1, 2023, as well as measures under long-term care hospital and inpatient rehabilitation quality reporting programs effective Oct. 1, 2022.