To help you better understand and prepare for these Proposed changes to Cms Guidelines for home health, we’re offering a detailed, three-part guide to the 2022 Proposed Rule. Read on for the first part, which explores the proposed payment update. And check back in the weeks to come for parts two and three, which will detail changes to HHQRP, the proposed expansion of the HHVBP model, and CoP changes to home health aide supervision requirements.

Proposed changes to CMS guidelines for home health in 2021: Payment update

The proposed changes to CMS guidelines for home health in CY 2022 represent a simple inflation rate update, a continuation of the current behavioral assumption payment adjustment, recalibration of the PDGM case-mix weights, functional levels, and comorbidity adjustment subgroups using CY 2020 data, no changes to the current LUPA thresholds, a continuation of the scheduled phasing-out of the rural add-on, and continuation of outlier payment standards.

CMS estimates payments will increase in the aggregate by 1.7% or $310 million based on the proposed policies. This increase reflects the effects of a proposed 1.8 percent payment update ($330 million increase) and a 0.1 percent decrease in payments ($20 million decrease) due to reductions made in the rural add-on percentages mandated for 2022, and in the final year of phase out.

Not surprisingly, CMS is proposing a continuation of the current behavioral assumption payment adjustment and provided a detailed method on how it analyzed the difference between assumed and actual behavioral changes despite limitations in data during the PHE.

Defying hope to the contrary, CMS is also proposing to recalibrate the PDGM case-mix weights, functional impairment levels and comorbidity adjustment subgroups using CY 2020 claims data, which continues to be a concern in the industry that the use of claims data from the height of the pandemic in CY 2020 will not accurately reflect care delivery in CY 2022. CMS seems to acknowledge this concern by not proposing any changes to the current LUPA thresholds for 2022. Therefore, many are awaiting the final rule with the continued hope that CMS will withdraw its proposal to recalibrate PDGM case mix weights and adjustments until more accurate and representative data can be analyzed.

The rural add-on phase-out continues in its final year for 2022, with high-utilization areas receiving no add-on, low density population areas receiving a one percent add-on, and all other areas receiving no add-on. And as a reminder, the area wage index that applies based on the patient’s residence had already changed significantly in 2021 to reflect updated census information. Due to the significant changes, CMS capped any reduction in the wage index for 2021 at five percent; however, the cap will be lifted in CY 2022 and the full impact of those CY 2021 changes will be experienced for any home health agencies (HHAs) who are subject to a reduction beyond the cap

Proposed changes to CMS guidelines for home health also include a payment update for home infusion therapy services. Specifically, CMS is proposing to update the geographic adjustment factors used for wage adjustment, and to maintain the current percentages for both the initial and subsequent visit policy.

Join us next week for more info on proposed changes to CMS guidelines for home health

That’s not all—there’s much more to the CMS CY 2022 Home Health Proposed Rule that we’ll be exploring in the rest of our series. Join us next week for Part 2 on HHQRP changes and HHVBP model expansion, and the week after that for CoP changes to home health aide supervision requirements.

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