CMS to Expand Home Health Value-Based Purchasing Model

CMS is planning to expand a value-based purchasing model that rewards home health agencies for high-quality care and saves Medicare money.

The federal agency announced on Jan. 8 via email that it intends to expand the Home Health Value-Based Purchasing Model (HHVBP) through rulemaking beginning no sooner than Jan. 1, 2022. The model is currently implemented in nine states and has resulted in an average 4.6 percent improvement in home health agency quality scores and $141 million in Medicare savings annually.

“The CMS Office of the Actuary has certified, based on its independent assessment of the model’s performance over the first three years of the Model, that an expansion would reduce, or not result in any increase in, net Medicare spending,” CMS said in the announcement.

“The Secretary has also determined that an expansion of the HHVBP Model would likely improve quality of care for Medicare beneficiaries, without denying or limiting coverage or provision of benefits to Medicare beneficiaries,” the agency added.

The HHVBP Model has been part of the federal government’s overall shift from volume to value-based care since 2016 when CMS implemented the program to incent home health agencies to improve care quality and reduce Medicare spending.

The Model is mandatory in select states – Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee, and Washington – where payments for Medicare-certified home health agencies are adjusted based on quality performance relative to peers in the state.

Home health agencies participating in the model, for example, earned a maximum three percent Medicare payment adjustment (upwards and downwards) in 2018 based on total performance across 20 quality measures, including emergency department use without hospitalization, oral medication management, and acute care hospitalizations within first 60 days of home health care.

CMS has increased the maximum positive and negative payment adjustment annually, with the maximum adjustment reaching six percent during most recent performance period.

In 2022, the agency plans to increase the maximum positive and negative payment adjustment to eight percent.

The HHVBP Model has been associated with modest improvements in certain quality measures, modest declines in some but not all aspects of utilization, and an overall reduction in Medicare spending, compared to home health agencies in non-Model states, according to an evaluation report through the 2018 performance period.

The evaluation conducted by Arbor Research Collaborative for Health and L&M Policy Research also found somewhat greater gains in functional improvement among home health patients in HHVBP states and declines in unplanned hospitalizations and skilled nursing facility use among fee-for-service beneficiaries receiving home health care.

The Model, however, was associated with somewhat greater increases in emergency department use among fee-for-beneficiaries receiving home health care.

Based on the results, CMS determined that the HHVBP Model met the “gold standard for expansion as laid out by Congress,” CMS Innovation Center Director Brad Smith said in a recent press release.

Congress requires Innovation Center models to reduce spending without reducing quality of care or improve quality of care without increasing spending in order to qualify for expansion. The Chief Actuary of CMS must also certify any expansion of a model would reduce or not increase net program spending.

CMS leaders also believe the Model’s expansion can impact care delivery during the COVID-19 pandemic.

“The Coronavirus pandemic has tragically illustrated how important it is for elderly Americans to have a robust set of options outside of nursing homes,” said CMS Administrator Seema Verma. “Nursing homes will always be an important part of the care continuum – especially for those who need an intensive level of care – but home health services are often preferred by seniors. Expansion of this model would improve the overall value and quality of that home health care – and seniors stand to benefit.”

CMS did not clarify in the press release how it intends to expand the HHVBP Model.