QIRT’s CY 2016 Final Rule Highlights


CY 2016 Final Rule Highlights

CY 2016 Final Rule has been released as of November 5, 2015. CMS is continuing with year three (of four) of the HH PPS payment and case-mix rebasing, introducing a home health value based purchasing model for select states and introducing a new quality measure. In addition, several payment model options are being considered by CMS for future implementation: Diagnosis on Top Model, Predicted Therapy Model, and Home Health Groupings Model.

Year three of payment and case-mix readjustment is upon us, which will find the national standardized 60-day episode amount for home health agency payments reduced by 0.97% for years 2016, 2017, and 2018, instead of the projected 1.72%. Overall, the 60-day episode payment amount will be reducing by $80.95, the per-visit amount will be increasing by 3.5%, and the non-routine supply reimbursement will be decreasing by 2.82%. Case-mix weights are being computed via 120 point-giving variables for CY 2016 versus the 124 point-giving variables currently in use. CMS added eight variables and dropped four. 24 variables have an increase in point values, 38 have a decrease in point values, and 54 variables will maintain the same point values.

Some more specific point changes:

  • Blood disorders are losing one point in later episode with high therapy.
  • Cancer diagnoses are losing one point in early and late episodes with high therapy.
  • Diabetes is losing one point in early episode with high therapy and gaining three points in later episode with high therapy.
  • Dysphagia and Neuro 3 diagnoses are gaining one point in early episode with low therapy visits.
  • Dysphagia with M1030 marked 3 has the following changes: lost one point in early episode with low therapy, gained one point in late episode with low therapy, and gained three points in both early and later episodes with high therapy.
  • GI disorders with M1630 marked 1 or 2 gain six points in a later episode with high therapy.
  • GI disorders AND Neuro 1, Neuro 2, Neuro 3, or Neuro 4 diagnoses in primary or other diagnosis will gain one point in the later episode with low therapy visits.
  • Brain disorders and paralysis with M1840 marked 2 or more are gaining two points with high therapy visits in both early and later episodes.
  • Brain disorders and paralysis OR Neuro 2 with M1810 or M1820 marked 1, 2, or 3 will lose one point in the later episode with high therapy visits.
  • Stroke diagnoses as primary or other diagnosis will lose one point in an early episode with high therapy and gain 7 points in a later episode with high therapy visits.
  • Stroke and M1810 or M1820 marked with 1, 2, or 3 will gain one point in an early episode with high therapy visits and lose 8 points in a later episode with high therapy visits.
  • MS and either M1830, M1840, M1850, or M1840 are gaining two points in early episode with high therapy and losing three points in later episode with high therapy.
  • Ortho 1 or Ortho 2 diagnoses and M1030 points are changing in both early and late episodes with low and high therapy utilization.
  • Skin 1 diagnoses, which includes traumatic wounds, burns and postoperative complications will be losing one point in early, low therapy episodes when primary diagnosis; losing two points in an early episode with high therapy visits; and when other diagnosis, will gain one point in an early, high therapy episode; gain one point in a later, low therapy episode; and lose two points in the later, high therapy episode.
  • Tracheostomy diagnosis is losing one point in an early and later episode with low therapy visits, losing two points in an early, high therapy episode, and gaining six points in a later episode with high therapy visits.

The following OASIS items will have a point change:

OASIS item 1 or 2 1 or 2 3+ 3+
0-13 14+ 0-13 14+
M1030 1 or 2 -1 -1
M1030 – 3 – 2
M1308 + 1 +1 +1
M1324 – 1 or 2 + 1 + 1
M1324 = 3 or 4 – 1 + 1
M1334 – 2 – 9
M1334 – 3 – 1 – 1
M1342 – 2 + 1 + 1 – 1 – 1
M1342 – 3 + 1 + 1 – 3
M1400 – 2, 3, 4 – 1 -2
M1620 – 2 to 5 – 1
M1630 – 1 or 2 + 1 – 1 – 4
M1810 or 1820 – 1, 2, 3 – 1
M1830 – 2 or more – 1
M1840 = 2 or more + 1 + 1 – 2
M1850 – 2 or more – 2 – 1 – 1
M1860 – 1, 2, 3 + 1
M1860 – 4 or more + 1 – 1

CY 2016 Clinical and Functional Thresholds

Items underlined indicate the requirement points increased, and BOLD indicates point requirement decreased from CY 2015 Final Rule.

1st and 2nd episodes 3rd+ episodes All episodes
0 to 13 therapy 14-19 therapy 0-13 therapy 14-19 therapy 20+ therapy
Dimension Severity Level
Clinical C1 0 to 1 0 to 1 0 0 to 3 0 to 3
C2 2 to 3 2 to 7 1 4 to 12 4 to 16
C3 4+ 8+ 2+ 13+ 17+
Functional F1 0 to 14 0 to 6 0 to 6 0 0 to 2
F2 15 7 to 13 7 to 10 1 to 7 3 to 6
F3 16+ 14+ 11+ 8+ 7+

The Home Health Value-Based Purchasing (HHVBP) Model is being implemented as an incentive model beginning January 1, 2016. The expectation is that by tying quality to payment, the beneficiaries will experience improved quality of care and outcomes. Payments will reward improved quality and penalize poor performance. In other words, the program will link quality performance to payment.

Let’s take a look at what data will be used to determine quality performance and what percentage of payment will be incentivized. CMS has set two goals. First, approximately 30-percent of traditional, fee-for-service Medicare payments will be tied to quality or value-based payments through alternative payment models by the end of 2016, and 50 percent of payment will be tied to these models by the end of 2018. Second, 85 percent of all traditional payments will be tied to quality or value by 2016 and 90 percent by 2018. A similar model is already in use for hospital reimbursement; CMS is using the hospital model as a guideline to implement the program in the home health industry. Several participation requirements have been set in place for participation.

All Medicare-certified HHAs in randomly selected states will be required to participate with implementation occurring over five performance years, beginning January 1, 2016 through December 31, 2020. The specific goals of the HHVBP model are to 1) incentivize HHAs to provide better quality care with greater efficiency, 2) study new potential quality and efficiency measures for appropriateness in the home health setting, and 3) enhance current public reporting processes. Payment adjustments will be based on quality performance, which is measured by achievement and improvement through quality measures. If the HHA demonstrates they can deliver higher quality of care, their payment for each episode of care could be adjusted higher. Alternatively, HHAs not performing as well, when compared to the other agencies of same size in the same state, could have their payment adjusted down. Payment adjustment would depend on the level of quality achieved or improved.

HHAs in each of the following randomly selected states could be required to compete in the HHVBP model: Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska, and Tennessee. Each competing HHA will receive its own payment adjustment report viewable only to that HHA. The report will focus on the payment adjustment percentage and include an explanation of when the adjustment would be applied and how the adjustment was determined relative to performance scores.

Initially, CMS proposed 10 process measures (process measures evaluate the rate of HHA use of specific evidence-based processes of care based on the evidence available) and 15 outcome measures (outcome measures illustrate the end result of care delivered to HHA patients), plus the 4 new measures being introduced in 2016 to be reported by agencies included in the HHVBP Model. The new measures include one outcome measure: Adverse Event for Improper Medication Administration and/or Side Effects, and three process measures: Influenza Vaccination Coverage for Home Health Care Personnel, Herpes Zoster (shingles) vaccination, and Advanced Care Planning.

In the Final Rule 2016, CMS indicated of the measures proposed, the starter set of measures will only include 6 process measures, 10 outcome measures, 5 Home Health Care Consumer Assessment of Healthcare Providers and Systems Survey (HHCAHPS), and three New Measures. Please find the list of all included measures in Table 4a: Final PY1 Measures in the Final Rule. Several items are not being included on the starter set and these include Timely Initiation of Care, Pressure Ulcer Prevention and Care, Multifactor Fall Risk Assessment Conducted for All Patients who can Ambulate, Depression Assessment Conducted, and Adverse Event for Improper Medication Administration and/or Side Effects (New Measures). The New Measures are not currently reported to CMS, but agencies will be required to submit data through a dedicated HHVBP web-based platform. The platform will function as a means to collect and distribute information from and to competing HHAs. HHAs will be required to submit additional data on quality, resource use, and other measures required, and for CY 2019 and beyond, the standardized patient assessment data. If this data is not submitted appropriately, the HHA’s payment will be reduced by a pre-determined amount.

There are currently six National Quality Strategy (NQS) domains, which CMS is realigning into four: Clinical Quality of Care will measure the quality of health care services provided by eligible professionals and paraprofessionals within the home health environment, Outcome and Efficiency will measure the end result of care provided to the beneficiary, Person and Caregiver-Centered Experience measures the beneficiary and their caregivers’ experience of care, and New Measures are those not currently reported by Medicare HHAs to CMS, but that may fill in the current information gaps. Vaccination Coverage for Home Health Care Personnel for Influenza and Herpes Zoster, also called Staff Immunizations, are being implemented for the HHVBP models so CMS can study the measure in the home health setting. Home health is one of the only remaining settings for which this measure has not been endorsed. HHAs will not be scored on immunization rates for health personnel but will receive credit for simply reporting the data related to staff immunizations.

CMS has indicated that selecting quality measures is a priority in all quality reporting programs. Any measure selected will address measure domains as specified in the IMPACT Act and align with CMS Quality Strategy, which uses three broad aims of the National Quality Strategy: Better Care, Healthy People, and Affordable Care.

The IMPACT Act requires a quality measure to address skin integrity and changes in skin integrity in the home health setting by January 1, 2017. Pressure ulcers are high-volume and high-cost adverse events in post-acute settings, with an estimated cost of $11 billion annually and between $500 and $70,000 per individual pressure ulcer. With implementation of OASIS C1-ICD/1, a new item M1309 was added to collect data on new and worsened pressure ulcers in home health patients. The item is used for risk adjustment, calculation of the quality measure (NQF #0678, Percent of Residents or Patients with Pressure Ulcers that are New or Worsened-short stay), payment reimbursement, and non-routine supply (NRS) reimbursement. An update to M1309 has been finalized in which providers will be held accountable for the development of unstageable pressure ulcers and suspected deep tissue injuries. Additionally, body mass index should be used as a covariate for risk-adjustment in home health as it is used for other post-acute care settings. CMS stated they plan to update the OASIS Guidance Manual and release additional information well in advance of the changes being implemented in 2018.

Four future, cross-setting measure constructs potentially meet requirements of the IMPACT domains of: 1) all-condition risk-adjusted potentially preventable hospital readmission rates; 2) resource use, including total estimated Medicare spending per beneficiary; 3) discharge to community; and 4) medication reconciliation. These measures will be proposed in future rulemaking years.

Additional setting-specific measure concepts that were discussed include: 1) fall risk composite process measure; 2) nutrition assessment composite measure; 3) improvement in dyspnea in patient with a primary diagnosis of CHF, COPD, or Asthma; 4) improvement in patient-reported interference due to pain; 5) improvement in patient-reported pain intensity; 6) improvement in patient reported fatigue; and 7) stabilization in three or more activities of daily living.

HHA is expected to submit a minimum set of two matching assessments for each patient admitted to their agency, which make up the quality episode of care, and include a Start of Care or Resumption of Care assessment and a matching End of Care assessment. Follow-up assessments are considered Neutral assessments and do not count toward or against the pay-for-reporting performance requirement. CMS’s goal is for all HHAs to achieve a compliance rate of 90% or higher for submission. In 2015, HHAs had to score at least 70% for assessment submission required for July 1, 2015 through June 30, 2015 or be subject to a 2-percentage point reduction in payment.

This year’s Final Rule is setting the performance threshold at 80% for the July 2, 2016 through June 30, 2017 time frame and 90% submission from July 1, 2017 through June 30, 2018. All OASIS submissions are required to go into the ASAP system with receipts of no fatal error messages.

Beginning April 1, 2015, HHAs began receiving Provider Preview Reports (for all process measures and outcome measures) on a quarterly, rather than annual, basis. This gives HHAs the opportunity to preview and review their data and to submit corrections prior to public reporting. Beginning in July 2015, Home Health Compare will begin Star ratings. Each agency will receive a rating between one and five stars dependent upon the agency’s quality measure submission.

This year’s Final Rule has an estimated net impact of approximately -$260 million (or 1.4%) in decreased payments to HHAs in CY 2016. This decrease includes the 1.9 percent HH payment update ($345 million increase), the third year of the four year phase-in of the rebasing adjustment to the national, standardized 60-day episode payment amount, the national per-visit payment rates, the NRS conversion factor for an impact of -2.4 percent ($440 million decrease), and the effects of the 0.97 percent adjustment to the national, standardized 60-day episode payment rate to account for nominal case-mix growth ($165 million decrease). Savings impacts related to the HHVBP model are estimated at a total projected 4-year gross savings of $380 million, potentially up to 6% annual reduction in hospitalization and a 1.0% annual reduction in SNF admissions.

You can download the Final Rule for CY 2016 by clicking HERE.

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