Home Health Billing Regulations

With the recent CMS announcements, 2021 is looking like it’s going to be a transitional year for home health billing and home health coding. The agency has made multiple changes to home health regulations to improve efficiency and make better use of technology across the country.

A Recent History of Home Health Regulations
To understand the implications of these changes, it’s helpful to look back at the impact of existing reimbursement regulations on home health agencies.

Earlier in the year, it was reported that, under the Patient-Driven Groupings Model (PDGM), 80% of home health agencies were seeing reimbursement that was different in comparison to the previous, Prospective Payment System (PPS). The difference was largely negative — in a survey of 127 agencies, 82% of agencies reported a decrease in reimbursement. Overall though, the decrease was moderate and the transition went smoothly.

Agencies were seeing payments come in in a timely fashion and providers were generally able to minimize Questionable Encounter (QE) risk. The survey also found that the vast majority of agencies, 84%, were submitting more claims per month. Still, the introduction of a pandemic created new challenges in terms of access and reimbursement that CMS has been pressured to address [1].

Overview of Home Health Regulations
The CMS Final Rule, took steps forward to address these challenges, expanding telecommunications but also increasing home health reimbursement for CY 2021.

The initial proposed rate increase added $540 million in Medicare home health reimbursement, but the finalized rule only added $390 million, a 1.9% increase. The rule boosts reimbursement under the Home Health Prospective Payment System (HH PPS) by 2.0%, less 0.1% in reductions in the rural add-on percentages as mandated by law [2].

The rule also updates the home health wage index — an index used in the calculation of a national, standardized 30-day period payment rate that is used in the HHS PPS. This update includes the revision of statistical area delineations from the Office of Management and Budget (OMB) along with implementing a 5% ceiling on any wage index decreases in the future.

The policies, which go into effect on January 1 and extend through the end of 2021, additionally make changes to home health regulations and the treatment of telecommunications technologies when used to provide care to beneficiaries under the Medicare home health benefit. These services are allowed as long as they are delivered through technologies included in the care plan.

Implications for Remote Patient Monitoring
These new allowances hold potential to greatly expand services that can be offered remotely. They mean that home health agencies can now provide remote patient monitoring and other services through a telecommunications system, or even audio-only technology as long as the services in question are connected to a patient’s needs as determined in their comprehensive assessment.

Agencies are also relieved of the burden of providing a description of how the telecommunications technology aids in achieving care plan goals — that is as long as the medical record contains clinical documentation that justifies how the services support treatment outcomes. Additionally, the rule expands the definition of telecommunications technology and remote patient monitoring that agencies are permitted to include in Medicare cost reports as allowable administrative costs.

Remote patient monitoring has long been proved to have potential to lower the cost of chronic care, reduce hospital readmissions, and improve clinical outcomes by pushing the point of care out of the hospital and into the home. Providers though, have shied away, since, until recently, much of the technology had yet to prove its reliability; and devices and platforms that were capturing too much data had the potential to overwhelm providers with information they didn’t need. New advances though, have opened the door for CMS to further expand reimbursement.

That said, CMS does have limitations in what it will allow. Technology may not be used as a substitute for an in-person visit that is ordered on the plan of care. It also cannot be considered as a visit for patient eligibility or payment — but this doesn’t mean that home health agencies won’t benefit. The use of the technology can still turn into efficiencies in providing home health care which can impact the frequency and types of in-person visits ordered on the plan of care.

Quality Reporting
On the quality reporting front, the rule finalized a policy intended to align the Home Health Value-Based Purchasing (HHVBP) Model data submission requirements with exceptions and existence that are granted under the Home Health Quality Reporting Program (HH QRP) during the COVID-19 public health emergency (PHE). It also finalizes a policy that grants exceptions to the New Measures data reporting requirements during the PHE.

The Future
As CMS continues to work toward establishing stability in home health reimbursement and regulations, home health agencies should pay particular attention to their home health coding and billing practices, making sure to look for opportunities to take advantage of outsourcing expertise when possible. If you’d like to take this step, contact us today.

[1] A. Donlan, “Survey: 80% of Home Health Agencies Experiencing Early Reimbursement Turbulence,” Home Health Care News, 3 March 2020. Available: https://homehealthcarenews.com/2020/03/survey-80-of-home-health-agencies-experiencing-early-reimbursement-turbulence/.
[2] J. LaPointe, “CMS Finalizes 1.9% Boost for Medicare Home Health Reimbursement,” RevCycleIntelligence, 4 November 2020. Available: https://revcycleintelligence.com/news/cms-finalizes-1.9-boost-for-medicare-home-health-reimbursement.

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