New PDGM Adjustments Make It Tougher to Reach ‘Medium’ or ‘High’ Functional-Impairment Levels

Home Health Care News | By Joyce Famakinwa
Home health operators have to navigate numerous regulatory and policy changes to stay in business.
Two major ones surfaced within days of each other last week. The U.S. Centers for Medicare & Medicaid Services (CMS) released the home health final payment rule on Nov. 2, then the federal government announced COVID-19 vaccination requirements for health care workers on Nov. 4.
Mary Carr, vice president for regulatory affairs at the National Association for Home Care & Hospice (NAHC), offered insight into both during a Monday webinar.
Among its provisions, the final rule made an adjustment to the Patient-Driven Groupings Model (PDGM), established a 3.2% increase to the home health Medicare rate for next year and finalized the nationwide expansion of the Home Health Value-Based Purchasing (HHVBP) Model.
The base payment rate for 2022 is going to be increased by a net market basket
index of 2.6%. The overall 3.2% rate increase is a substantial bump from the 1.8% CMS originally proposed in June.
“This was a nice surprise,” Carr said. “This is a reflection of an annual inflation update of 3.1%, reduced by 0.5% of productivity adjustment. And that’s where we get our net of 2.6%.”
Carr noted that this means the base 30-day payment rate under PDGM is increased from $1,901.12 to $2,031. 64.
“Now, if you calculate [it out], that’s going to be a little more than 2.6%,” she said. “The reason for that is there are some budget-neutrality gestures that get thrown back into the base rate. CMS has done some recalibration of the case-mix weights … and the wage-index budget neutrality. CMS always recalibrates the wage index annually.”
CMS’ recalibration of the case-mix weights was based on 2020 data, which raises some concerns, according to Carr.
“As I’ve noted, 2020 data was a little skewed with a public health emergency, but CMS insisted that this was appropriate and accurate,” she said.
Although there were changes to case-mix weights, low-utilization payment adjustment (LUPA) thresholds under PDGM remained the same.
CMS did make updates to functional-level points thresholds. This includes decreasing points on several of the OASIS scores and decreasing the threshold level for level of impairment.
“What this means is the same patient in 2021 that had a certain functioning level probably will have a lower score in 2022,” Carr said. “It’s going to take more functional disability to get to a ‘medium’ or ‘high’ using these new adjustments.”
Another change in the final rule was an update to the comorbidity subgroups. The “low” comorbidity group now has 20 categories total, an increase from 10 last year. The “high” comorbidity group is up to 85 interactive subgroups.

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