Home Health Pay Increase Scaled Back for 2021

Home Health Pay Increase Scaled Back for 2021

About $150 million less will make it into home health than proposed.

The scores of comments on the Home Health final rule for 2021 fell mostly on deaf ears. The Centers for Medicare & Medicaid Services has changed almost nothing from the 2021 proposed rule.

What HHAs wanted: Home health agencies (HHAs) and their representatives urged CMS to eliminate the 4.36 percent behavioral adjustment cut it implemented in 2020, based on assumptions about how providers would react to the Patient-Driven Groupings Model (PDGM).

What HHAs got: “As we stated in the CY 2021 HH PPS proposed rule, we believed it would be premature to propose any changes to the CY 2021 payment rate based on the data available at the time of CY 2021 rulemaking and in light of the ongoing COVID–19 PHE,” CMS says in the final rule published in the Nov. 4 Federal Register. “We will analyze data for CYs 2020 through 2026 … to annually determine the impact of the differences between assumed and actual behavior changes on estimated aggregate expenditures and, at a time and manner determined appropriate by the Secretary, make permanent and temporary adjustments to the 30-day payment amounts.”

Further, CMS has ratcheted down the inflation payment update for agencies, bringing the rate of increase for next year down from the proposed 2.6 percent to 1.9 percent. It still will be the biggest pay increase in over a decade — but just barely.

Bottom Line

CMS calculates the 2021 increase with a 2.0 percent Home Health Prospective Payment System update percentage ($410 million increase) — down from 2.7 percent in the proposed rule — and a 0.1 percent decrease due to the rural add-on phase-out ($20 million decrease), which is the same as proposed. Both the proposed and final update percentages include a 0.4 percent multifactor productivity (MFP) adjustment required by law.

The end result is an additional $390 million in home health payments next year, compared to the proposed $540 million increase, CMS estimates.

The 30-day PDGM period base payment rate will be $1,901,12 — up from $1,864.03 this year. That compares to the proposed rate of $1,911.87.

What Others are Saying

“CMS rejected pleas to roll back the 4.36 percent behavioral adjustment based on its position that it does not have the data yet to evaluate whether its budget neutrality obligation has been met in 2020,” notes the National Association for Home Care & Hospice in its rule analysis. “NAHC and others argued that the data to date clearly shows that the assumptions made by CMS in its establishment of the adjustment have not become reality.”

The 2021 final rule “knowingly includes a rate reduction that doesn’t match provider behavior,” blasts Joanne Cunningham of The Partnership for Quality Home Healthcare in a release. The lobbying group points to the study it funded from health economics consulting firm Dobson DaVanzo & Associates showing that HHAs are getting significantly underpaid under PDGM.

“Despite data demonstrating that actual provider behaviors under PDGM did not reflect Medicare’s theoretical assumptions, and lawmaker concerns, CMS failed to remove the -4.36 percent behavioral adjustment for CY 2021,” Cunningham says. “Continuation of the -4.36 percent adjustment is clearly not supported by the data, which shows that payments are not budget neutral as the law requires. We remain concerned that home health spending has been significantly lower than what Congress budgeted, which could impact negatively on the home health system.”

In a message to members, NAHC President William Dombi says, “We are disappointed that CMS put off consideration of dropping the behavioral adjustment to payment rates based on its view that it needs a full year of data before it can act.”

Final 2021 Per-Visit Payment Amounts*

Discipline2020 Per-Visit Payment2021 Proposed Per-Visit Payment2021 Final Per-Visit Payment
Home Health Aide$67.78$69.53$69.11
Medical Social Services$239.92$246.10$244.64
Occupational Therapy$164.74$168.98$167.98
Physical Therapy$163.61$167.83$166.83
Skilled Nursing$149.68$153.54$152.63
Speech Language Pathology$177.84$182.42$181.34
* Rates are 2 percent lower for agencies that do not submit required quality data.



CMS 2020 HH PPS final rule at www.govinfo.gov/content/pkg/FR-2018-11-13/pdf/2018-24145.pdf

CMS 2021 HH PPS proposed rule at www.govinfo.gov/content/pkg/FR-2020-06-30/pdf/2020-13792.pdf

CMS 2021 HH PPS final rule at www.govinfo.gov/content/pkg/FR-2020-11-04/pdf/2020-24146.pdf

About Has 18 Posts

Rebecca L. Johnson, BS, is an executive editor, for The Coding Institute newsletters. She has covered the home health and hospice markets for 20 years.

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