CMS Does Not Have Statutory Authority to Impose HHGM, Must Withdraw It
September 14, 2017 12:22 PM
As NAHC Report readers know, the Centers for Medicare & Medicaid Services (CMS) proposed on July 28, 2017, an entirely new payment system for Medicare home health services, scheduled to begin in CY2019. This proposal, the Home Health Groupings Model (HHGM), completely replaces the patient classification system with a new and untested model that classifies patients for purposes of determining payment amounts based on patient diagnosis, clinical condition, functional status, pre-home health care setting, and the time point when care is rendered in relation to the start of home health services.
In addition, the proposed model also institutes a 30-day unit of payment to replace the current 60-day unit of payment. Finally, this new model is not implemented in a budget neutral manner. NAHC is convinced the statutory language does not permit this wholesale revision of the law without Congressional action.
As NAHC points out in a letter to CMS Administrator Seema Verma, the HHGM proposal to establish a wholly new, non-budget neutral payment amount without authorization by Congress violates the Social Security Act and the proposal to replace the 60-day “episode” unit of payment with a 30-day payment “period” violates Section 1895(b)(2) of the Social Security Act. Threfore, this proposal must be withdrawn.
The Secretary of Health and Human Services lacks the authority to implement these changes because the statutory framework establishes a clear limit on the Secretary’s discretion to makes changes in the Medicare home health payment system without direct authorization and/or a mandate from Congress. The language of Section 1895(b)(3) and 1895(b)(2) unambiguously indicates that any modifications by CMS to the prospective payment system for home health must be budget neutral unless Congress indicates otherwise. Similarly, there is no authority to alter the 60-day episode unit of payment once it was established.
The Balanced Budget Act of 1997 mandated the development and implementation effective October 1, 2000 of a prospective payment system (“PPS”) for home health services. Under Section 1895(b)(1), the Secretary is empowered to establish “a prospective payment amount.” The authorization for the Medicare prospective payment amount, as originally enacted, required that it be done in a budget neutral manner.
The budget neutral implementation is reinforced in further amendments to the Social Security Act § 1895 and by Section 3131(d) of the Patient Protection and Affordable Care Act (“ACA”). Moreover, and quite significantly, Congress clearly and unequivocally instructed that the “Secretary shall not reduce the standard prospective payment amount (or amounts) under section 1895 of the Social Security Act (42 U.S.C. 1395fff) applicable to home health services…”
While CMS is permitted to alter the payment model in a demonstration program, it is only authorized to do so if the alteration is budget neutral.
Furthermore, by proposing to change the unit of payment from a 60-day episode to a 30-day payment period, the Secretary ignores the statutory directive under Section 1895 that the standard payment amount be based upon the continued use of the episode of payment subject to the 4-year phase-in of the standard payment rate reduction. Accordingly, the Secretary would directly violate the statutory mandate to alter the unit of payment that is in effect.
Beyond the legal arguments, which are powerful, maintaining budget neutrality and the 60-day episodic payment model is simply better policy. The proposed system is untested, with a high risk of adverse unintended consequences given the radical changes proposed. Further, home health agencies are navigating through multiple consecutive years of payment rate reductions including a 4-year rate rebasing, productivity adjustments, case mix weight adjustments, market basket index limitations, and sequestration that have, in combination, reduced rates by over 20% in the past five years. Stabilization of the delivery system has yet to occur. As such, a non-budget neutral policy, such as HHGM, poses serious risks to Medicare patients, home health agencies, and Medicare itself. Those consequences are not merely speculative. Instead, the transition to the Interim Payment System and HH PPS between 1998 and 2000 is a historical lesson that should not be ignored. Over 4,000 home health agencies closed during that period with nearly 1.5 million fewer Medicare beneficiaries finding access to care in 2001 than in 1997.
Smart policy would dictate recognition that Medicare home health services remain a 60-day model. The patient plan of care will remain a 60-day plan. Physician certifications of eligibility will stay at 60 days. Patient assessments using OASIS will continue on a 60 day schedule. A payment period that is inconsistent with the rest of Medicare home health services architecture will only create unnecessary administrative burdens and confusion among caregivers. Doubling the number of billings is just one big part of that increased administrative burden and is inconsistent with the Secretary’s priority goal of reducing administrative burden on providers so that more time and resources can be devoted to providing high quality care.
Therefore, the Secretary must withdraw in its entirety, the Home Health Groupings Model included in the CY 2018 Proposed Rule.
NAHC urges CMS to withdraw the HHGM policy and instead work with stakeholders to develop a fully budget-neutral policy that does not limit access to beneficiaries or diminish provider resources.
This issue is NAHC’s top priority and will remain so until the policy is improved. Please stay tuned for further analysis and news about NAHC advocacy on behalf of our members and the millions of aged and disabled Americans they serve.
However, to defeat this payment rule before it brings havoc to the industry, we need home health leaders, employees and patients to make their voices heard by policymakers in Washington, D.C. Without your support and advocacy, this rule cannot be stopped. Please go to the NAHC Legislative Action Center and ask Congress to tell CMS to withdraw the payment rule.
See previous NAHC Report articles on the proposed HHGM:
CMS Must Withdraw the Proposed Home Health Groupings Model
Home Health Care Has Endured a Series of Rate Cuts Since 2009
NAHC Letter to CMS – Withdraw the Home Health Group Model
CMS’ Proposal Home Health Groupings Model Puts Entire Home Health System at Risk