Home Health Agencies Face Growing Competition as Value-Based Purchasing Expands Nationally

With the successes reaped during the pilot of the Home Health Value-Based Purchasing (HHVBP) program, the Centers for Medicare and Medicaid Services (CMS) aims to accelerate the results nationwide.

The program started in 2016 as a pilot to determine the impact of financial incentives on home health agencies in nine states. The pilot program rewarded or penalized agencies based on a total performance score (TPS) compared to other agencies in the same state.

In the fourth Annual Report Evaluation of the HHVBP Model released in May 2021, CMS indicated that net Medicare spending decreased by $481 million. Meanwhile, patient outcomes improved in HHVBP states when compared to non-HHVBP states.

A recent Relias webinar on HHVBP indicated that the total Medicare spending reduction in the program’s first five years (2016-2020) resulted in a $942.2 million decrease. As nationwide expansion begins in 2023, the program is expected to save $3.376 billion in the next five years (2023-2027).

One of the biggest changes in the new program is that your agency will be compared against all other agencies in the nation rather than just those in your state. This makes the pool of competition much deeper and will require your agency to perform at a very high level to achieve financial rewards.

Preparing for the change

Initially, the proposed rule released in July 2021 indicated that the first performance year for HHVBP would be 2022, but CMS officials moved that back a year. Home health agency officials should take this delay as an opportunity to understand the HHVBP model fully, how you would fare if it were active, and where your agency needs to improve to succeed under this model.

Change takes time to implement and re-evaluate. Waiting until 2023 may put your agency at a disadvantage compared to your peers. For the few months remaining in 2022, you can work to identify areas where you trail the national averages, then develop action plans to improve those metrics. Agencies can take this time to determine which methods of improvement work best for them.  You may focus on education, additional certifications, or more in-depth chart reviews.

Finally, if those techniques are not as effective as anticipated, you have the flexibility to adapt and try alternatives without being in a performance year that will impact reimbursement under HHVBP.

Determining payment adjustments

Under the final rule released in November 2021, your agency will be able to receive payment adjustments of plus or minus 5% based on the TPS starting in 2025, which is derived from either achievement scores or improvement scores. These scores are based on an agency’s performance in each measure under HHVBP. The higher value of the achievement or the improvement score is selected to determine the payment adjustment.

“It’s a zero-sum game,” said SimiTree Director of Operations Consulting John Rabbia, PT, PT, MS, MBA, COS-C, at the Relias webinar. “Any money that you might receive as a positive adjustment is going to be removed from somebody else’s agencies. You will compete nationally in your applicable size cohort determined by your 2022 census.”

CMS indicated it will provide agencies with their benchmarks and achievement thresholds prior to 2023. The goal is to use these measures to develop quality improvement projects that can lead to higher payment adjustments.

When determining improvement scores, the baseline year will be 2019 as opposed to 2020 due to the potential effects of COVID-19 distorting the data. For improvement scores, each measure will receive a value of 0–9 to quantify an agency’s performance on that measure compared to its own performance in the baseline year.

Achievement scores are measured on a scale of 0–10 to quantify an agency’s performance on each measure compared to other agencies in the same cohort in the baseline year. Agencies will be grouped into large or small cohorts based on the volume of patients served. Large cohorts cover those agencies required to participate in the Home Health Care Consumer Assessment of Healthcare Providers and Systems (HHCAHPS) survey, whereas small cohorts are exempt.

Each performance score is then weighted and summed to generate a TPS. The TPS is then compared to all other agencies in the cohort and will dictate the payment adjustment received by the agency.

Understanding the scoring system

Claims-based measures make up 35% of the TPS and are based on acute-care hospitalizations in the first 60 days of care and emergency department use without hospitalization in the first 60 days of care.

Measures based on the Outcome and Assessment Information Set (OASIS) contribute to 35% of the TPS and are based on the following OASIS items:

• Dyspnea
• Management of oral medications
• Discharged to community
• This measure also includes two aggregate measures, which are called total normalized composite (TNC) self-care and TNC mobility. TNC measures include the following:

The final 30% of the TPS is made up of five elements of the HHCAHPS survey:

• Professional care
• Communication
• Team discussion
• Overall rating
• Willingness to recommend

Start taking steps now

To gear up, your agency should review:

• Your current outcome scores, specifically how you compare to national and state benchmarks
• Trend data over the past 12 months to see if any measures significantly declined or improved

If your measures declined, consider events that may have led to the decline:

• New staff being hired may not have fully understood the OASIS scoring.
• Experienced staff who left took their knowledge of the OASIS with them.
• Process changes may have revealed that the OASIS items were not being reviewed as thoroughly as they were in the past.

If your measures improved, analyze what may have led to the improvement and see if you can replicate it. Look for:

• Education delivered on a specific measure several months prior to the increase
• Process changes in which the OASIS is reviewed in a more thorough manner or collaboration is occurring between clinicians after the start of care occurs
• Staff completing the OASIS review became certified prior to the improvement

Check why measures are below benchmarks. Look for:

• Staff may not understand how to score the OASIS item in question.
• Evaluate your case mix weight against state and national averages and consider your patient population. Patients with chronic illnesses may not improve as much as those with an acute disease process.
• Evaluate how patient calls are handled. Are they sent to the hospital for evaluation because the agency does not have adequate staff to see the patient that day? Are they sent to multiple people before they can get an answer to a question?

Depending on the number of areas identified for improvement, your agency should select one or two measures at a time and develop a plan for improvement around those measures.

This type of process improvement takes time and requires sustained attention. Your agency will need to thoroughly evaluate how your teams provide care, how you measure the quality of that care, and how you can improve the care your teams provide.

Note: This content was adapted from a blog originally posted by our partner SimiTree.