FY 2022 Home Health Final Rule Released

On Tuesday, 11/02/2021, the FY 2022 Home Health Final Rule went on display at the Federal Register’s Public Inspection Desk and will be available under special filings at: https://public-inspection.federalregister.gov/2021-23993.pdf

The following are highlights of the 528 page rule

  • Payment Adjustments The home health market basket was increased 3.1% (compared to the proposed increase of 2.4%), and then reduced by a productivity adjustment of 0.5 percentage point for FY 2022. The higher rate is primarily due to forecasted higher compensation rates.
For HHAs that submit the required quality data for FY 2022, the home health payment update is a 2.6% increase to the base 30-day payment rate ($2,031.64 from ($1,901.12 to).Failure to submit required quality data still results in a 2% rate reduction.
The LUPA per visit rates are set at:
  • Home Health Aide  $71.04
  • Medical Social Services  $251.48
  • Occupational Therapy  $172.67
  • Physical Therapy  $171.49
  • Skilled Nursing  $156.90
  • Speech-Language Pathology  $186.49
It’s important to note that unless additional congressional action is taken, there is also a combined 6% Medicare cut scheduled to take effect on January 1, 2022, offsetting the increase in the Final Rule completely – and then some. This is a result of the re-imposition of the across-the-board 2% sequestration cuts, and an additional 4% cut that was triggered by the budgetary impact of the American Rescue Plan Act of 2021 (a.k.a. the “PAYGO” requirement cuts in ARPA). You can help take action to prevent these cuts through NAHC’s Legislative Action Center found here:  https://p2a.co/7hauLTp
  • Value Based Purchasing Nationwide Home Health Value Based Purchasing (HHVBP) demonstration expansion was delayed for one year, so that CY 2023 will be the first performance year impacting a 5% at-risk payment adjustment, rather than CY 2022 as proposed.The first payment year for HHVBP will be 2025, based on CY 2023 performance. CY 2022 is now being called a “pre-implementation” year.
  • Behavioral Adjustment CMS indicated that they would consider all alternative approaches to the budget neutrality methodology presented in the proposed rule, continuing to refine a methodology to determine the difference between assumed versus actual behavior changes on estimated aggregate expenditures. However, the FY 2022 Final Rule does not increase or decrease the 4.36% behavioral adjustment. Using the currently proposed methodology, CMS calculated that HHAs were “overpaid” by 6% in 2020.
  • Wage Index Limitation The rule removes the 5% cap on any reduction in the wage index from the prior year. This could result in a significant impact to agencies whose patients are primarily located in geographical areas with a significant decline in the wage index.
  • Recalibration of Case Mix Weights CMS is recalibrating all 432 PDGM case mix weights using 2020 data on the use of clinical resources in home health 30-day periods, together with data on other PDGM measures such as the site of referral and patient functional status. The overall impact is supposed to be budget neutral but may affect individual agencies positively or negatively based on their typical case mix and referral sources.
  • Rural Add-On and Outlier Payment Standards The final rule decreases the Fix Loss Ratio for outlier eligibility at .40 for 2022, meaning that more periods will be eligible for outlier payments. The rural add-on phase-out has also been continued as follows:
    • High Utilization areas—- 0% add-on
    • Low Population Density areas—1% add-no
    • All other areas—–0% add-on
  • CoP Changes and Blanker Waivers Made Permanent Changes to the home health Conditions of Participation (COP) that were implemented during the COVID-19 PHE, including current blanket waivers related to home health supervision and the use of telecommunications in conducting assessment visits have been made permanent.
Specifically, home health aide supervision requirements have been modified to allow for virtual visits through real-time, audio-visual technology. The frequency of these visits, however, has been revised from 2 visits every 60 days to permit 1 virtual supervisory visit per patient per 60-day episode. This visit must only be done in rare instances for circumstances outside of the agency’s control, with the circumstances being documented in the medical record.
CMS is also revising language to clarify that every 60 day home care aide supervisory visit for patients not receiving skilled services is conducted on each patient and not on each aide caring for that patient. The proposed change would replace the language from 42 CFR 484.80(h)(2) that states, “in order to observe and assess each home health aide while he or she is performing care,” with “to assess the quality of care and services provided by the home health aide and to ensure that services meet the patient’s needs”.  
  • Changes to OASIS The final rule updates reporting of OASIS measure M2016, ‘Drug Education on All Medications Provided to Patient/Caregiver During All Episodes of Care’, by removing it from the HH QRP beginning in CY 2023. CMS also officially delayed the adoption of (OASIS-E) to January 1, 2023, even though there is not a set end date for the public health emergency. CMS reiterated that it would provide the training and education for agencies to be prepared for implementation and will release a draft of the updated version of OASIS-E in early 2022 if the January 1, 2023 date is finalized as proposed.
  • Hospice Survey Reforms In recent years, the home health and hospice final rules have also posted updates to the others’ rules. In this case, the 2022 Home Health Final Rule contains details on the regulations that will be implemented for hospice program integrity/survey reform/enforcement remedies following the passage of the Consolidated Appropriations Act, 2021. Look for another email shortly that elaborates on the Hospice Survey Reforms.

In more Hospice News, the CY 2022 Physician Fee Schedule, which was also released on 11/02/21, contains the implementing regulations for the Rural Access to Hospice Act allowing physicians and NPPs in Rural Health Clinics and Federally Qualified Health Centers to serve as a hospice attending physician, telehealth provisions, changes in physician assistant billing and e-prescribing. The Physician Fee Schedule Rule can be reviewed here:  CY 2022 Physician Fee Schedule (CMS-1751-F).

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