2019 Final Rule … Big Changes Coming

The 2019 Final Rule for Home Health is here and there are some exciting changes along with some changes that may not be quite so welcome.  CMS’ plan for 2019 is more focused on pillars and a narrow focus.

Three pillars and goals that CMS has in mind with the implementation of the Final Rule are empowering patients, increasing competition, and fostering innovation. With these three goals, CMS is realigning the process and reimbursement structure to shift from volume to quality which most providers have been expecting for the past few years.

Home Health Quality Reporting and Value Based Purchasing are coming into focus with CMS’ 2019 Final Rule. With this comes a very big shift in the way your agency is going to be reimbursed.  Soon, the volume of therapy visits will no longer be factored into reimbursement. Instead, the patient’s characteristics and needs will be the driving force.

The focus on quality is here and therefore, a shorter episode of care will also be present.  Cutting the 60-day episode in half to 30 days is part of that major shift. Agencies are going to need to be ready and they are going to need to be prepared for the biggest shakeup since PPS was rolled out between 1999 and 2000. Let’s focus first on 2019 then begin to look at 2020 and beyond!

Reimbursement Increase for 2019

I bet you didn’t expect that one … an increase in reimbursement?  Well it’s finally here.  2.2% is the increase agencies can expect to receive in 2019. While this isn’t a huge increase, it is much better than the consistent cuts that have occurred over the past 5 years.  In fact, for most agencies, this new 2.2% increase is likely going to push them back in the black as opposed to treading in the red consistently. This additional $420 million reimbursement in 2019 is a refreshing step in the right direction.

The rural add-on will be available in 2019 but the formula used for the calculation is changing. CMS, as part of the Bi-Partisan Budget Act of 2018, is required to classify rural counties into three categories: high home health utilization, low population density, and other – which has not been defined – which will determine which counties receive the add-on.

Episodes are Shorter

Effective January 1, 2020, the 60-day episode of care will no longer exist.  Episodes will now be based on 30-day intervals.

Patient-Driven Groupings Model (PDGM) Finalized

January 1, 2020 will be a busy day. The Patient-Driven Groupings Model (PDGM) will be introduced, changing the documentation and admission requirements for patients.  Rather than projecting the number of visits and encouraging the use of therapy to assist patients, staff are going to need to understand the overall patient characteristics and needs.

Clinical needs will be the driving force for reimbursement. Based on how a clinician documents the requirements of a patient’s needs will directly translate into how well your agency gets paid for the care of that patient.  This could be a very rough and turbulent period as training and adjusting to the new documentation standards of a revised OASIS will be required.


CMS is allowing the inclusion of Telehealth related expenses on the cost report for 2020. Previously, this was an expense that had to be excluded similar to marketing expenses for cost reporting.   The purpose for allowing the expense is to foster innovation amongst home health agencies and encourage more providers to use technology integration as part of the delivery of patient care.

In our next post, we will take a deeper dive into the changes in regulations and reporting, and analyze what this means for your agency.