Therapy Caps Lifted…Home Health Grouper Model Alive, Again

Nursing homes and outpatient providers are rejoicing at the news that Congress has rescinded caps on how much therapy could be performed without significant hurdles. Congress made the change in February. However for home health agencies, this could be an issue.

Patients who receive PT, OT and Speech in an outpatient setting no longer have to worry about reaching their caps. For PT and Speech, therapy patients received an annual benefit of $2,010 and an additional $2,010 for occupational therapy. Many patients found these caps quickly reached after surgery or a significant event occurred in their life.

As part of CMS’ overall plan to remove therapy as a component of reimbursement for home health agencies, we are beginning to see the shift from home based therapy to other settings. In previous issues of Home Health Today, we discussed CMS’ intent to bring nursing services to the forefront of home health while removing therapies as a reimbursement factor.

Your agency can still provide as much therapy is needed for the patient, but don’t expect a massive PPS claim is what CMS is quietly saying. This is all expected to hit next year in 2019 when CMS rolls out a new payment methodology called the Home Health Grouping Model (HHGM). HHGM was originally scheduled for 2018 but was pushed back one year.

Congress and CMS’ intent of the therapy cap removal is to further erode the viability of home health agencies. The goal is to reduce the amount of free standing agencies and reduce the fraud that is plaguing the industry. But instead of focusing on known fraudulent activities, a blanket approach is once again being taken which will hurt the agencies that are honest and providing actual, quality services.

Patients are likely to suffer as well as home health providers are unable to provide long term therapy to patients who need it the most. Agencies, through no fault of their own, are going to have to balance needs of the patient with financial concerns much more closely with HHGM. The ability to have outliers to compensate for visit intensive episodes will be gone. 30 day groupings will also hinder the agency’s ability to spread visits out over a longer period. 2019 is going to be all about intensive home health provided in a cost efficient manner for the good of the patient and the agency. No longer can just the compassion for patients be used in the operations of an agency. Data, financials, and strong attention to utilization is all going to be essential.

As we get further into 2018, we are going to be examining and providing more information on HHGM. Prior information released by CMS has given us a good indication of what the proposed rule due this summer will look like and how it will effect agencies like yours. While this won’t be an easy transition, similar transitions have occurred in home health before.

Prior to PPS, agencies operated on a per visit model based on cost reimbursement (cost reports were legitimately important during this time). When the government realized agencies provided more visits which resulted in more revenue and greater profit, the PPS system was introduced. The initial design of PPS was to cut back on fraud, reduce overall costs, and eliminate agencies who were thought to be undesirable providers. While this did work, the PPS system eventually turned out to benefit agencies more than a per visit system. The downside was that it took time to become accustomed to the new system and learn how to use it to your benefit.

As we move forward to 2019 with the HHGM, agencies are going to have to be prepared to change the way they operate and become educated quickly. Keeping your head in the sand and hoping for the best won’t cut it. HHGM will require agencies to be very proactive and, as we have been saying for the past couple of years, very dynamic to meet the needs of patients while making money.

Read more about the HHGM here. There are likely to be some refinements and changes, but the overall methodology is now complete.  Agencies will need a strong financial consultant on their side as well and Tortolano & Company can help.

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