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January 14, 2021

HHS Announces the Expansion of the Home Health Value-Based Purchasing Model

On January 8, CMS announced its plan to expand the CMS Innovation Center Home Health Value-Based Purchasing Model (HHVBP Model).  CMS Innovations Center initially implemented the HHVBP Model in all Medicare-certified home health agencies (HHA) in nine states.  The HHVBP Model attempts to incentivize HHA quality and public reporting while creating cost-savings by tying payment to quality performance.  HHA’s in the initial nine states were subject to annual maximum payment adjustments, which allowed for wider adjustments each year.  For example, the maximum payment adjustment was: 3% in 2018, 5% in 2019, and 6% in 2020.  The maximum payment adjustments will be 7% in 2021 and 8% in 2022.

The CMS announcement and HHVBP Model webpage did not announce the maximum payment adjustment rate schedule for expansion state HHA’s.  However, the Office of the Actuary’s Certification of the HHVBP Model concluded that expanding the HHVBP Model would produce Medicare savings whether the expansion uses the phase-in for payment adjustments done in the demonstration or immediately goes to the same adjustment range currently being used in the demonstration states.  The expansion will be implemented through rulemaking and may not begin before January 1, 2022.